Within the regional learning and innovation literature, the precise impact of regional ‘culture’ on firms’ competitive performance remains unspecified. In response, this paper draws on research on Utah’s high-tech industrial agglomeration, embedded in a highly visible regional culture: Mormonism. Focusing specifically on computer software firms, the paper first shows how the cultural embeddedness of firms in the region is best understood as a series of sustained tensions between: (1) self-identified regional cultural traits imported into the firm; versus (2) key elements of corporate cultures known to underpin innovation. Second, the paper measures the material impact of that regional cultural embedding on firms’ innovative capacities and hence abilities to compete. Finally, it outlines the wider relevance of the author’s work with regard to the spatial limits imposed on high-tech cluster policy by cultural context.

1. Regional Studies, Vol. 39.9, pp. 1197–1216, December 2005
Demystifying the Role of Culture in Innovative
Regional Economies
AL JAMES
Department of Geography, University of Cambridge, Downing Place, Cambridge CB2 3EN, UK.
Email: al.james@geog.cam.ac.uk
(Received February 2004: in revised form January 2005)
J A. (2005) Demystifying the role of culture in innovative regional economies, Regional Studies 39, 1197–1216. Within
the regional learning and innovation literature, the precise impact of regional ‘culture’ on firms’ competitive performance
remains unspecified. In response, this paper draws on research on Utah’s high-tech industrial agglomeration, embedded in a
highly visible regional culture: Mormonism. Focusing specifically on computer software firms, the paper first shows how the
cultural embeddedness of firms in the region is best understood as a series of sustained tensions between: (1) self-identified
regional cultural traits imported into the firm; versus (2) key elements of corporate cultures known to underpin innovation.
Second, the paper measures the material impact of that regional cultural embedding on firms’ innovative capacities and hence
abilities to compete. Finally, it outlines the wider relevance of the author’s work with regard to the spatial limits imposed on
high-tech cluster policy by cultural context.
Regional culture Embeddedness Innovation High-tech Mormonism Salt Lake City, Utah
J A. (2005) De´mystifier le roˆle de la culture dans les e´conomies re´gionales innovatrices, Regional Studies 39, 1197–1216.
Dans la documentation sur la connaissance et l’innovation re´gionales, l’impact pre´cis de la ‘culture’ re´gionale sur la performance
compe´titive des entreprises reste non spe´cifie´. En guise de re´ponse, cet article cherche a` puiser dans la recherche sur la technopoˆle
industrielle de Utah, qui se trouve ancre´e dans une culture re´gionale tre`s e´vidente, a` savoir le mormonisme. Portant sur les
entreprises de logiciels, on cherche primo a` de´montrer que l’ancrage culturel des entreprises situe´es dans la re´gion est mieux
connu comme une se´rie de tensions soutenues entre: (1) des traits culturels re´gionaux autonomes qui sont importe´s en
l’entreprise; contre (2) des e´le´ments cle´s des cultures d’entreprise qui e´tayent l’innovation. Secundo, on mesure l’impact mate´riel
de cet ancrage culturel re´gional sur la capacite´ des entreprises a` innover et, par la suite, sur leur compe´titivite´. Pour conclure, on
esquisse l’importance plus large de ce travail pour ce qui est des limites ge´ographiques qu’impose le cadre culturel sur la politique
des technopoˆles.
Culture re´gionale Ancrage Innovation Technopoˆle Mormonisme Salt Lake City, Utah
J A. (2005) Entmystifizierung der Rolle, die Kultur in innovativen Regionalwirtschaften spielt, Regional Studies 39,
1197–1216. In der Literatur u¨ber Regionalstudium und Innovation wird die exakte Wirkung regionaler ‘Kultur’ auf die
Wettbewerbsleistung von Firmen nicht genauer ausgefu¨hrt. In Erwiderung darauf bezieht sich dieser Aufsatz auf Forschungsarbeit
betreff Utah’s hochtechnologischer Industrieballung, die er als im Mormonentum, einer offenkundig regionalen Kultur,
eingebettet darstellt. Der Autor konzentriert sich zuerst besonders auf Komputersoftwarefirmen, um aufzuzeigen, wie kulturelles
Eingebettetsein von Firmen der Region am besten als eine Serie anhaltender Spanungen zu verstehen ist, und zwar solcher
zwischen (1) selbst ausgewiesener regionaler kultureller Wesenszu¨ge, die in Firmen eingebracht werden, und (2) Schlu¨sselemente
gemeinsamer Kulturen, die dafu¨r bekannt sind, Innovation zu untermauern. Sodann mißt der Autor die materielle Auswirkung
jener regionalen Kultureinbettung auf die innovativen Fa¨higkeiten von Firmen, und daher Wettbewerbsfa¨higkeit. Abschließend
umreißt er die weitere Relevanz seiner Arbeit in Hinsicht auf die ra¨umlichen Grenzen, die einer hochtechnologischen
Clusterpolitik durch kulturellen Zusammenhang auferlegt werden.
Regionale Kultur Eingebetttsein Innovation Hochtechnologie Mormonentum Salt Lake City, Utah
J A. (2005) Desmitificar el rol de la cultura en las economı´as innovadoras de las regiones, Regional Studies 39, 1197–1216.
En el marco de la literatura de aprendizaje y de innovaciones por regiones, au´n no se especifica el impacto exacto de la ‘cultura’
de las regiones en el rendimiento competitivo de las empresas. Como respuesta, este documento se basa en una investigacio´n
llevada a cabo en Utah sobre la aglomeracio´n industrial de alta tecnologı´a, arraigada en una cultura regional bien visible: el
Mormonismo. En primer lugar, demostrare´, centra´ndome especialmente en empresas de software, de que´ modo la integracio´n
cultural de las empresas en la regio´n se entiende mejor como una serie de tensiones sostenidas entre: (i) rasgos autoidentificados
de culturas regionales importadas en la empresa; frente a (ii) los elementos ba´sicos de las culturas corporativas de los que se sabe
0034-3404 print/1360-0591 online/05/091197-20 ©2005 Regional Studies Association DOI: 10.1080/00343400500389968
http://www.regional-studies-assoc.ac.uk

2. 1198 Al James
que respaldan la innovacio´n. En segundo lugar, hago una medicio´n de las repercusiones importantes que esta integracio´n cultural
de las empresas tiene en sus capacidades innovadoras y, por lo tanto, en sus habilidades para competir. Para terminar, resumo la
relevancia ma´s amplia de mi trabajo con respecto a los lı´mites espaciales que el contexto cultural impone sobre la polı´tica para
aglomeraciones de alta tecnologı´a.
Cultura regional Integracio´n Innovacio´n Alta tecnologı´a Mormonismo Salt Lake City
JEL classifications: L21, O31, P17, Z13
INTRODUCTION conceptualized and empirically verified in the regional
learning and innovation literature.
Over the last two decades, the new information econ-
omy is widely regarded as having forged a new paradigm
of competition in which learning and innovation are THE MYSTERY OF CULTURE IN
key to corporate, regional and ultimately national INNOVATIVE GROWTH REGIONS
competitiveness. Innovation may involve new product
The regional innovation and learning literatures aredevelopment based on research and development
now vast (for a useful review, see M et al.,(R&D) or new process development based on the
2002). However, at the broadest level, the advantagesapplication of new technologies for continuous incre-
of industrial agglomeration are seen to emerge frommental improvements in the production process (G
localized information flows, technological spillovers andand P, 1998). Either way, firms that innovate
collective learning. These are in turn premised onmore consistently and rapidly typically employ more
networks of interaction between firms that serve asworkers, demand higher skills, pay higher wages and
sources of knowledge dissemination and informationoffer more stable prospects for their workforce (OECD,
diffusion within the region (C, 1999). Scholars1996). As such, scholars have been keen to examine how
have also focused on the qualitative rules, conventionsregions help foster conditions conducive to innovation.
and norms on which actors draw to combine variedHowever, while the formal ‘hard’ institutions that
skills, competencies and ideas to create new knowledgeunderpin innovative regional economies are relatively
and so underpin innovation (e.g. D andwell theorized, their cultural bases are still not fully
M, 2001). As such, learning and innovationunderstood. While many accounts are typically sugges-
are now widely conceived as inseparable from thetive of something intangible that permits innovation to
regional cultural contexts in which they occurproceed in some places but not in others, they often
(M and O, 1999; G and W,fail to specify the exact nature of these ‘mysterious’
2001; G, 2004).processes through which regional cultures promote
The most common framework employed has been ainnovative activity more successfully in some regions
geographical application of G’s (1985)than in others.
notion of embeddedness (e.g. S, 1994,This paper develops a more rigorous framework for
1997; M, 1995). Drawing inspiration from theunderstanding the ways in which regional culture shapes
work of P (1944), the embeddedness thesisand conditions the abilities of firms within regional
rejects neoclassical conceptions of the economy as aindustrial systems to innovate, and hence to compete.
self-determining discrete entity governed by an always-The study focuses on the high-tech industrial agglom-
the-same ‘pure’ economic logic. Instead it argues thateration in Salt Lake City, Utah, which is embedded in
economic rationality is fundamentally socially inflected,a highly visible regional culture: Mormonism. First, it
and hence that one cannot understand the workings ofwill be demonstrated how firms’ cultural embeddedness
economic processes in a given place and time withoutis best understood in terms of a series of tensions
simultaneously interrogating the social systems thatbetween self-identified regional cultural traits imported
underpin them (B, 1990). Accordingly, scholarsinto the firm versus key elements of corporate cultures
have examined how culture – in the form of collectivethat have been consistently shown in the regional
beliefs, values, norms, conventions, ideologies, taken-learning literature as being central to firms’ abilities
for-granted assumptions and lifestyles – sets limits toto innovate (also J, 2003). Both enablers and
economic rationality and shapes intra- and inter-firmconstraints on firms’ innovative capacities stem from
practices. S’s (1994) work on the divergentthe same regional culture in which they are embedded.
economic performances of California’s Silicon ValleySecond, the overall material impact of cultural em-
and Boston’s Route 128 in the 1980s first demonstratedbedding on firms’ abilities to innovate, and hence to
explicitly the crucial importance of local cultural deter-compete, will be measured. Third, the paper discusses
minants of industrial adaptation. Indeed, it is nowthe wider policy relevance of the author’s analysis,
difficult to explain the continuing competitive advan-arguing that culture will continue to be sidelined in
high-tech cluster policy as long as it remains poorly tage of certain industrial clusters over others if their

3. Demystifying the Role of Culture in Innovative Regional Economies 1199
cultural conventions, rules of behaviour and explicit standards, customs and the ‘rules of the game’ that
accord are not taken into account. underlie social interactions within the firm. These
However, while there is a growing consensus that conventions are in turn linked to a deeper set of
distinctive regional ‘cultures’ play a vital role in facili- underlying core values (also called philosophies or
tating innovation, these links remain poorly understood. ideologies) that provide more general guidance in
Accounts return continually to the cultural properties shaping behaviour patterns within the firm (K
of these regions, yet rarely specify the exact nature and H, 1992; S, 1992; D and
of the processes by which regional cultures promote K, 2000). Corporate cultures are thus seen as
innovative activity more successfully in some regions coherent and unifying systems that ensure stability and
than in others (A, 1996; S, 1997). There the smooth running of organizations through defining
is often circularity; that innovation occurs because of appropriate ways of behaving, attitudes and ways of
the presence of certain cultural institutions, and that thinking.
those cultural institutions are what exist in regions It is argued that one might also apply this model at
where there is innovation. Indeed, while it is Saxenian the regional scale, whilst simultaneously recognizing
who takes us furthest away from this unsatisfactory state that corporate cultures and regional cultures do not
of affairs, even Saxenian does not thoroughly establish exist in isolation from each other. Thus, rather than the
the causal link between the competitive culture all-encompassing notions of ‘regional culture’ typically
described and the success of Silicon Valley as a regional employed in the regional learning and innovation litera-
economy – nor does Saxenian actually measure it ture, a regional culture hierarchy needs to recognized
(M, 1999, p. 879). As such, culture has that is made up of the following: (1) individual corporate
become a kind of ‘dustbin category’ in regional studies cultures; (2) a regional industrial culture; and (3) the
for anything one cannot explain, and is, therefore, in broader regional culture in which these are set. Once
dire need of demystification (G, 1997, 2004). regions’ cultures are unpacked in this way, it allows a
conceptualization of the cultural embedding of firms
in the region in terms of the overlaps between the
UNPACKING THE FUZZY REGIONAL different levels of this hierarchy. That is, in terms of
CULTURE DUSTBIN regional cultural systems of collective beliefs, ideologies,
understandings and conventions being imported intoTo begin to demystify the impact of regional culture
firms’ cultural cores, and hence shaping firms’ systemson firms’ innovative capacities, the paper draws on the
of organizational control, rule systems and decision-useful multitiered conception of culture outlined in
making processes (middle layer). As such, observedthe organizational studies literature (Fig. 1). Here,
patterns of corporate behaviour (outer layer) become(corporate) cultures are conceptualized as the sets of
social conventions, embracing behavioural norms, regionally culturally inflected.
Fig. 1. ‘Onion’ model of culture
Sources: S (1992); W et al. (1993); T and H-T (1997); S (1994, 1997)

4. 1200 Al James
The paper outlines how this cultural embedding in (U D  W S,
2001).the region potentially impacts upon firms’ abilities to
innovate and hence compete, and it then tests that The dominant regional culture of the Wasatch Front
is Mormonism. This is the distinctive culture associatedtheory by measuring the material impacts of that across
a series of competitiveness metrics. The case study with the ‘Mormon Church’, or more properly ‘The
Church of Jesus Christ of Latter-day Saints’ (the LDSrequired a regional industrial system whose culture is
highly visible. The paper, therefore, focuses on Utah’s Church), and is especially strong within Utah reflecting
the state’s position as the geographical, political, admin-high-tech industrial agglomeration centred on Salt Lake
City, which is embedded in a strong and distinctive istrative and historical heart of the LDS Church. Salt
Lake City remains the worldwide headquarters of theregional culture: Mormonism. While this is a very
visible case, it is not unique. There are thousands of LDS Church and Mormons make up over 75% of
Utah’s state population (C  J Cregional economies across the world that are also
similarly premised on strong cohesive regional cultures,  L- S, T D N,
2000), the same population from which Utah’s high-including ethnic cultures, trade unions cultures or work
cultures based on particular sectoral specialization, for tech workforce is drawn. Mormon culture is conserva-
tive by popular standards with strong family and com-example. Moreover, some of the most well-known
geographical examples of new industrial districts are munity impulses (M, 2001). It includes prohibitions
against alcohol and drug use, a commitment to fastingalso based on religious regional cultures, albeit key
aspects that are often underplayed. These include and prayer, modesty in dress, an emphasis on family
and obedience to parents, a concern for the elderly andBoston’s Route 128, embedded in New England’s
Protestant culture, which sustains conservative business the poor, and many other social concerns. The church
also opposes abortion, divorce and premarital sex, whilstcultures in local large electronics firms (S,
1994); and the ethnic immigrant networks in Silicon also emphasizing the Protestant ethic of diligence,
education and the attainment of skills (C,Valley premised on Buddhist, Hindu and Shintoist
culture, which connect local firms to dynamic growth 2001).
Three key elements of Mormon culture make itregions in South East Asia (e.g. S, 1999;
S et al., 2002). especially suited to my study. First, Mormonism is more
than simply a creedal faith; it is a whole way of life
requiring an almost total commitment in customs,
values and lifestyle. Indeed, many commentators argue
CASE STUDY: SALT LAKE CITY,
that Mormon culture is so strong that there also exists
UTAH (HIGH-TECH MEETS
a Mormon ethnicity (K, 1993). Second, the
MORMONISM)
demographic dominance of Mormons in Utah creates
the possibility of a denomination-specific dominationSalt Lake City is the main concentration of population
on Utah’s Wasatch Front, an urban corridor made up of Utah’s general culture. Third, Mormonism provides
a regional culture whose central tenets are easily articu-of four counties (Fig. 2), which collectively hold more
than three-quarters of Utah’s population of 2.23 million lated and well known, and whose ideologies are written
down and easily accessible. As such, Utah’s Mormon(Table 1).1
High-tech growth has occurred here in three
waves: a defence industry build-up in the 1960s; growth regional culture is especially visible and has, therefore,
allowed the author to observe and measure the materialof software and services in the 1980s (when many
Silicon Valley firms began to move various functions to impact of cultural embedding on firms’ innovative
capacities.Utah); followed by a cascade of start-ups in the 1990s.
Thus, in 2000, when Utah’s high-tech employment
peaked, the Wasatch Front was home to over 2100 high-
tech firms (90% of Utah’s total high-tech industry),
METHODOLOGY
employing over 70 000 people across a range of sub-
sectors (Table 2). Overall, the paper adopted a multimethod approach,
combining a top-down extensive quantitative surveyComputer Software (SIC 737) is Utah’s lead high-
tech subsector in terms of both employment and the with bottom-up intensive qualitative case study
methods. It also drew heavily on M’s (1994)number of establishments, and as such forms the present
case study industry, based on the premise that if one is framework of inferring regional economic structure
from key informant interviews, moving from individualsto understand a regional economy, then it is lead firms
that should be the focus of one’s analysis (M, to firms, to industry, to regional aggregations, and back
again. As a key first stage, pilot interviews with three1994). Computer Software is also an industry sustained
by rapid rates of product innovation, and one of the firms, chosen because they were enthusiastic and geo-
graphically convenient, were undertaken. These pilotdefining industries of the knowledge economy. Utah’s
computer software industry contributes over 45% of interviews were invaluable in clarifying the subsequent
phrasing of survey and interview questions, the author’sthe state’s total high-tech payroll of US$1.4 billion

5. Demystifying the Role of Culture in Innovative Regional Economies 1201
Fig. 2. Utah State and the four counties of the Wasatch Front (highlighted)
Source: J (2003, p. 6)
self-presentation and the relative importance of areas the Wasatch Front.2
This survey (105 firms in total)
generated data at the regional level across five keyfor discussion.
Second, it was sought to identify broad regional characteristics of firms: (1) basic characteristics in terms
of employment, age, location, etc.; (2) inter-firmpatterns through an extensive survey of the lead 10%
of computer software firms (by 2000 revenue from local relationships and external orientation; (3) financing
histories; (4) in-house technological capabilities andUtah operations only) across the four counties of

6. 1202 Al James
Table 1. Wasatch front populations and workforce, 2001 executive officer (CEO), and various vice-presidents,
premised on the notion that it is these key individuals
Total
who occupy positions of power within the firm, andPopulation employment
hence have a disproportionate sway over its culture
Utah State 2 233 169 1 295 540 (S, 1992).5
Salt Lake City/Ogden MSA 1 333 914 838 879
An overall response rate of just over 50% wasSalt Lake County 898 387 625 119
achieved, and as such the survey dataset covers the topDavis County 238 994 105 031
20% of software firms on the Wasatch Front by 2000Weber County 196 533 108 729
Provo/Orem MSA, Utah County 368 536 176 156 revenue. From an initial analysis of these data, there
seemed to be few differences between the firms thatSource: US B   C (2001).
responded to the survey and those that did not in terms
of size, ownership or location. The firms in the survey
innovative processes (occupational structure, R&D dataset employed 7585 people in Utah and in 2000
employment and expenditure, and R&D intensity3
); generated a combined revenue of US$1031 million
and (5) competitive ‘performance’, in terms of revenue, from their Utah operations.6
Also, the vast majority
rates of revenue growth since start-up and employment (91%) of the firms in the survey dataset were locally
(following S, 2000, p. 75). Crucially, these data owned and controlled.
were also categorized across ‘Mormon’ versus ‘non- Third, it was sought to explain patterns manifest in
Mormon’ versus ‘intermediate Mormon’ firms, defined the survey data through a series of in-depth case
in terms of the proportion of a firm’s founding and studies of firms in SIC 7371 (Computer Programming
management team4
who were active Mormons Services), the subset of firms with the highest response
rate (70%) in the survey. In total, 20 broadly similar(Table 3). These included the company founder(s), chief
Table 2. Utah’s high-tech subsectors, 2000
Number of Number of Utah high-tech
SIC Description establishments employed employment (%)
283 Drugs 53 3998 5.7
357 Computer and office equipment 28 4057 5.8
366 Communications equipment 25 2953 4.2
367 Electronic components and accessories 58 3993 5.7
371 Motor vehicles and equipment 40 7904 11.3
372 Aircraft and parts 40 2744 3.9
376 Guided missiles, space vehicles, and parts 10 5342 7.6
381 Search and navigation equipment 3 645 0.9
382 Measuring and controlling devices 39 1028 1.5
384 Medical instruments and supplies 71 8383 11.9
737 Computer software and data processing services 1438 23 042 32.8
873 Research and testing services 335 6168 8.8
Total 2140 70 257 100
Sources: U D  W S (2001); BEBR (2001), s.v. ‘High tech’.
Table 3. Basic distribution of the survey firm sample
Firm size category
Medium-large
Micro (1–19 Medium (20–99 (100–499
Firm type employees) employees) employees) Total firms
Mormon (Mormon majority founded and Mormon majority
managed) 18 28 12 58
Non-Mormon (non-Mormon majority founded and non-Mormon
majority managed) 10 12 4 26
Intermediate (Mormon/non-Mormon mix of founding and
management) 6 6 9 21
Total firms 34 46 25 105
Note: Of the 105 firms in the survey sample, 89% were founded in Utah, and the remaining 11% typically branch offices of computer software
firms headquartered in other states, especially California. Due to the relatively small number of non-Mormon firms in the medium-
large size category (nó4), statistical comparisons between Mormon and non-Mormon firms in this size category were not included in
the subsequent analysis.

7. Demystifying the Role of Culture in Innovative Regional Economies 1203
Table 4. Basic distribution of case study firm sample by links between groups, and then developing hypotheses
with regard to the mechanisms and patterns that bestfounding and management
explained the data. To make the analysis more robust,
Founding
‘member checking’ was also employed, i.e. checking
Majority non- the credibility of the author’s analytic categories, con-
Majority Mormon Mormon structs and hypotheses with members of the group from
which the data were originally obtained. Whilst theseManagement
Majority Mormon: six firms, Intermediate I: four respondents did not have privileged access to the truth,
Mormon all with a Mormon firms, all with a they did have privileged access to their own opinions
majority workforce Mormon majority and meanings (B and E, 1997), and it is
workforce
upon these experiences that the present analysis hasMajority Intermediate II: four Non-Mormon
been largely based.non-Mormon firms, all with a (control): six firms, all
Mormon majority with a non-Mormon
workforce majority workforce
Note: The case study firm sample shown consists of 20 firms in SIC DECONSTRUCTING THE SOCIO-
7371 (Computer Programming Services), all of which have CULTURAL BASES OF INNOVATIVE
20–99 employees (the dominant firm size category in the
REGIONAL ECONOMIESsurvey), and half of which are located in Salt Lake County
and half in Utah County. At the broadest level, the impact of Mormon culture
on Utah’s computer software industry is manifested
through large numbers of Mormons founding and
managing Utah’s lead software firms. As shown infirms were chosen in order that they covered the
spectrum of Mormon and non-Mormon founding and Fig. 3, almost three-quarters (69%) of the software firms
in the survey sample were Mormon founded; 68% hadmanagement (Table 4). In this case study sample, the
author also expanded the definition of Mormon firms a Mormon majority management team; and 58% were
both Mormon founded and managed ( J, 2003).(based on founding and management) to include the
proportion of total Utah employees in the firm that are Indeed, a further 20% of these lead firms were inter-
mediate Mormon, i.e. they had a Mormon/non-active Mormons.
In 2000, the firms in the case study sample employed Mormon mix in their founding and management
teams.1009 people in Utah; were all locally owned and
controlled; and generated a combined revenue of over Mormons also populate firms’ workforces at lower
levels, comprising approximately 69% of firms’ totalUS$111.3 million from their Utah operations. All these
firms also fell in the 20–99 employee category, the employees in the in-depth case study sample. While
this second sample was purposive, it is nevertheless littledominant size category in the survey sample. Qualitative
data on these firms were generated over 5 months (May– changed when stratified in proportion to the survey
figures given in Fig. 3 (72%).September 2001), primarily through semistructured
interviews with people on the ‘front line’ of their firms. It is argued that these are the broadest indicators of
firms’ embedding in the Mormon regional culture.Employees were targeted in both technical and non-
technical positions at a range of levels within the job However, how much difference do Mormon founders,
Mormon management teams and Mormon majorityhierarchy. A range of industry and culture watchers and
other academics, government, church and economic workforces actually make to the ways these firms
operate, innovate and ultimately compete? It is argueddevelopment officials whose insights might offer im-
portant evidence or counter-evidence for analysis were here that this cultural impact is best understood in
terms of a series of sustained tensions, between self-also interviewed. In total, 100 interviews were con-
ducted and over 130 hours of taped material was gained. identified Mormon regional cultural traits imported
into the firm versus key elements of firms’ corporateConsistency was addressed by means of an interview
topic checklist to be covered with all respondents, cultures that have been consistently shown in the
regional learning literature as central to firms’ abilitieswhilst allowing them freedom to describe their own
experiences in their own terms. Each firm case study to innovate. These are summarized in Table 5, with the
most interesting and significant patterns explained inwas further developed using a number of secondary
data sources (annual reports, memos, etc.) as part of a detail below, given the limitation of space.
It is also stressed that this not an anti-Mormonsource triangulation strategy. In ten cases the author
was also invited to tour the firm, talk freely with other work. While certain elements of Mormon culture
are highlighted here, which when imported into theemployees and observe general goings-on.
Finally, a systematic analysis of the interview tran- workings of local software firms constrain their abilities
to innovate, the aim is to foster a better understandingscripts was undertaken through a process of progressive
qualitative hypothesis testing. This involved coding the of the cultural embedding of firms in the region, not
to deprecate the LDS Church, its beliefs or doctrines.data to break it down, recategorizing it, examining the

8. 1204 Al James
Fig. 3. Mormon/non-Mormon breakdown of the total survey firms (nó105) by founding and management
Source: J (2003, p. 113)
Table 5. Unpacking the cultural embedding of computer Significantly, the Mormon regional culture on Utah’s
Wasatch Front is characterized by strong ethics of unity,software firms on the Wasatch front in terms of its impacts on
innovative capacity reciprocity and mutual commitment that shape and
condition the nature of interaction among its members
Regional Mormon culture Regional industrial/corporate
(A and B, 1992). One way to exam-(self-identified) culture (promoting success)
ine the extent to which local firms import these regional
Unity and mutual trust Interfirm networking and cultural ethics of unity and mutual commitment is to
studied trust
track the extent to which Mormon ownership and
Self-sufficiency and autonomy Outsourcing and exploitation management affect firms’ choice of strategic partners.
of other firms’ competences If Mormon ownership and management do affect the
Debt avoidance Venture capital sought choice of partners, then one should see Mormon
firms choosing Mormon strategic partners over non-Family (then church) above all I: Sleeping bags under the desk
Mormon firms (hence shaping who these firms areII: Afterwork socializing
able, and willing, to interact with and learn from).
Significantly, the Mormon founded and managed firms
in the case study sample do have a higher proportion
Mormon unity and mutual trust versus interfirm networking of strategic partners7
in Utah who are similarly Mormon
and trust through repeated interaction over time founded and managed (67.5%) than do their non-
Mormon (50%) and intermediate Mormon counter-The regional learning and innovation literature has
parts (54%). The in-depth interviews allowed the authorconsistently shown that the capability to innovate
to access the rationales driving these patterns:successfully is strongly conditioned by the ability to
access sources of knowledge via external networks Mormons go to Mormons. I can’t tell you how many
of association and interaction (e.g. C, 1991; times in meetings I’ve heard ‘Oh he’s in my Ward’. And
M, 1995; O and M, 2002). When as soon as they discover I’m not a Mormon there’s a
diverse individuals with partially overlapping knowledge barrier goes up and I have to establish a level of trust that
come together and collectively seek to articulate their would automatically be assumed if I was Mormon.
(Software consultant, non-Mormon male)ideas, they are forced to clarify those ideas and derive
more adequate concepts and models about the technol-
It was an us versus the rest of the world mentality for theogy they are trying to develop (L and L,
first hundred years or more of the church and that
1999, p. 312). Interaction allows ambiguities in the
mentality still translates into business – we are very
perceptions and orientations of the individual partners protective of each other.
to surface, and provides a basis for comparison of (Creative Director, active Mormon male)
evolving ideas with a diversity of other practices that
are not internally generated. As such, there is an The results further suggest that these distinctive
Mormon–Mormon network structures are premised onincreased potential for new unexpected ideas, inter-
pretations and synergies to develop (O and trust.8
Being able to judge the trustworthiness of others
is increasingly important in the new economy becauseM, 1999).

9. Demystifying the Role of Culture in Innovative Regional Economies 1205
unanticipated contingencies, associated with technical Self-sufficiency and autonomy versus outsourcing and exploita-
change or demand shifts, provide opportunities for firms tion of other firms’ competences
to interpret contract terms in ways that shift the distribu-
Successful innovation, therefore, requires that firms
tion of returns to the favour of one side (L, 1992,
maintain close networks of association and go beyond
p. 199). However, there is a pervasive assumption in the
their external boundaries (e.g. C and M,literature that trust is something that emerges over time,
1998; L and L, 1999). Additionally,based on one’s judgement of others’ behaviour in
interfirm collaboration is an important means ofrepeated encounters (e.g. H, 1992; S,
broadening firms’ capacities more widely – allowing1992; L and L, 1997). In contrast, the
firms to reduce and share the uncertainty and costs ofMormon software firms in the present study have a pro-
R&D, and to exploit each other’s core competences,pensity to trust each other in the absence of repeated
needs further enhanced by the increased complexityinteraction. This ‘cultural trust’9
is rooted, it is argued,
and intersectoral nature of new technologies and byin a common history, belief in the same God and a
shortening product life cycles. Cooperative relationscommon cultural heritage. The results also suggest that
also help firms to monitor changes in their regulatoryteaching and organizational roles within the LDS
and technological environments, sense new opportuni-Church (‘callings’), which traditionally connote status
ties, improve product quality and performance, andand good standing within the general Mormon com-
move more quickly into new markets (F,munity (M, 2001; S, 2001), are also often
1997; H-H, 2000).invoked as evidence of a person’s good character in
In contrast, Mormon culture is also characterized byUtah’s computer software industry. Indeed, these often
strong emphases on individual self-sufficiency, indepen-form the basis for explicit decisions within the firm:
dence and self-reliance (L, 1992), ethics which
There’s certainly that thing where you’ll run across another
the results suggest are also being imported into thecompany and the founder is Mormon as well, and you
workings of local software firms, impacting on theirkinda think let’s pay this guy a little more attention,
overall levels of interaction with other firms. Thesebecause there’s that greater sense of he is what he says he
social ideals are rooted in the Mormon pioneer experi-is. There’s an equal understanding of various issues of
integrity and work ethic. ence. Uprooted from the Mid-West, the Mormons
(CEO and founder, active Mormon male) founded Salt Lake City to provide them with a high
degree of isolation from wider US society by whichOnly when firms trust each other are they likely to
they had been persecuted (A and A,share ideas, models, data, and material of a very scientific
1984). Utah’s hostile physical environment also forcedand/or commercial value (Z and D, 1996).
Mormon families to hone the virtue of self-sufficiencyHigher levels of trust among actors within industrial
in order to survive (Y, 1996).clusters are, therefore, argued to underpin higher levels
The results suggest that firms’ import of the Mormonof technological dynamism (L, 1992). However,
individual self-sufficiency ethic is manifest in terms ofit is argued that whilst this cultural trust helps sustain
their overall levels of strategic partnering. The non-interaction between like firms, it simultaneously func-
Mormon-founded and -managed firms in the surveytions to exclude firms that do not share the same
have, on average, around twice as many strategic partnercultural markers. This is consistent with the experiences
of many of the non-Mormon industry respondents: firms as their Mormon counterparts in each firm size
category.10
These patterns are repeated when MormonThere’s certainly an old boys’ network in Utah tech, and
majority workforces are added into the analysis: thewhile I don’t want to say right out that it’s very Mormon,
non-Mormon and Mormon intermediate firms in theit’s certainly got a lot of Mormons in it! So if you’re
coming in from the outside like me then you really have case study sample have an average of just over seven
to prove yourself based on merit. But they will include total strategic partner firms compared with just under
you a lot more readily if you are a member [of the LDS four for their Mormon counterparts. Thus, while
Church], especially if you’re the son of a bishop or Mormon firms have a higher propensity to interact
something.
with other Mormon firms (see above), their overall(Vice-President of Engineering and co-founder,
levels of interfirm networking are reduced relative tonon-Mormon male)
their non-Mormon counterparts. The in-depth inter-
One can, therefore, interpret Mormon–Mormon net- views allowed the author to access the rationales driving
work links and cultural trust between similarly Mormon these strategies:
founded and managed firms as key ‘contents’ of their
cultural embedding in the region. They also have direct We run into this ‘Pioneer Spirit’ all the time . . . this
implications for firms’ abilities to access new sources of feeling of well we’ve got it covered, we can do it ourselves.
information and hence innovate. While they enhance And so there’s a lesser willingness to bring in outsiders, to
Mormon firms’ abilities to interact with like firms, they farm it out. It’s an approach to business that is very
simultaneously limit their abilities to interact with, and reflective of the historic reality.
(Vice-President and co-founder, Mormon female)hence learn from, non-like firms.

10. 1206 Al James
The respondents outlined a whole range of mani- collateral to support bank lending on the scale required.
Venture capital thus refers to the provision by specializedfestations of their import of Mormon ethics of self-
sufficiency and self-reliance: financial companies or by individuals (‘business angels’)
of, usually, equity capital11
for new and existing enter-
That insularity is very much reflected in Mormon business
prises, which are unable to finance growth from inter-approaches; there’s a real tendency to keep everything in-
nally generated sources of finance and debt finance, andhouse. So we’ve never looked out of the window, we’ve
are too small or unwilling to access public equitynever even looked at our competitors’ products, at any-
markets (M and H, 1999). In turn, thebody else’s ideas.
existence of well-developed venture capital networks(Director of Corporate Research, active Mormon
(convert) male) has been shown to accelerate the pace of technological
innovation and regional economic developmentWe put our own cafeteria in our office and we staffed that
(F and S, 1990; Z, 1999).ourselves, but that’s almost unheard of outside the state.
However, whilst analyses typically adopt a supply-Plus we’ve hired our own janitor crews rather than
side focus in terms of the availability of venture capitaloutsource it, and we’re not abnormal in doing that here!
to firms in the region, the results suggest that oneEven me, if I’ve got a project to do, I’m less likely to go
also needs to recast the argument to include firms’hire a consultant to do it, I’ll just do it myself.
(Director of Human Resources, active Mormon male) willingness to seek external finance in the first place.
Specifically, many of Utah’s lead software firms actively
While many respondents were proud of their firms’ self-
import Mormon cultural attitudes of debt avoidance,
sufficiency and having grown something from nothing,
along with the general Mormon attitudes towards self-
many firms were also aware of the limits of such an
sufficiency as outlined above. Mormons are taught from
insular approach:
childhood to live within their own means, to be frugal
I’ve seen a lot of Utah companies really hurt themselves and to strive for economic independence (L,
because they’ve said ‘Oh I don’t need an attorney’, or ‘I 1992). Imported into the firm, these cultural traits
don’t need an accountant, I can structure this loan or impact on Mormon firms’ willingness to seek external
investment myself ’. And that makes it difficult for the finance relative to non-Mormon firms, and hence on
business to grow and to be successful.
their use of venture capital. The survey focused on
(Chief Financial Officer, active Mormon male)
firms’ early stage financing strategies, in terms of
In the first incarnation [of the company] it was very much seed financing, R&D financing, start-up funding and
that way to a fault. Whenever we needed to mass-produce early-growth financing. While on average 57% of the
rather than outsourcing it we went out and bought Mormon founded and managed firms12
were internally
our own duplicator. And then when it came to shrink financed at start-up, this compares with 43% of their
wrapping, do we farm that out? – No, we go buy a shrink non-Mormon counterparts. Internal funding strategies
wrapper and we do that ourselves! So we outsourced
include using the personal funds of the founders, the
nothing and got so bogged down that we kinda delayed
profits from the previous firms of the founders, inter-getting to our overall goals.
nally generated contract money and bootstrapping.13
(President and founder, active Mormon male)
Further, where firms have sought early-stage external
Various studies have also demonstrated the dangers of financing, the non-Mormon firms are 1.6 times more
self-sufficiency more generally. Rarely does a single likely to have institutional venture capital as their
firm have superior capabilities in all phases of the dominant mode of early stage external finance than
production process, and so where firms rely mainly their Mormon counterparts (44 compared with 27%).
on internal resources, their individual performance is The in-depth interviews allowed the author to access
weakened, along with that of the entire regional system the strategies driving these patterns. While 86% of the
(M 1992; W and W, 1997). As Mormon firms in the case study sample have never
such, one can view the introvertedness of particular sought external financing, this compares with 57% of
Mormon firms as a key content of their cultural their intermediate Mormon counterparts, and only 33%
embedding in the region that potentially constrains of their non-Mormon counterparts. Further, two-thirds
their innovative capacities by limiting their access to of the firms in the case study sample that have imple-
external sources of information and expertise. mented internal financing strategies since start-up
admitted that such strategies were driven by a desire to
make a moral decision in line with the founders’
Debt avoidance and frugality versus venture capital as enhanc-
personal values, but which were not necessarily in
ing innovation
the best (profit-maximizing) interests of the company.
Significantly, this figure includes two-thirds of theFor companies seeking to exploit significant growth
opportunities, the financial requirements of the business Mormon (founded and managed) firms, yet none of
their non-Mormon or intermediate Mormon counter-may rapidly exceed their capabilities of generating funds
internally (B and E, 1996). Yet at the start- parts. The respondents were particularly concerned
about issues of losing control of the firm to outsideup stage, firms have neither the track record nor the

11. Demystifying the Role of Culture in Innovative Regional Economies 1207
investors. In return for their investment, venture capi- One can, therefore, interpret Mormon firms’ prefer-
ences for internal finance strategies, their aversion totalists become partial owners in the firm and demand
representation on the firm’s board of directors, with venture capital and their justification in terms of a
recourse to religious or doctrinal teachings as keythe primary aim of dramatically multiplying the value
of their investment to distribute to their limited partners. ‘contents’ of firms’ cultural embedding within the
region, contents which have key implications for firms’Indeed, venture capitalists tend to hold a majority of
voting rights, even if they only control a minority of abilities to compete.
the cash flow rights.14
Many of the respondents outlined
associated issues of control:
Family (and church) above all/balance versus sleeping bags
The problem with venture capital is that your culture has under the desk
to change. You’re legally obligated to do whatever’s in the
In a classic study, S (1994) highlights howbest interest of the shareholder, and so you lose the ability
Silicon Valley’s engineers, often young men withoutto say ‘I understand that this is not the best decision for
the company, but this is the best decision in terms of my wives or families, instead developed shared identities
morals’. And so there is a great deal of resistance to around the project of advancing new technologies.
external finance because of the uncertainty of the morality Their lack of local family ties facilitated an increased
of external business influences. commitment to the firm, a regularity of long unsocial
(Director of Technology and co-founder, active work hours and the completion of large workloads in
Mormon male)
short periods of calendar time, particularly when
bringing a new product to market. This key facet ofThe author typically encountered pride among the
Silicon Valley’s industrial culture is a key base ofrespondents at having grown their company alone, with
the region’s technological dynamism. In contrast, thea lack of debt and greater autonomy seen as advantages.
Mormon regional culture centred on Utah’s WasatchHowever, these culturally informed financial strategies
Front is characterized by a rigid separation of work andalso place constraints on firms’ abilities to innovate.
social life, premised on strong cultural commitments toVenture capitalists have a role that goes beyond the
family and church. This key facet of the regional culturefinancial, becoming heavily involved in the myriad tasks
is being imported into local computer software firms,attached to new business formation and development
impacting upon their work patterns and their abilitiesover the business cycle, both to minimize downside
to compete.risk and to add value to their investments (B
The concept of family lies at the heart of Mormonismand T, 1992; F and H, 1994).
(M, 2001). Consistent with cultural emphases on theThus, culturally driven strategies of debt avoidance
primacy of marriage, procreation and traditional familyalso limit firms’ access to the wider benefits that venture
values, Mormons are characterized by higher rates ofcapitalists bring. Broader studies of technology-based
marriage, lower rates of divorce, higher fertility ratesfirms have also highlighted a strong link between
and larger families than the US national average.business success and the amount of financing firms
Mormonism teaches that children are of far greaterinitially receive (R, 1991).15
While some
value than any material wealth, with various sociologicalfirms have grown to a significant size without raising
studies also demonstrating that these Mormon commit-external finance at some stage (B, 1992;
ments to family life detract from devoting large amountsB, 1997), they are nevertheless exceptions
of time to careers (H, 2001). The author’s results(M and H, 1999). Indeed, firms were
are consistent with these findings, at both the level ofthemselves often aware of the limits of their self-
the individual and the firm, across four key ‘contents’,sufficient financial strategies:
as outlined below:
We have been very hesitant to lose control of the company
Ω Work week lengths: the Mormon (founded andby taking outside investment so we never have. But, we
managed) firms in the case study sample have averagealways battle over that topic, because there’s so much we
work weeks that are 5.8 h (approximately 10%) lessfeel we could do, and grow faster with an infusion of cash,
than those of their non-Mormon counterparts (44.7but so far we’ve not even pursued it.
(CEO and founder, active Mormon male) versus 50.5 h/week).16
While the pattern is not
monolithic, overall there is patterning across these
I’ve seen [the company] flounder financially for years but firms, a function it is argued of their import of
still we’ve never chosen to seek external money. And it’s
Mormon cultural emphases on the primacy of
been a real white-knuckle ride of a company to work for
family.17
because we’ve almost lost the company probably ten times
Ω Prevalence of abnormal work hours: abnormal workin the last 5 years! We would have been a lot more
hours are defined here in terms of working beyondsuccessful a long time ago if we’d been willing to give
19.00 hours, working through the night, workingmore away.
weekends and/or working overtime.18
While abnor-(Director of Corporate Research, active Mormon
(convert) male) mal work hours are a regular occurrence in 67% of

12. 1208 Al James
the non-Mormon founded and managed firms and 55%) longer in the Mormon firms than in the non-
Mormon firms (17.5 compared with 11.25 days).in 62% of the Mormon intermediate firms in any
particular month, this compares with in only 42% of This also compares with the 15.3 days/year for the
Mormon intermediate firms. Removing the start-their Mormon counterparts. Indeed, in the majority
of Mormon managed firms this is a deliberate ups from the analysis has a negligible effect on the
data (18.5 compared with 11.5 days). Further, whilestrategy:
holiday lengths are typically closer to the European
Family and church are very high priorities for us, so we average of 4 weeks in the Mormon firms, in the
try not to have our employees working a lot of extra non-Mormon firms they are closer to the US
hours, and we try to reduce that as much as we can in
average.20
order for them to participate in religious activities and
family activities which we see as a very important part Overall, respondents highlighted a number of perceived
of our culture. advantages of these four key contents of firms’ cultural
(Director of Business Development, active Mormon embedding, the most commonly cited advantages cent-
male)
ring on a more healthy, less stressed and consistently
productive workforce. However, the respondents wereAgain, while the pattern is not monolithic, overall
also aware of the constraints of these culturally informedthere is clear patterning, a function it is argued of
work patterns:the embedding of these firms in Mormon culture.19
Ω Sunday working: the most frequently cited area of There very definitely is a strong sense in the Mormon
abnormal work hours involved Sunday working, Church that your job and your success are not the most
a major tension for Mormons working in Utah’s important thing in your life. So I wonder if we’re as
effective at competing, precisely because we can’t, and wecomputer software industry. The Sabbath has been
won’t, throw everything we’ve got into the company. Sohistorically set apart in Mormon culture as a holy
you’ve got firms elsewhere working 80-, 90-, 100-hourday of worship, for rest and spiritual renewal. Thus,
work weeks, often putting in twice as many hours as wewhile two-thirds of the Mormon (founded and
did in the same week!
managed) firms in the case study sample have com-
(Director of Technology and co-founder, active
pany policies that restrict Sunday working, none Mormon male)
of their non-Mormon or intermediate Mormon
We continually battle the problem of our managers fromcounterparts maintain such policies. This is signifi-
other US locations feeling like the workforce in Utahcant given the 15-month development schedules
aren’t as committed. And that is reflected in lower levelscommon among the firms in the case study sample.
of new product introduction in the Utah office. If weTypically, in the final stages of a software project,
have a big product release scheduled, your Utah employeesweekend working and late evenings are the norm in
are more likely to say well we’ll just have to push it back.
the non-Mormon firms:
Whereas in some of our other office locations, there’s
more of a willingness to spend 24 hours a day at workThe last two or three months of a project, you’re
until it’s done.working 80 hours weeks, and those last few weeks get
(Director of Human Resources, active Mormon female)insane! On my last project, in the last month I slept in
my own bed twice! We got sofabeds in the basement Indeed, these self-perceived constraints are supported
and so you’d just go down there and grab a few hours
by wider secondary analyses at the US national level.
and carry on – insane!
Notably, a report by the US N C (Chief Financial Officer, non-Mormon male)
 E Q   W
(EQW) (1995)21
investigated the relationship betweenThese attitudes to Sunday working contrast with
firms’ work hours and their overall productivity, esti-those that characterize the corporate cultures of the
mating that for a 10% increase in work hours in non-majority of the Mormon firms in the case study
manufacturing firms, there was a 6.3% increase insample:
establishment productivity.22
Significantly, the author’s
Even when we’ve had 24 hour-a-day 6 days-a-week own results suggest that the non-Mormon firms work
operations, we always close Sunday! I’ve just always 16% longer work weeks than their Mormon counter-
tried to maintain that. We don’t want work replacing parts (43 versus 50 h/week), and as such their cultural
family structure or religious structure. Work is supple- embedding in the region potentially impacts negatively
mentary and there to support family and church.
on their innovative capacities.
(Director of Marketing, active Mormon male)
Ω Average length of paid vacation: the holiday lengths
Family (then church) above all versus afterwork socializing
calculated here are for software engineers below the
and informal information diffusion
vice-president level who have been with a firm for
3 years. The results show that average lengths of Innovation in the region crucially involves interaction
and the exchange of expertise. Scholars have focusedpaid vacation are on average 6 days (approximately

13. Demystifying the Role of Culture in Innovative Regional Economies 1209
on the key role of tacit knowledge23
embodied in Whilst over half of the non-Mormon industry respond-
ents had socialized after work with a colleague in thepeople rather than in written form, and the role of
previous 2 weeks, less than one-fifth of the activeinformal social networks as conduits of information
Mormon respondents had done so.diffusion within the region (e.g. G, 2003).
Second, over half of the firms in the case study firmIndeed, P (1990) argues that social networks
sample outlined Mormon cultural restrictions on theare the most efficient organizational arrangement for
type of corporate social event that they can hold as asourcing information, given that information is difficult
firm, a figure that includes all of the Mormon foundedto price in a market and difficult to communicate
and managed firms, and almost half of the Mormonthrough a hierarchy. Often premised on a porous
intermediate firms. Respondents instead outlined adivision between work, social and leisure activities,
range of ‘pub substitute’ corporate social events, includ-employees frequently meet at trade shows, industry
ing afternoons of golf, basketball games, a big lunchconferences, seminars, talks and other social activities
culture, picnics, barbecues and other participatoryorganized by local business organizations, as well as in
sporting undertaken as a firm:more informal venues such as bars, clubs, pubs, Internet
cafes and coffee shops (S, 1994). In these
When there are corporate events, it’s always ‘family day’social contexts, personal contacts provide access to a
with good wholesome food and never a can of beer to bediversity of wider ideas and bases for comparison, and
seen. Back in LA, those business events looked like a bus
so underpin more formal corporate interactions by
to the rehab center or something! – letting your hair
providing further opportunities for new and unexpected down was a big part of the business culture. But that just
ideas or synergies (C, 1999; L and never happens here, and it’s very visible to our managers.
L, 1999). (Director of Corporate Research, active Mormon
Although Mormon culture is also permeated by (convert) male)
extensive informal social networks, these tend to be in
very different areas than those highlighted in the Typically, the respondents were also very aware of the
disadvantages of these cultural influences upon the firm,regional learning and innovation literature. Signifi-
especially the single non-Mormon respondents, manycantly, Mormonism is characterized by long-standing
of whom had come to Utah from elsewhere in theties to family, church and community, and a rigid
USA:separation between work life and social life. For a
devout Mormon family, church activities dominate the
But there is a part of business that’s conducted offsite inweek (M, 2001). Except for a relatively small number
social situations. Here they’ve taken the drinks after workof top leaders, the LDS Church is managed by a lay
and they’ve stuffed it into these other categories. And theclergy and Mormons are called to contribute in various
problem is, if you try to do business with people outside
specific capacities, such as administrative, teaching or
of Utah who don’t do it with a basketball game or golf,
service-orientated positions. In an average Ward of 625 there’s some kind of disconnect which makes it hard.
persons, there are approximately 280 regular church (Chief Financial Officer, active Mormon male)
offices and teaching positions to be filled, and each
church member has around 90–100 persons involved in Company policy actually prohibits employees from
providing their church activities each week (V, drinking alcohol whilst on any kind of business event, and
it causes real problems because a lot of times you’ll meet1980, p. 164).
with journalists or whatever who want to go for a drink.The present results suggest that there are three key
And it’s just inappropriate to then say you’re not drinkingareas in which firms’ embedding in this Mormon
because it’s company policy! So you really lose out onregional culture impacts upon their innovative capaci-
that personal aspect of business where you go crazy to
ties. First, there exist cultural constraints on amounts
show that outside of work we’re still cool people.
of after-work socializing in which firms’ employees can (Director of Research, active Mormon (convert) male)
engage. Over 80% of the 27 respondents in the sample
with experience of working in the US computer The fifth key ‘content’ of firms’ cultural embedding
software industry outside Utah suggested that levels of within the region, therefore, centres on their import of
after-hours socializing with work colleagues are far less Mormon cultural emphases on the primacy of family
frequent in Utah: and church; cultural priorities that impact on both
the amounts of after-work socializing that Mormons
working in Utah’s computer software industry might
In Utah, when they’ve finished work they go home. Not
undertake; and the type of corporate social events thatlike other places I’ve worked where every Friday at 4
firms can hold. These key contents potentially limito’clock everyone will pull down to the pub and sit round
firms’ abilities to innovate, in terms of limiting theirdrinking and bullshit and tell stories and whatever else.
access to informal networks of business informationBut here in Utah that just doesn’t happen.
sharing, sources of information which would otherwise(Vice-President of Engineering and co-founder,
non-Mormon male) supplement more formal types of corporate interaction.

14. 1210 Al James
LINKING CULTURAL EMBEDDING IN While the causal mechanisms through which regional
THE REGION TO FIRMS’ cultures come to inform the behaviour of local firms
COMPETITIVENESS deserve a paper in their own right, the present paper
outlines briefly the main mechanisms. The first centres
The results suggest, therefore, that the cultural em-
on firms’ founders and management teams who existbedding of computer software firms on the Wasatch
simultaneously as members of the firm and of theFront is best understood in terms of various Mormon
regional culture. Because what the firm understandscultural conventions, norms, values and beliefs being
itself to be is produced through the actions of its leadimported into local firms, and informing their internal
employees, the identities and commitments of these keystructures, decision-making processes and, hence,
individuals become closely entwined with (although notobserved behaviour. While in some cases these imports
identical to) corporate identities and commitmentsof Mormon cultural traits potentially enhance firms’
(S, 1997), in turn informing firms’innovative capacities, in other cases they potentially
decision-making processes and observed patterns ofconstrain them. These alignments and clashes are sum-
behaviour through cultural definitions of what has valuemarized in Table 6.
and what does not. Second, however, it is important toFirms’ embedding in the Mormon regional culture,
conceptualize culture as a group property. As such, thetherefore, has key potential implications for their abili-
ratification of regionally culturally informed decisionsties to innovate, specifically in terms of influencing
by the wider work group forms a second key mecha-their abilities to access wider sources of information,
nism of cultural embedding. Overall, it is not beingexpertise and finance. While each of these key contents
argued that regional culture mechanically or rigidlyof firms’ embedding in the Mormon regional culture
determines worker and firm behaviour; rather, that itis not particularly significant by itself, there is patterning
structures the material and cultural resources that enableat three levels. First, patterning is apparent within firms
and constrain the action of individuals and the firms inacross the different cultural traits outlined in Table 6,
which they work.which are mutually reinforcing within particular firms.
Additionally, however, as L (2003) and GSecond, this patterning at the level of the firm is
(2004) make clear, it is also crucial that one also groundsconsistent with (i.e. mirrors and embodies) regional
analyses of regional culture in concrete institutions atcultural traits. Third, this patterning is consistent across
the national scale, which also regulate firms’ governancedifferent firms’ corporate cultures, sustaining, a regional
industrial culture. practices. With regard to the Utah case, two key pieces
Table 6. Self-identified Mormon cultural traits versus high-tech cultural traits known to promote innovation in the firm:
alignments and clashes
Regional Mormon culture (self-identified) Regional industrial/corporate culture (promoting success)
Unity and mutual trust: Interfirm networks and studied trust:
Reciprocity and Mormon pioneer heritage Increased channels of information exchange
Feelings of intense mutual obligation Information recombined in new ways in new firms
Collective unity over the individual Multiple evaluations of own knowledge
Unity as a Christian virtue Exploit overlapping technical knowledge
Self-sufficiency and autonomy: Exploiting others’ competences:
Self-sufficiency a virtue Shared resources/expertise/costs/risks
Persecution complex and isolationism Firms gain new competences
Zion to rise independent of Gentile nations Reduced time to market products
Control over own destiny Group problem-solving: unexpected synergies
Debt avoidance: Venture capital sought:
Frugality Venture capital as capitalist and catalyst
Live within one’s means Venture capital networks accelerate innovation and growth
Self-sufficiency Gatekeepers to wider information/expertise networks
Money as means to a higher spiritual end Social structure of innovation
Family (then church) above all: I: Sleeping bags under the desk:
Family as a fundamental unit of society Large workloads in short periods of calendar time
Eternal nature of family relations Long work hours a medal of honour
Strict separation of work and social life Abnormal work hours
Children of greater value, compared with material wealth
II: Afterwork socializing:Need for a balanced lifestyle
Blurring of work and social identitiesExtensive lay system of organization
Informal information networksLittle social contact outside one’s own ward
Diffusion of embodied (tacit) knowledgeStrong ties to family, church, community
Reinforces more formal corporate interaction

15. Demystifying the Role of Culture in Innovative Regional Economies 1211
of national legislation further reinforce the characteristic Mormon counterparts three times over. Again, while
there is little difference for the medium size firms inindustrial culture visible in Utah’s high-tech cluster.
First, the US Workplace Religious Freedom Act (1972) the survey sample, looking at the effect of a Mormon
majority workforce (case study sample) the non-(which amended Title VII of the US Civil Rights
Act (1964)) requires employers to make reasonable Mormon firms have growth rates three times greater
than their Mormon counterparts.accommodation for the religious beliefs of employees
and prospective employees. This is reinforced by the Third, in terms of Type I R&D intensities, the non-
Mormon firms in the medium size category are overUS Religious Freedom Restoration Act (1997), which
further increases employers’ responsibilities to accom- twice as R&D intensive as their Mormon counterparts.
This is not a function of the differences in the agemodate workers’ religious beliefs within the workplace.
distributions of Mormon versus non-Mormon firms as
these are very similar.26
When the effect of a Mormon
MEASURING THE MATERIAL majority workforce is isolated (case study sample), these
IMPACT OF CULTURAL EMBEDDING patterns are repeated. Again, this is not likely to be a
ON THE FIRM function of the different age distributions of these two
types of firm, as these are almost identical.27
The onlyTo gauge the overall material impact of these various
exception to the rule is the micro size category, where‘contents’ of cultural embedding on firms’ abilities to
the Mormon and non-Mormon firms have almostinnovate and hence compete, four key metrics have
identical R&D intensities.been employed:24
(1) revenue growth since start-up
In terms of the fourth metric, the results are mixed.(linear and exponential); (2) R&D intensity Type I
While in the medium size category the Mormon firms(ratio of R&D expenditure to annual revenue);
have Type II R&D intensities, two-thirds those of their(3) R&D intensity Type II (ratio of R&D employment
Mormon counterparts, in the other size categories theto total employment); and (4) productivity in terms of
Mormon and non-Mormon firms perform the same.revenue per employee. The results are shown in Table 7.
Focusing on the effect of a Mormon majority workforceFirst, assuming linear rates of growth, the non-
through the case study sample actually reverses theMormon firms in the micro size category have revenue
survey pattern in the medium size category, with thegrowth rates around twice those of their Mormon
non-Mormon firms in the case study sample averagingcounterparts. This is not a function of differing age
only half the Type II R&D intensities of their Mormondistributions of Mormon versus non-Mormon firms,
counterparts.as these are almost identical.25
While there is little
Using the final metric (productivity), the results aredifference for the medium size firms in the survey
again mixed. In the micro size category, the Mormonsample, focusing on the effect of a Mormon majority
firms have productivity levels less than half those ofworkforce (case study sample), the non-Mormon firms
their non-Mormon counterparts. However, this patternagain outperform their Mormon counterparts four
is reversed for firms in the medium size category.times over.
However, isolating the effect of a Mormon majoritySecond, assuming exponential growth rates, these
workforce (case study sample) actually reverses thedominant patterns are repeated, with non-Mormon
firms in the micro size category outperforming their survey level pattern in the medium firm size category,
Table 7. Measuring the impact of cultural embedding on the firm
Survey sample (105 firms) Case study sample
(20 firms of 20–99
Micro (1–19 employees) Medium (20–99 employees) employees)
Non- Non- Non-
Metric of firm competitiveness Mormon Mormon Mormon Mormon Mormon Mormon
(1) Revenue growth since start-up:
(a) Linear (2000 UT revenue/age) 0.16 0.32 0.78 1.05 0.18 0.73
(b) Exponential (2000 UT revenue/Yage) 0.28 1.05 1.70 1.68 0.56 1.57
(2) R&D intensity type I (R&D expend: sales 0.23 0.24 0.22 0.53 0.29 0.59
revenue)
(3) R&D intensity type II (R&D employee: total 0.55 0.57 0.40 0.58 0.57 0.34
employees)
(4) Productivity (US$1000 revenue/employee) 60.47 155.71 123.69 88.82 88.74 103.83
Definition of Mormon versus non-Mormon firms Founding and management only Founding, management and
majority workforce

16. 1212 Al James
and the non-Mormon firms again outperform their this ongoing research centres on the high-tech cluster
policies with which governments across the globe haveMormon counterparts. What these results in fact high-
light is the need to conceptualize culture primarily as a become fixated over the last two decades as an important
tool for stimulating regional economic growth (Sgroup property. As such, what counts in terms of
cultural values limiting firm behaviour is not only et al., 1998; OECD, 1999; N, 2001). While
many governments have attempted to mimic the experi-whether firms’ decision-makers (founders and man-
agers) embody those values (as examined in the survey ence of Silicon Valley et al. through the provision
of venture capital, additional spending for education,sample), but also whether those values are simulta-
neously ratified by the wider workforce as a valid basis incubator space, prestigious addresses in local university-
based science parks and technical assistance, it hasfor action (as examined in the case study sample).28
Overall, therefore, the data in Table 7 show that for become increasingly apparent that cluster policies do
not travel well, and that innovative regional economiesfour of the five metrics of firms’ economic performance,
the import of Mormon cultural traits by Mormon cannot simply be ‘cloned’ (F and K,
1990; L, 1992; M and O, 1999;founded and managed computer software firms on
the Wasatch Front has a constraining effect on their M, 1999; S, 2000). The present results
highlight two key ways in which regional culturaleconomic performance (see the emboldened text).
However, this is not to suggest that the impacts are all context imposes spatial limits upon the effectiveness of
high-tech cluster policy.one way. As outlined above, there is a series of Mormon
regional cultural traits imported into these firms, which First, the dominant tendency within cluster policies
is to install the ‘right’ mix of institutional componentsin some cases constrain innovation but in other cases
promote it. A multiple method approach was, therefore, deemed necessary for an innovative regional economy.
In contrast, the present results suggest that the physicalcrucial, to gain a more nuanced understanding of this
subtle balance of impacts of embedding which would proximity of firms and other regional institutions, the
first usual indicator of a cluster, does not necessarilyotherwise have been masked by a simple broad survey
analysis. guarantee or automatically generate the cooperative
interactions widely theorized to underpin information
and knowledge spillovers within the region. Specifically,
CONCLUSION
the uneven networks of association documented in the
Utah case, in which non-like firms are excluded inWhile there is growing consensus that culture plays an
important role in shaping the conditions conducive to favour of interactions with firms and workers of a similar
(e.g. Mormon) cultural background, demonstrate thatinnovation, the precise impact of regional culture on
the competitive performance of firms in innovative physical proximity is less important than cultural or
‘relational’ proximity, defined by shared cultural con-regional economies has yet to be fully specified, let alone
measured. This paper, therefore, has begun to move ventions, norms, attitudes, values and beliefs (also A
and C, 2000). This is a useful illustration ofbeyond this impasse by drawing on the case study of
Utah’s high-tech cluster, embedded in a distinctive and the more general way in which whilst tackling the
supply-side within cluster policy is certainly necessarymeasurable culture: Mormonism. First, it outlined how
not only are regional cultural collective understandings, to foster growth and development, it is unlikely of itself
to be sufficient (K et al., 2004, p. 996).rules, norms, procedures, customs and conventions
mirrored within local firms’ corporate cultures, but also Closely related to the first point, a second common
approach within cluster policy is simply to exhort firmsthat they have concrete, visible and measurable impacts
on firms’ decision-making processes, corporate ideolo- within different national jurisdictions to modify their
own behaviour (G, 1997, p. 56), so that, forgies, systems of organizational control, and observed
patterns of behaviour. Second, it was shown how the example, interfirm cooperation, external financing or
new ways of working become more commonplace.impact of this cultural embedding on the competitive
performances of firms is best understood in terms of a However, such policy proscriptions fail to recognize
that new behaviour patterns crucially require a shift inseries of sustained tensions between various regional
cultural traits, versus key elements of corporate and corporate cultures, such that firms and their members
bend, or indeed break out of, accepted ways of thinkingindustrial cultures that have consistently been shown in
the regional learning literature as central to firms’ and acting to develop new frames of understanding
(H, 1994). To compound matters, whereabilities to innovate. Importantly, both enablers and
constraints on firms’ innovative capacities stem from firms’ corporate cultures are shaped and conditioned by
a strong regional culture in which they are embedded, asthe same regional culture in which they are embedded.
Third, it has begun to unpack how one might measure illustrated herein with regard to Utah’s high-tech
cluster, to what extent is it possible to realign (orthe overall impact of firms’ cultural embedding in the
region using a series of empirical measures of economic disembed) those corporate cultures and hence modify
firms’ behaviour patterns in line with policy proscrip-competitiveness.
The wider relevance of, and motivating context for, tions? Second, through what policy levers might that

17. Demystifying the Role of Culture in Innovative Regional Economies 1213
5. Indeed, this was often proudly displayed in the executivechange be effected? Third, over what time scales is such
biographies on company websites, and Brigham Youngchange feasible. And fourth (following L, 2003; and
University (BYU) alumni status was a convenient surrog-G, 2004), how does that vary across national
ate measure – over 99% of BYU students are activeeconomies, given the different mosaics of regional
members of the LDS Church and a BYU education has
cultures embedded within each? These are important
been consistently shown to have a strong positive impact
questions for future regional research within the upon LDS commitment in later life.
cultural–economic vein. As long as culture remains 6. Although that figure excludes 17 firms in the survey
inadequately conceptualized, theorized, and empirically sample that kept their revenue data confidential, so in
verified within the regional learning and innovation reality it is larger.
literature, it will continue to be viewed by many as a 7. Firms’ ‘strategic partners’ were defined as those firms
‘dustbin category’, at best brought in as an ad hoc bolt- with which they undertake joint product development,
joint R&D, or other self-identified formal alliances ason to orthodox economic policy analyses; at worst, it
outlined on firms’ corporate websites or by the author’swill be sidelined completely.
industry respondents. These results include strategic
partners both inside and outside Utah.
Acknowledgements – The author is grateful for the com- 8. Trust as ‘a psychological state comprising the intention
ments and encouragement on earlier versions of this paper to accept vulnerability based upon positive expectations
by Mia Gray, Ron Martin, Jane Pollard and two anonymous of the intentions or behaviour (of a partner)’ (HUTT
referees. Research was funded by the Economic and Social et al., 2000, p. 52); the mutual confidence that no party
Research Council (Award R00429934224). to an exchange will exploit the other’s vulnerability
(S, 1992).
9. In a parallel framework, H et al. (1997) describe
NOTES the emergence of ‘swift trust’ in situations where the
individuals have a limited history of working together,1. Mining and agriculture are regarded as historical pillars
and have limited prospects of working together in theof Utah’s economy. However, since the Second World
future. This temporary trust is resilient only, long enoughWar, when several military installations were established,
to survive the group. Cultural trust, it is argued here, isUtah’s defence industry has grown rapidly in importance
qualitatively different, given the prospect of continual(defence spending in Utah in 2002 totalled US$2.47
mutual observance in the church setting.billion). Utah has one of the most diverse economies of
10. Strategic partners in both Utah and beyond. Mormon-the US Mountain states. Its gross state product (the
founded and -managed firms compared with non-market values of final goods and services produced by
Mormon-founded and -managed firms: micro category:labour and property located in the state) in 2001 was
4.1 compared with 7.0; medium category: 3.5 comparedUS$70.409 billion, the most significant industry contri-
with 7.1; medium-large category: 4.9 compared withbutions coming from services (including computer soft-
12.0.ware) (20.6%); finance, insurance and real estate (20.1%);
11. Venture capital involves the exchange of capital for anmanufacturing (14.9%); and government (14.7%). In
ownership stake in the firm (F and S,terms of per capita income, a 2002 figure of US$24 197
1990).puts Utah 46th among the 50 US states. All figures are
12. Equivalent figure for the Mormon intermediate firms:from the U C  E A’
49%.(2003) report to the Utah Governor for 2004.
13. Bootstrapping can be defined as creative ways of acquiring2. Computer software is a set of directions or instructions
the use of resources without borrowing money or raisingthat exist in the form of machine- or human-readable
equity from traditional sources, e.g. working from home;code, which are recorded on physical or electronic
reduced, foregone or delayed salary; advances frommedium and which directs the operation of a computer
customers; and free or subsidised access to machinerysystem or other machinery and/or equipment. Com-
and access to equipment (F et al., 1995, p. 395).puter software includes the associated documentation
14. While angels are similarly equity orientated like theirthat describes the code and/or its use, operation, and
institutional venture capital counterparts (M andmaintenance, and it is typically delivered with the code
H, 1999), as informal investors they have lessto the user. Computer software does not include data-
power to replace or modify the management team.bases but does include the computer programs and code
15. Broader studies confirm the positive impacts of ventureused to generate databases. Computer software can be
capital on the firm. Notably C and Lprepackaged, custom or a mixture of both.
LLP/V’s (1996) analysis of the fastest-3. R&D intensity, in terms of (1) R&D expenditure as a
growing companies in the USA indicates that ventureper cent of total revenue and (2) R&D employment
capital-backed companies increased their revenues byas a per cent of total employment (following G,
37% in 1995 compared with 23% for non-venture2001).
capital-backed companies in the fast growth category,4. Management team definitions for each firm were those
and employed 114 workers in the USA on averagegiven on firms’ own websites. While there existed slight
compared with only 60 in non-venture capital-backedvariations between firms in the types of positions classed
companies.as part of the management team, the overall proportions
16. Equivalent figure for the Mormon intermediate firms isof management teams that were Mormon were typically
invariant to modifications in positions included. 49.1 h/week.

18. 1214 Al James
24. Clearly, these are not exhaustive and the author is keen17. This pattern also remains when start-ups (defined here
as firms less than 3 years old) are excluded from the to expand on them in a future study.
25. Age distribution of survey firms in the micro size categoryanalysis (43 h/week for the Mormon firms compared
with 50 h/week for the non-Mormon firms). (one to 19 employees). Mormon-founded and managed
firms compared with non-Mormon-founded and man-18. These are definitions gleaned over the course of the
author’s industry interviews. aged firms (%): 1–5 years: 50 compared with 50; 6–10
years: 28 compared with 40; 11–15 years: 17 compared19. The pattern remains when start-ups are excluded from
the analysis. with 10; [15 years: 6 compared with 0.
26. Age distribution of survey firms in the medium size20. US average: 11.7 days annual paid vacation for profes-
sional, technical and related employees after 3 years of category (20–99 employees). Mormon-founded and
managed firms compared with non-Mormon-foundedservice with the company (US D 
L, 1996). and managed firms (%): 1–5 years: 54 compared with
58; 6–10 years: 18 compared with 33; 11–15 years:21. It examined over 300 establishments that employ over
20 staff. 18 compared with 8; [15 years: 11 compared with 0.
27. Age distribution of firms in the case study sample22. Measured in terms of output, whilst also controlling
for materials used, employee hours, age of equipment, (all 20–99 employees). Mormon-founded and managed
firms compared with non-Mormon-founded and man-industry, size and employee turnover.
23. Notions of tacit knowledge draw on the work of Michael aged firms (%): 1–5 years: 33 compared with 50; 6–10
years: 50 compared with 33; 11–15 years: 17 comparedPolanyi, who distinguished it from explicit knowledge
(the latter was abstract, communicable and conveyed by with 17; [15 years: 0 compared with 0.
28 Again, for a fuller explication of this key mechanism ofsymbols and language; the former was incommunicable
and embedded in practice) – that ‘we know more than firms’ cultural embedding in the region, see J
(2005).we can tell’ (P, 1967, p. 4). However, the
distinction between ‘tacit’ and ‘explicit’ knowledge is
not fixed.
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