2012 Volume 42 Issue 3 Pages 709-721
In this paper, I analyze new developments in regional economic development by collaboration between regional universities and local industries. In recent years, successful examples in which many small or mid-sized new start-up industries grow slowly and contribute to regional economic development are seen. This is in contrast to rapidly growing big start-up industries typically seen in the Silicon Valley. These recent movements are linked with reforms in entrepreneurial education systems and commercialization policies of intellectual properties at universities. These reforms are typically done by leadership-style changes. I examine the University of Utah focusing on the notion of institutional complementarity and analyze the mechanics of the successful reforms in research-oriented universities. Typically there are multiple equilibria in this type of system and I point out the importance of a “Big push” and coordination.
The University of Utah cares about the new start-ups and provides various kinds of support to make it easier for the new start-ups to grow. As a result the University of Utah start-ups have an average smaller firm-size and higher survival rate. This is in stark contrast to start-ups in the Silicon Valley where they receive less support, grow more rapidly and have a lower survival rate.
The University of Utah provides a new model for industrial cluster formation. This is consistent with our hypothesis of multiple equilibria in the theory of cluster formation.
JEL Classification: C70, L16, L24, L26, R11
