Over time, the process builds new growth capacity and drives the local innovation culture. Clusters are important because people of like mind gain an enormous amount from being in competition with other people of like mind or by being able to talk to each other and ask questions. Competing companies benefit and feed off each other to create a critical mass of talent, expertise and resources. There's an enormous exchange of information and self-help. The availability of venture capital is a key contributor to the success and growth of technology clusters.
Risk capital needs to be available at all stages of business development.
A positive spiral can occur in which success breeds success. A thriving technology cluster will attract considerable financial investment, which in turn will attract more high tech start ups and entrepreneurs, which will attract more investment and so on. Ottawa is a great example of what can happen when venture capital flows freely. Successful high-tech clusters are able to attract and retain talent, both foreign and domestic. The hig-tech industry is built on human capital.