Dynamics of Inventors´ Network and Growth of Geographic Clusters: Evidence from Telecommunications Industry in NJ & TX

Geographic clusters are key carriers of regional economic development by promoting local competition and cooperation. As time goes on, clusters progress through different life-cycle stages due to both external and internal forces. Considering the importance of technology spillovers in growth of innovation, any cluster strategy has to consider the technology spillover activities carefully, though the task could be challenging. An earlier study of telecommunications clusters in New Jersey and Texas demonstrated New Jersey´s telecom industry has been struggling to recover from the impact of deregulation and the economic downturn while Texas appeared moving ahead in terms of overall telecommunications innovation output. This paper provides further insight into these different trends in NJ and TX. The authors will examine the evolution of the inventors´ networks overtime for the two States. A quantitative network analysis tool is employed to conduct the comparative study. The results support the earlier observations and demonstrate that the dynamics of the patent-inventor network can be a good predictor for the growth (or decline) of a geographic cluster. The analysis also shows that NJ´s telecom cluster is still dominated by the giant players such as Lucent Technologies and AT&T. NJ inventors tend to stick with their big employers. The inventors´ network of TX shows a very different pattern: inventors there are more likely to move around multiple employers. Such movements increase knowledge spillovers and strengthen the local network of researchers, leading to increased innovation output. The TX network shows a significant increase of connectivity over the past few years, but a similar trend was not found in NJ