Clustering in the Creative Industries: Insights from the Origins of Computer Software

We use several different sources (a 1970 Roster of Organizations in Data Processing and the 1960 and 1970 Censuses of Population) to study patterns of geographic clustering at the very origins of the software industry. We find a strong trend toward clustering of the industry in a few metropolitan areas. Furthermore, we uncover a tendency in the early software industry to agglomerate in close proximity to some of its main customers. This tendency holds even after controlling for region-specific heterogeneity and for the potentially endogenous nature of the software customers' location decisions. We explore the factors that may have driven the observed clustering patterns and suggest directions for further research.