1. Internet Clusters Analysis 2000 Joint Venture: Silicon Valley Network Master in Engineering Policy and Management of Technology (2001) Carlos Mora, Nelson Marques, Nuno Constantino

2. Agenda Definition Context Key Characteristics Evolution 2nd Generation Characteristics Challenges Conclusions

3. Definition A cluster is a group of entities geographically contained, where balanced relationships allow cooperation and growth, in a very different way form the traditional linear value chain A internet cluster is a special kind of cluster specifically aimed at the new economy

4. Context Internet economy grew to $524 billion In 1999 supported 2.5 million jobs (US only) Globalization is complete Pace of growth is accelerating

5. Key Characteristics Talent Pillar companies Universities Capital Support Services Supportive Government Programs

6. Evolution Cities, regions and countries are competing to attract internet clusters Actions are based on the secondary characteristics enunciated in the previous slide Within three years Europe will overtake US number of users Hong Kong cyber-port will accommodate 30 medium/large and 50 small companies

7. Evolution Cities, regions and countries are competing to attract internet clusters Actions are based on the secondary characteristics enunciated in the previous slide Within three years Europe will overtake US number of users Hong Kong cyber-port will accommodate 30 medium/large and 50 small companies Core characteristics are becoming widely available

8. 2nd Generation Characteristics Proximity to partners Local presence in foreign markets Minimize costs of doing business Relocations due to Merger&Acquisitions Quality of life

9. Challenges Cost of contracting, training and maintaining employees Housing prices Traffic congestion worsens Digital divide

10. Conclusions Clusters are simultaneously horizontal and vertical connections between firms Horizontaly because it implements the “learning region” concept Verticaly because it consists of the “extended vertical chain”