“Stay small” syndrome in the rise and stall lifecycle of industrial clusters: evidence from Sapporo Valley cluster

This chapter examines IT entrepreneurs and clusters in Sapporo, pivotal in Japan’s PC industry development during the 1970s and 1980s. It spotlights theoretical gaps overlooked by high-growth entrepreneurial ecosystem theory using historical examples. Through 27 years of observations, internal documents, published materials, and interviews, it reveals the lifecycle of the Sapporo IT cluster, including a stagnation period. The study identifies that the collapse of a major financial institution significantly impacted risk-taking behaviors in the cluster. The entrepreneurs’ resistance to management and growth avoidance is noted. The chapter suggests that self-sustainable and high-growth entrepreneurial ecosystems coexist within the IT cluster. Furthermore, the self-sustainable entrepreneurial ecosystem serves as the underlying bedrock of the high-growth ecosystem, contributing to the cluster’s sustainability, but encompassing a different logic than the high-growth orientation.