The paper reports on research to examine the causes of the concentration of electronics R&D in particular regions of the UK. A historical perspective was taken, examining the evolution of the principal firms in terms of their internal strategies and organisation, and their relations with external market, public sector and labour market influences. The paper begins with an introduction to the concepts adopted, and especially the insertion of questions of business strategy into industrial geography. The empirical evidence follows, commencing with an outline of the historical framework of the development of business strategy in the sector, and its consequent impact on functional‐spatial organisation. This is then further disaggregated by a consideration of the characteristics of R&D employment in the industry, and particularly the heterogeneous range of labour market conditions and practices adopted and their implications for the geographical segmentation of labour markets. Finally the paper considers the implications for the future development of the electronics industry in the UK.