A business cluster is a geographic concentration of interconnected businesses, suppliers, & associated institutions in a particular field. Clusters are considered to include the productivity with which institution can compete, nationally as well as globally. Accounting is a factor of the business cluster. In urban studies, the term agglomeration is used. Clusters are also important aspects of strategic management.
In the mid- to slow 1990s several successful data processor engineering related companies emerged in Silicon Valley in California. This led anyone who wished to hit a startup organization to hold so in Silicon Valley. The surge in the number of Silicon Valley startups led to a number of venture capital firms relocating to or expanding their Valley offices. This in reorient encouraged more entrepreneurs to locate their startups there.
In other words, venture capitalists sellers of finance and dot-com startups buyers of finance "clustered" in and around a geographical area.
The cluster effect in the capital market also led to a cluster issue in the labor market. As an increasing number of companies started up in Silicon Valley, programmers, engineers etc. realized that they would find greater job opportunities by moving to Silicon Valley. This concentration of technically skilled people in the valley meant that startups around the country knew that their chances of finding job candidates with the proper skill-sets were higher in the valley, hence giving them added incentive to move there. This in turn led to more high-tech workers moving there. Similar effects have also been found in the Cambridge IT Cluster UK.