Organizational Legacy and the Internal Dynamics of Clusters: The U.S. Human Biotherapeutics Industry, 1976–2002

Using data on the human biotherapeutics industry in the United States from the period 1976 through 2002, the authors explore the organizational origins of entrepreneurs to understand the location and size of industry clusters. Specifically, they examine the effect that different types of organizational legacy—defined as the organization in which the entrepreneurs were previously employed—have on the entry of new firms. The study reveals that regional resources influence the location of industry clusters but that concentrations of entrepreneurs who hail from the same population exert an important, differentiating influence and define a local culture that affects the propensity for information-sharing and collaboration. This research shows that the largest impact on local entry stems from a concentration of founders with prior experience in organizations that are more networked than hierarchical.