Utilizing “The diamond of national advantage” for technology start-ups:A comparison of location advantages of the Silicon Valley and the technology cluster in the Toronto-Ottawa region

Abstract

The Silicon Valley is the best-known business around the world and when it comes to technology also the most successful one. Furthermore, it is especially famous for its environment for technology start-ups, of which some have grown to multi-billion-dollar businesses such as Apple. However, recently the supremacy of the Silicon Valley as the dream location for technology start-ups started to decrease, for example, due to increasing rent prices and more restricting immigration regulations. Hence, the attention has shifted to other technology clusters including the Toronto-Ottawa region, which has been growing for the last years and has also already been the origin for world-wide successful technology start-ups including Blackberry. Therefore, this paper will concentrate on comparing the location advantages of the Silicon Valley and the Toronto-Ottawa region with the help of Porter´s “Diamond of national advantage” in order to identify which cluster has the potential to become the favoured location for technology start-ups. The different factors of the diamond are analysed, and the results are ranked and compared through a model developed within the thesis. It was found that the Silicon Valley is still the most advantageous location for technology start-ups, however the Toronto-Ottawa region and hereby especially the Toronto-Waterloo corridor has the potential to surpass the American cluster in the future. However, the region