Social Structure And Marketplace Formation Within California Biotechnology

Abstract

Recent studies link the performance of regional technology clusters to their social organization. In an influential study of the success of Silicon Valley, Saxenian (1994) argues that the region benefits from a decentralized structure encouraging the formation of diffuse social ties linking scientists and engineers across local companies. This article examines the emergence of social structures supporting biotechnology across three regions of California: San Francisco, Los Angeles, and San Diego. Social network analysis methods are used to trace the formation of social ties linking some 2500 senior managers working within California biotechnology between 1976 to 2005. Findings show that San Francisco biotechnology succeeded quickly because it inherited an appropriate social structure for the sector from the Silicon Valley electronics industry. San Diego, on the other hand, was a region with no previous high-technology. Social networks supporting biotechnology were constructed in the region through the unanticipated collapse of an early key firm, Hybritech, which lead to the formation of over a dozen spin-offs linked through founder networks. Los Angeles, despite being home to the industry’s leading firm, Amgen, has not developed a successful biotechnology industry, nor has it developed a social structure to support marketplace formation in the region. In sum, through exploring scenarios by which social structures supporting high-technology industry emerge (or, in the case of Los Angeles, fail to emerge), the article aims to contribute to broader debates theoretical exploring the sociological basis of economic development.