ABSTRACT
We would reiterate that industrial policy, if it should exist at all, should not concentrate solely on small and medium sized enterprises. An emphasis of support on these firms is neither the key to greater wealth, nor an obvious route to higher long-term employment. It is certainly not the central pillar on which private sector capital operates. One could argue that if it works for the private sector – why should not governments also follow suit. On the other hand, successful SMEs do bring economic benefits to regions that are also served by angel capitalists, venture capital funds, investment banks, specialist advisors, and public equity markets. This type of clustering has been wildly successful in northern California. The US government has been a player, but it is difficult to argue that they had a decisive, rather than just an important, role and that it would not have happened anyway.
