178 S. Bailey
Miller and C6te (1985) state that despite these legitimate roles for govern-
ment and universities, most government laboratories and universities are
poor incubators of entrepreneurs and high-tech products. Usually, neither
their researchers nor their laboratories have any significant contact with
the marketplace. A potential entrepreneur working in such an institution
is not exposed to the market, its needs, its organization or its people. Prod-
uct ideas generated in government laboratories and universities seldom
meet marketplace standards either technologically or in terms of cost.
They go on to state that the ideal research environment to support a high-
tech cluster has the following characteristics:

 The region has several research institutions, like research oriented uni-
 versities and laboratories, which are recognized as leaders in their
 fields and boast a significant reputation to attract "the best and the
 brightest:'
 A tradition of contract research exists in these institutions.
 A few large corporations have set up advanced laboratories in the
 regions where they conduct their basic and generic research.
 A tradition of close relationships between those research institutions
 and local high-tech companies has taken root through consulting con-
 tracts, hiring of graduate students, and occasional joint venturing.

 In summary, the pursuit of government grants, university research con-
tracts, and other forms of similar creative financing have allowed biotech-
nology companies to pursue their development plans. Much of this financ-
ing is necessary when more traditional avenues of funding are unavailable
to new firms.


 TRADITIONAL REQUIREMENTS FOR A
 SUCCESSFUL INVESTMENT

 While the financing vehicles may be changing, the reasons behind the
decision to invest or not remain largely the same as they have for many
years. These reasons are categorized in three general types: external envi-
ronment-"The Market," company specific issues-"The Opportunity,"
and management-"The key" (financing, previously discussed, being the
fourth).