ABSTRACT
Individual countries in Europe appear to lack such a forceful dynamic to cluster in these industries. The United Kingdom, which is in the forefront of Europe in the commercialisation of biotechnology, having the greatest number of small biotechnology companies and centres of scientific excellence that compete with other European countries, has not experienced an equivalent process to that which has occurred in the San Francisco Bay area, with the creation there of several hundred small biotechnology companies of different types. The issue is not one of absolute geographical size. The markets for the products of biotechnology are global. The marketing and distribution is achieved through collaboration with world-wide multinationals. Such alliances are themselves not constrained by geography. The constraints appear to lie on the supply side of the creation of spillovers in a particular locality of a sufficient magnitude to set in motion the dynamic whereby new companies are attracted to that location. The spillovers are partly due to economies of scale. There are scale economies in both infrastructure and in supplies of specialised skills in the variety of disciplines needed and in auxiliary industrial activities, such as specialised equipment manufacture, access to which is essential if firms are to keep at the forefront of technological activity. It is also a question of whether there are opportunities for new entrants to absorb the spillovers, or whether the sector is dominated by incumbents which are adept in absorbing spillovers locally within their sector, leaving fewer opportunities for new firms to be created. In addition the structure of clusters has been important, with certain sectors of industry generating a more innovative dynamic to growth than other sectors. There are differences in the composition and innovativeness of clusters between the US and the United Kingdom.
