Clusters of high-tech industry, such as Silicon Valley, have received a great deal of attention from scholars and in the public policy arena. National economic growth can be fueled by development of such clusters. In the United States the long boom of the 1980s and 1990s was largely driven by growth in the information technology industries in a few regional clusters. Innovation and entrepreneurship can be supported by a number of mechanisms operating within a cluster, such as easy access to capital, knowledge about technology and markets, and collaborators. This generates a higher rate of technical progress and one more attuned to market needs. These clear benefits have drawn scholarly, business, and government interest to industrial clusters.

Established clusters of high-tech industry, such as the Silicon Valley of today, have a number of well-documented advantages for innovation. Entrepreneurs find access to capital easier in a cluster, and venture capitalists and investment bankers find it easier to locate new investment opportunities. Universities with strong technical research capabilities, such as Stanford and Berkeley in Silicon Valley, are closely linked to commercial activities. Firms in a cluster participate in thick markets for technical labor, managers, and other inputs. Information about new technical and market opportunities flows through a cluster's institutions and through its informal networks very rapidly. Many of these benefits arise by capturing external economies, lowering the costs of invention and growth at large scale.