Silicon Valley has become shorthand for a globally acclaimed way to unleash the creative potential of venture capital, supporting innovation and creating jobs. In The Venture Capital State Robyn Klingler-Vidra traces how and why different states have adopted distinct versions of the Silicon Valley model.
Venture capital seeks high rewards but is enveloped in high risk. The author’s deep investigations of venture capital policymaking in East Asian states (Hong Kong, Taiwan, Singapore) show that success does not reflect policymakers’ ability to replicate the Silicon Valley model. Instead, she argues, performance reflects their skill in adapting a highly lauded model to their local context. Policymakers are "contextually rational" in their learning; their context-rooted norms shape their preferences. The normative context for learning about policy—how elites see themselves and what they deem as locally appropriate—informs how they design their efforts.
The Venture Capital State offers a novel conceptualization of rationality, bridging diametrically opposed versions of bounded and conventional rationality. This new understanding of rationality is simultaneously fully informed and context based, and it provides a framework by which analysts can bring domestic factors to the very heart of international diffusion of policy. Klingler-Vidra concludes that states have a visible hand in constituting even quintessentially neoliberal markets.
List of Illustrations
1. The Venture Capital State
2. Contextual Rationality
3. Venture Capital and VC policy
4. Hong Kong: Night-Watchman State
5. Taiwan: Private Sector Promoter
6. Singapore: Financier and Director
7. Analyzing Sources of Adaptation
8. The Future of Venture Capital States: Distinct Interventions to Build Markets
List of Interviews
"The book offers a timely and important analysis for political economists researching the intersection of state and market.... The venture capital state offers valuable analytical tools for scholars working on explaining patterns of limited international convergence. It brings the growing world of venture capital square into political economy scholarship."
"This informative book examines in detail three such attempts—in Hong Kong, Singapore, and Taiwan—and draws on the experiences of related ventures in several other places, including Israel and Japan.... She [Klingler-Vidra] does show that the venture capitalists supported by governments tend to invest in older, already profitable firms rather than true start-ups."
"Klingler-Vidra's analytical themes march relentlessly throughout the book.... The author certainly demonstrates the seductive appeal of venture capital funding in varied global settings."
"Klingler-Vidra gives an empirically rich account of three country cases detailing how their venture capital policies have varied over time and continue to differ from one another. This book has the potential to make a valuable contribution to the political economy literature."
Linda Weiss, Professor Emeritus, Department of Government and International Relations, University of Sydney, and author of America, Inc.?
"Klingler-Vidra draws knowledgeably and substantially on an extensive and broadly eclectic body of literature spanning multiple disciplines and theoretical approaches. She uses this material effectively to provide a synthetic and heuristic explanation for the absence of neoliberal convergence and presence of locally diverse and interventionist policies in the diffusion of the Silicon Valley venture capital model."
Karl Fields, Professor, Department of Politics and Government, University of Puget Sound
"It is an important contribution to scholarship on entrepreneurship and venture policy along the lines of Josh Lerner's seminal Boulevard of broken dream."