Financing Clusters of Innovation: The Geography of Venture Capital Investment, US and UK

39 Pages Posted: 13 Mar 2009

See all articles by T. L. Babcock-Lumish

T. L. Babcock-Lumish

Roosevelt House Public Policy Institute at Hunter College

Date Written: March, 13 2009

Abstract

While considerable research has sought to understand financial and network foundations of entrepreneurial activity in places such as Silicon Valley and Boston, much has emphasized the urban ecology of talent and expertise. By contrast, this paper focuses upon the financing of clusters of innovation. In this respect, it is a contribution to the emerging synthesis of finance and economic geography initiated by Clark and Freeman, just as it is a contribution to understanding the distinctive attributes of American and British entrepreneurial communities. This paper considers the repercussions of information asymmetries in inherently high-risk and high-uncertainty knowledge markets supported by venture capitalists and other innovation investors. We find seven factors for consideration by decision-makers, public and private. In recent years venture capital research has proliferated within and across a multitude of disciplines; however, if inquiries remain undersocialized (and therefore unreflective of the reality of market decisions), their relevance for competitiveness initiatives will be limited if not misguided.

Keywords: clusters, innovation, risk, venture capital

JEL Classification: G24, L14, O30, R12

Suggested Citation

Babcock-Lumish, Terry, Financing Clusters of Innovation: The Geography of Venture Capital Investment, US and UK (March, 13 2009). Available at SSRN: https://ssrn.com/abstract=1358931 or http://dx.doi.org/10.2139/ssrn.1358931

Terry Babcock-Lumish (Contact Author)

Roosevelt House Public Policy Institute at Hunter College ( email )

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New York, NY 10065
United States
+1 202 489 4379 (Phone)

HOME PAGE: http://roosevelthouse.hunter.cuny.edu

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