Part 1: Why America Wins in the World of Bits In The Diff, Byrne Hobart makes the following point: Startup clusters don’t just happen in software: in Japan, there’s a growing number of [startups] in the materials and chemicals industries. Part of what creates a startup cluster is when there’s a big customer, or category of customers, that can be accessed by smaller ones. Silicon valley started out with a heavy defense slant, but eventually got plugged into the consumer economy. In Japan, the high value-added industrial export sector is relatively larger, so it’s a better category for new companies to sell into.