Does a clustered location matter for high-technology companies' performance? The case of biotechnology in the Netherlands

Young entrepreneurial companies in biotechnology tend to cluster in space, nearby research universities and research centers. This pattern is often ascribed to the availability of external economies, mainly local knowledge spillovers that help to reduce the uncertainty from a disruptive technology faced by these companies. Given a shortage of empirical research on cluster advantages and performance of clustered companies, we present results of a comparative analysis of clustered and non-clustered companies in biotechnology and Bionanotechnology in the Netherlands. It appears that, among other influences, a clustered location has no significant influence on innovation and speed of growth. However, a location in the largest cluster (Leiden) does contribute to a better performance in terms of innovativeness compared with all other locations. The kind of external economies involved seems to vary according to the stage in the knowledge value chain and the segment in biotechnology industry. Knowledge spillovers tend to be local for companies involved in new drugs and diagnostics research only in the first stage of the knowledge chain and for service companies regardless of the stage in the knowledge chain.