Trajectories of industrial districts: Impact of strategic intervention in medical districts

Actors employ strategic intervention to alter the trajectory of an industri al district because they are dissatisfied with an existing or expected tr;t rajectory. In this study we examine two medical industrial districts. In th e Philadelphia biotechnology district, strategic intervention altered its t rajectory; and in the Minneapolis biomedical technology district, the traje ctory of the district has altered but no strategic intervention emerged to redirect the trajectory. The structure and, functioning of social networks within each district had an impact on the strategic interventions. Philadel phia housed a larger array of powerful firms and institutions than Minneapo lis, but no pharmaceutical giant dominated the spawning of spin-offs in Phi ladelphia comparable to the dominance of Medtronic in Minneapolis. Diverse medical facilities in Philadelphia diffuse technological information and co ntacts about starting firms, whereas the University of Minnesota Medical Sc hool and its research institutes create a centralized source of information and contacts. The venture-capital sector of Philadelphia draws on diverse pools of capital, with no dominant vested interest to defend sectors of bio technology: however, in Minneapolis, a few financial actors and large firms direct that allocation of capital. Philadelphia contains numerous public-p rivate partnerships; Minneapolis does rot have that diversity. As increased FDA regulation and pressure from managed care firms create conditions that favor large firms, the Philadelphia region continues to support small firm s, whereas the Minneapolis region is withdrawing support. Philadelphia's wi de-ranging social networks provide a more supportive framework for small fi rms than exists in Minneapolis, where the social networks have greater cent ralization and redundancy.