A cluster of Internet companies in Tokyo: Review of Bit Valley
Kou Yukawa
Senior Associate
Economic Research Center
Fujitsu Research Institute
Abstract
The Internet is an innovative channel for distributing information that generates new types of businesses and urges existing industry’s organizational restructuring. As a consequence, the IT industry has to adapt to the speed of technological innovation and to the emergence of new products and services more quickly than other industries.To adapt to such a business environment, IT companies tend to locate themselves in the proximity of specific regions and form a clusters such as Silicon Valley and Silicon Alley in the United States. In these clusters networks of personal contacts are likely to be developed because of the proximity of companies and to bring about industry-wide progress. These clusters may be regarded as communities of the same kind of specialists located in the same neighborhood. Once such communities are formed, the distribution of information inside the communities speeds up, quality and quantity of information are enhanced and the frequency of product innovation increases. This consequently leads to the progress of the entire industry located in a specific region. A concentrated region, on the other hand, is only a cluster if networks of personal contacts and communities have been formed in the region. Thus the key concept of the cluster is community.
By focusing the clustering process and current status of Bit Valley, Tokyo’s cluster of Internet companies, this paper discusses about (1) formulation of communities of Internet companies, (2) communities that evolved into brand, (3) decline of the brand after the collapse of the bubble and (4) future of the cluster of Internet companies in Japan. Based on these analysis of Bit valley, this paper also suggest to support coordinators and branding as policy implications for the cluster of Internet companies.