The dynamic economic engine at Silicon Valley and US Government programmes in financing innovations

This paper is concerned with the development of Silicon Valley, the government programmes in financing innovations and the specific characteristics/factors contributing to the success of the valley. It is argued that the capacity to foster clusters of innovation, an effective use of university resources, the supporting infrastructure, the culture of a willingness to accept risk as well as the venture capital (VC) programmes are catalysts for the economic development at Silicon Valley. By using Porter's competitive Diamond Model as a basis to examine the activities in the US Silicon Valley, the study attempts to fill a gap in practical VC management research which is practically non-existent and provide valuable insights for policy makers.