High tech cluster

A high tech cluster is a group of interrelated companies and institutions (including suppliers, service providers, universities, and trade associations, etc.) located in a specific area that cooperate as well as compete. As such, clusters provide the opportunity for on-going innovation to meet new demands for products and processes generated by the dynamic relationships among the players. Diversity within the types and sizes of businesses contributes to a good entrepreneurial environment. A varied, educated, and skilled workforce also contributes to the technological advancement in and around the cluster.

Clusters are important not primarily because of production but because of the opportunities for knowledge spillovers. "[I]nnovative activity is more likely to occur within close geographic proximity to the source of . . . knowledge, be it a university research laboratory, the research and development department of a corporation, or exposure to the knowledge embodied in a skilled worker." Innovation tends to cluster around industries where knowledge plays an important role11 as evidenced by the biotechnology, computer, advanced materials, and telecommunications sectors, among others.