The Silicon Valley Case
For example in the mid- to late 1990s, several successful computer technology related companies emerged in Silicon Valley in California. This led anyone who wished to create a startup company to do so in Silicon Valley. The surge in the number of Silicon Valley startups led to a number of venture capital firms relocating to or expanding their Valley offices. This in turn encouraged more entrepreneurs to locate their startups there.
In other words, venture capitalists (sellers of finance) and dot-com startups (buyers of finance) "clustered" in and around a geographical area.
The cluster effect in the capital market also led to a cluster effect in the labor market. As an increasing number of companies started up in Silicon Valley, programmers, engineers etc. realized that they would find greater job opportunities by moving to Silicon Valley. This concentration of technically skilled people in the valley meant that startups around the country knew that their chances of finding job candidates with the proper skill-sets were higher in the valley, hence giving them added incentive to move there. This in turn led to more high-tech workers moving there.
Read more about this topic: Cluster Effect
Famous quotes containing the words valley and/or case:
“Yea, though I walk through the valley of the shadow of death, I will fear no evil: for thou art with me; thy rod and thy staff they comfort me.”
—Bible: Hebrew Psalms, 23:4.
“Wealth is not without its advantages and the case to the contrary, although it has often been made, has never proved widely persuasive.”
—John Kenneth Galbraith (b. 1908)