Professor Brett Gilbert looks at how tech clusters emerge in cities

Thursday, December 4, 2014

Rutgers Business School professor Brett Gilbert spent part of her summer in South Africa studying the forces within Johannesburg that are capable of both helping and handicapping the development of an entrepreneurial technology community.

The research will ultimately compare Johannesburg with Newark, where a cluster of tech entrepreneurs is starting to grow. The research, which Gilbert is compiling with a former Rutgers Business School professor and two PhD students, will help to better explain what is happening in cities and regions as tech clusters emerge.

Professor Brett Gilbert

Professor Brett Gilbert

Global Entrepreneurship Week seemed like an ideal time to check in with Gilbert and showcase some of the expertise Rutgers offers to entrepreneurs and entrepreneurial students.

Here are excerpts from a conversation with Gilbert:

"I’ve been doing research in Johannesburg, South Africa, to understand what the city needs to do to better support technology entrepreneurs. The city is actively in the process of trying to see a tech cluster emerge so my research is intended to help them understand what needs to happen in order to see a tech community thrive in Johannesburg. Its research I’m doing concurrently in Newark, New Jersey, as well because the city would like to see a technology community emerge here. The research is really comparing the process these two cities are going through in order to see how technology communities emerge.

"Most research on clusters really focuses on clusters that already exist and on regions that are somewhat well established so you don’t really see a lot that helps people to understand what would a city or region need to do if they wanted to see one of these technology clusters emerge.

"There’s a pretty significant gap in our literature about what needs to happen in order for these technology communities to actually emerge and thrive. Any research that does exist tends to look kind of retrospectively at the existing clusters and the conditions that were in place when the clusters were emerging, but again, it’s more of a historical perspective of what was happening so there’s a lot gets missed in that process. Our research is trying to look at it in real time and trying to understand what is happening as these tech clusters attempt to emerge.”

"So we’re still analyzing the data at this point. But in general, it looks as though there are different contexts between the two cities. For example, in Johannesburg, they do have technology companies, larger technology companies, that are there and have been there for a while, but most of them are multi-national corporations and so they haven’t necessarily been spawning out entrepreneurs. They basically bring people in to work for the company. While those people might develop technologies for the company, there’s not a lot of entrepreneurial activity happening. A lot of the people who have technology skills tend to get funneled into the larger companies and that also tends to suppress some of the entrepreneurial dynamics. There’s also other factors. Legally, there are different regulations in place that make it difficult for entrepreneurs to succeed. There are also culture factors in Johannesburg that could be suppressing the emergence of entrepreneurs. In particular, failure is basically frowned upon in South Africa, and you have to be accepting of failure in order to see start-up technology companies, in particular, succeed.

"In Newark, it’s a little bit different because there has not been a long history of large technology companies in the city. We’ve seen some move in during the past five or six years or so. We’re seeing more of a grassroots effort for technology entrepreneurship. That’s very different than what’s happening in Johannesburg. In Newark, it seems, in part, to be driven by some of the technology companies that currently exist, but it’s also driven by a lot of the entrepreneurs already in the area.”

"Interestingly, both of the cities have the potential (to see technology clusters emerge.) There are a lot of ingredients present in both cities, but because of the starting points, they’re going to evolve differently. It may be that you see it happen in Newark faster than you see it happen in Johannesburg just because there is a very strong entrepreneurial culture in Newark already. You have a lot of individuals who are actively pursuing technology companies, and you don’t really see that level of activity in Johannesburg at this point. In South Africa, Cape Town has a much larger technology community presence than Johannesburg. My guess is from a national standpoint, they would probably put resources into developing Cape Town over developing Johannesburg. Here in New Jersey, obviously, we have proximity to New York City, so it’s possible you would see a spillover of companies moving to New Jersey to take advantage of cost benefits and all of that stuff.”

"Global Entrepreneurship Week really is important. A lot of people don’t really understand entrepreneurship. They don’t recognize it as being unique and different. Global Entrepreneurship Week lets people know this is another option. You don’t necessarily have to follow the path of going to work for a company. You can build your own company. The more we’re able to promote entrepreneurship, the more we may be able to get people interested in being entrepreneurs.”

TAGS: Brett Gilbert Business Insights City of Newark Entrepreneurship Faculty Research Technology Thought Leadership