Alum Cristobal Cheyre Stresses Importance of Entrepreneurs and Ideas for Clusters
Cristobal Cheyre recently finished his dual degree doctoral program in Technological Change and Entrepreneurship (TCE), at Instituto Superior Técnico of the Universidade de Lisboa (IST/UL), Católica-Lisbon School and Carnegie Mellon University (CMU). During his five years of studies, he focused his research work on “Inventor Mobility, Knowledge Spillovers and Spinoff Entry in the U.S. Semiconductor Industry: Regional Patterns, Determinants, and Learning Implications.”
Co-advised by Caterina Moschieri from Católica-Lisbon School, and Steven Klepper and Francisco Veloso, from Carnegie Mellon University, Cristobal Cheyre explained that his “results are interesting for policy makers and for the understanding of the benefits and costs of industry clustering,” and also in terms of “economic theory,” because they “provide interesting insights on how we understand the benefits of industry clustering.” Among other findings, this young researcher concluded that “the higher rate of inventor mobility in Silicon Valley is greatly related with the entry of spinoffs in the region,” and that “spinoffs hire several inventors from their parents.”
Cristobal Cheyre stressed that “what was truly unique of Silicon Valley in this period was a group of extraordinary inventors that started firms pursuing ideas that transformed the world”, and what drove “worker mobility and the dynamism of clusters were ideas and entrepreneurs.” Therefore, he concludes, “what policy makers should take from this is that they have to attract entrepreneurs, and provide the conditions for ideas to get to the market.” To better explain this recommendation, Cristobal Cheyre gave as example the organizers of the StartUp Chile initiative, which are “attracting entrepreneurs with good ideas from all over the world and provide them with capital and support to pursue their ideas.”
One of the most recent achievements of Cristobal Cheyre’s research was the publication of the paper “Spinoffs and the Mobility of U.S. Merchant Semiconductor Inventors,” co-written with Francisco Veloso and Steven Klepper, in the leading journal Management Science. For him, this was a “recognition to the quality of the work, and the value of our findings.”
After his graduation, Cristobal Cheyre was invited to become a postdoctoral researcher at Carnegie Mellon University, where he conducts research in collaboration with faculty members from CMU and Católica-Lisbon School. In the future, he also plans “to look for a faculty position” in which he can continue to develop his research on entrepreneurship and technological innovation.
CMU Portugal: How was your experience as a dual degree graduate student, who spent time both in Portugal, at Católica-Lisbon School and IST/UL, and in the U.S., at Carnegie Mellon University?
Cristobal Cheyre: I enjoyed the opportunity of completing my Ph.D. in two different countries that I like and with the support of outstanding institutions. It was a good experience at the personal and professional level. I think the main advantage of spending time at different universities is getting to know more people, with different interests and views. It sure entails greater difficulties, as coordination is never easy, and it can require quite a bit of work, but overall it was a positive experience.
CMU Portugal: "Inventor Mobility, Knowledge Spillovers and Spinoff Entry in the U.S. Semiconductor Industry: Regional Patterns, Determinants, and Learning Implications," was the theme of your thesis. What were your main findings?
CC: My thesis studied the role of inventor mobility on spinoff entry in the semiconductor industry. This is an industry that is notoriously famous due to its clustering in Silicon Valley, and that has received a lot of attention from policy makers as an example to follow. There are many governments trying to replicate the success of Silicon Valley, following several different theories of what makes this region so successful. We focus in one particular factor that we believe is of prime importance, which is inventors that leave their employer to create their own firm. In the first part of the thesis, I show that the higher rate of inventor mobility in Silicon Valley is greatly related to the entry of spinoffs in the region. What is happening is that many firms are constantly being created in Silicon Valley, and to get started these firms hire many experienced inventors from other firms. The second and third part of the thesis look at the characteristics of the inventors hired by new firms, and at how new firms use the previous knowledge of these inventors. As should be expected, I find that spinoffs hire several inventors from their parents. These workers bring in the necessary knowledge to start the firm. What is surprising is that spinoffs also hire many inventors from other unrelated semiconductor firms. There wasn't any particular characteristic that explained why these inventors were hired instead of others. In the final part of the dissertation I show that these inventors were hired due to their general knowledge about the industry, and not so much for specific things they may have made with their previous employer.
“What was truly unique of Silicon Valley in this period was a group of extraordinary inventors that started firms pursuing ideas that transformed the world.”
CMU Portugal: What do you think will be the impact of these findings?
CC: The results are interesting for policy makers and for the understanding of the benefits and costs of industry clustering. I think the most interesting part from the side of policy is that it highlights the importance of entrepreneurs and ideas. According to my results, what drives the dynamism of Silicon Valley is the generation of ideas that lead to new firms. Thinking back to the times Silicon Valley started to grow, there wasn't anything that would make you think this region would turn to be the most notable cluster in the world. What ignited the cluster was that William Shockley decided to start his firm there, which later led to the establishment of Fairchild Semiconductors by some of his employees, which in turns led to many other spinoffs. When these firms entered, they didn't have a cluster to support them; in fact, the electronics industry was concentrated mostly in the other side of country. As I show in the thesis, they solve this by hiring most of their workforce from other regions. What was truly unique of Silicon Valley in this period was a group of extraordinary inventors that started firms pursuing ideas that transformed the world.
CMU Portugal: What about the contribution to theory of your findings?
CC: In terms of economic theory, my results provide interesting insights on how we understand the benefits of industry clustering. It is frequently argued that the greater mobility of workers in clusters helps all firms located in them to stay at the forefront of the technology. The argument is that as workers move through different firms, they help to disseminate knowledge across the cluster. My results show that most of the mobility corresponds to inventors moving from incumbents to spinoffs. This suggests that spinoffs are benefiting disproportionately from this mechanism, and that incumbents are bearing the cost of constantly loosing workers to new firms. As we know that incumbents don't move away from clusters, incumbents must enjoy other benefits of being located in agglomerated regions.
CMU Portugal: From this research, you recently published the paper "Spinoffs and the Mobility of US Merchant Semiconductor Inventors,” co-authored by Francisco Veloso and Steven Klepper, in Management Science, a leading management journal. What is the importance of this achievement?
CC: That the paper is getting published in a leading journal is recognition to the quality of the work, and the value of our findings. I'm very glad of seeing a work where I, along with Steven and Francisco, worked for a long time is getting published in such a good journal. This will also help the paper reach a broader audience.
“A notable recent example is the case of StartUp Chile. In this program they are attracting entrepreneurs with good ideas from all over the world and provide them with capital and support to pursue their ideas.”
CMU Portugal: The paper shows how firm entry, and spinoffs in particular, explain the celebrated high levels of inventor mobility in Silicon Valley. You found that there is no extra mobility in a cluster between established firms; so you need entrepreneurship (and spinoffs) to have strong mobility. Is this true? What data did you analyze, and in what sense can these conclusions be of use by other clusters or by public authorities when a cluster is being put into place?
CC: I think this exactly highlights what I already mentioned. What drives worker mobility and the dynamism of clusters are ideas and entrepreneurs. What policy makers should take from this is that they have to attract entrepreneurs, and provide the conditions for ideas to get to the market. A notable recent example is the case of StartUp Chile. In this program they are attracting entrepreneurs with good ideas from all over the world and provide them with capital and support to pursue their ideas. This contrasts with what has been tried many times, which is attracting big corporations to start a cluster. The program is based on the concept that if you attract entrepreneurs and provide them with the means to develop their ideas, an entrepreneurial revolution will follow.
CMU Portugal: Now that you have finished your Ph.D., what will you do next? How do you envision yourself in the future?
CC: I'm currently a postdoctoral researcher at Carnegie Mellon. I'm developing a couple of research projects, some of them in collaboration with faculty from CMU and Catolica-Lisbon School. I'm also co-teaching a seminar course on innovation management at CMU, and I am teaching a course on Strategy and Management of Technological Innovation. My future plan is to look for a faculty position where I can continue to develop my interests on entrepreneurship and technological innovation.