Research Spotlight: How International Connections Spur Innovation

International connections between clusters of innovation can accelerate the innovation process and result in other benefits, according to new research by Haas Adjunct Professor Jerry Engel, faculty director of the Lester Center for Entrepreneurship, and Itxaso del Palacio, a researcher and instructor at Imperial College Business School in London.

The research is featured in an article titled "Global Clusters of Innovation: The Case of Israel and Silicon Valley" in the latest issue of California Management Review (CMR), the Haas School's management journal. Using a case study approach, the article focuses on Israel as an example of a cluster of innovation and as part of an Israel/Silicon Valley super-cluster of innovation.

The article defines a cluster of innovation as "an environment that favors the creation and development of high potential entrepreneurial ventures and is characterized by heightened mobility of resources, including people, capital, and information." Engel and Del Palacio examined three companies to demonstrate what a global cluster of innovation can achieve.

Kidaro, a desktop virtualization provider which was sold to Microsoft in 2008, combined executive management from Silicon Valley with 25 Israeli engineers and scientists. BrightSource Energy, a large-scale solar-energy plant developer, conducts its product engineering in Israel, while the business development and marketing takes place in Silicon Valley. Their third example, venture capital fund Walden Israel, had its roots in San Francisco as an American-Israeli fund but is now an independent entity based in Israel.

The researchers reported that the founders and managers of the startups they interviewed illustrated the main characteristics of a cluster of innovation, including an intensive entrepreneurial process, heightened mobility of resources,and strategies that reflect a “born global” perspective.

As part of their analysis, Engel and del Palacio developed a cluster of innovation framework to illustrate how international connections between clusters of innovation can not only accelerate the entrepreneurial process but also create unexpected new markets and spread innovation through the movement of capital, technology, and people.

They assert that the most successful clusters of innovation are those that establish relationships with other similarly focused clusters around the globe.

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