Saxenian conducted a comparative study of two regions that focused on electronic industry; Silicon Valley and Route 128. Between these two, reports showed that as of 1990, Silicon Valley emerged as more competitive and successful than Route 128. Saxenian conducted interviews in the area and found out that the employee mobility in Silicon Valley was higher. To argue that such mobility is the reason why Silicon Valley succeeds was something that defies the common knowledge and principles of economics.
Such action would inevitably lead to a leakage of information across different organizations and might affect competition. When one company get holds of the other company’s innovative knowledge, they would apply the knowledge to their own company or use it towards their own advantage. Another observation that was made by Saxenian was the prevalence of collaboration in their network-based system and the promotion of “open-markets that encourage competition and entrepreneurship”.
Through network-based system, knowledge was spread horizontally. The presence of new organizations or corporations are welcomed and supported. On the other hand, in Route 128 wherein companies are integrated to the point that competition becomes limited to the largest firms. Knowledge and authority “flows vertically” or stay within the firm. Nonetheless, through the development of the internet and other telecommunication technology, Saxonian’s argument no longer holds for a similar comparison today.
The internet permits employees and employers among different firms or agencies to communicate. Cluster networks in a particular regional economy can communicate or exchange information with firms or companies abroad. Knowledge is retrieved more promptly and more accurately today through internet search engines. Job hopping or employee mobility was not a major factor today than before since information are more readily available than 20 years ago.