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Epilogue: Implications fromindustrializing East Asia's innovationand learning experiencesRajah Rasiah aa Centre of Regulatory Studies, University of Malaya , KualaLumpur, MalaysiaPublished online: 19 Apr 2011.
To cite this article: Rajah Rasiah (2011) Epilogue: Implications from industrializing EastAsia's innovation and learning experiences, Asia Pacific Business Review, 17:02, 257-262, DOI:10.1080/13602381.2011.533500
To link to this article: http://dx.doi.org/10.1080/13602381.2011.533500
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Epilogue: Implications from industrializing East Asias innovation andlearning experiences
Centre of Regulatory Studies, University of Malaya, Kuala Lumpur, Malaysia
This conclusion provides a summary of the learning and innovation experiences ofselected East Asian economies, as well as using the evidence to draw implications fortheory and policy. The cross-country East Asian study of automotive parts provided thestarting block that underscored the importance of the embedding institutions andorganizations in driving innovation and learning in firms. Although local firms showedhigher R&D intensity levels than foreign firms thus reflecting the significance of homecountry advantages, intensity levels were higher in countries with a stronger high-techinfrastructure regardless of ownership differences. The subsequent cases address broadmacro innovation policies, for example in Thailand and Korea, and micro economicand technological catch up successes such as those in the button city of Qiaotou.Contrary to the neoclassical logic of leaving it to the markets, the evidence amassedshows that a combination of markets, government and cooperation has beeninstrumental in successful innovation and learning outcomes in East Asia.
Keywords: catch up; East Asia; innovation; learning
The examples discussed in this volume provide a wide range of experiences that stand out
as technological learning and innovation achievements in their respective countries in
East Asia. The research experiences presented in this collection examined technology and
innovation in both the richer (e.g. Korea) as well as the poorer economies (e.g. Laos), as
well as the larger (China) and smaller countries (e.g. Malaysia and Laos). In this
conclusion we examine the implications of the findings for both theory and policy.
To recap, the examples were chosen because of the significance of the sectors to either the
national economy or their contributions in world production. In the conclusion we discuss
the implications of the experiences for theory and policy.
2. Key findings
Using evolutionary methodologies, the research provided a novel analytical explication of
innovation and learning in selected experiences from East Asia. This section summarizes
the important innovation and learning experience findings in the volume.
Rasiah showed that statistically the embedding institutional and organizational
environment is critical to automotive parts firms participation in higher technology
activities in China, Indonesia, Korea, Malaysia, the Philippines, Taiwan and Thailand.
Although there were mixed results with the particular technologies involved, only the
ISSN 1360-2381 print/ISSN 1743-792X online
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Asia Pacific Business Review
Vol. 17, No. 2, April 2011, 257262
degree mattered with ownership in the dependence of firms on the supporting institutions
and meso-organizations. The dependence of firms on the supporting environment is
highest when involving R&D intensities. However, foreign firms clearly enjoyed far
higher export intensities than local firms which could also be a consequence of the
predominantly open trade regimes that faced East Asian economies from 2000.
Rasiah, Kong and Vinanchiarachi provided a lucid account of the remarkable
progression of Qiaotou as a button using and distributing town in the late 1970s into a
button manufacturing town in the 1980s and into a composite cluster of mature button
firms engaged in both manufacturing, and designing and materials development from the
late 1990s. The initial incorporation of the town in button sales was the evolvement from
entrepreneurs buying imported buttons from Hubei and distributing them to garment
manufacturers, to the development of hundreds of stores using market-based armslength
transactions. Increased demand for buttons attracted button manufacturing in Qiaotou but
its transformation into a composite cluster was very much driven by strong support from
the Yongjia County government, which assisted with both financial support as well as
attracting R&D support from the universities of Huanen and Lanzhou in new design and
materials development. A strong history of cooperation among the entrepreneurs in
Zhejiang province made collaboration initiatives both easy and productive. Hence, strong
interaction markets, government and cooperation has helped Qiaotou not only to produce
65% of the worlds buttons but also become a composite button cluster with strong
Unlike previously where the Government Research Institutes (GRIs) came under the
purview of their respective ministries, Lee argued that the reformed research council
system has allowed for greater autonomy in the operations of GRIs in Korea. There is
much less bureaucratic intervention in the operations of the GRIs under the new system
and this changed situation has led to positive outcomes in terms of research performance
within a relatively short period of time. The changes in the governance system of the
research councils also involved changes in the way funding was provided to the GRIs.
Under the reformed system, GRIs will be allocated funding by the central government
based on evaluation by the respective research councils which rank each GRI according to
a defined criteria of performance. Such an evaluation system has contributed towards
intense competition amongst the GRIs as well as the researchers. Despite the impressive
achievements following the introduction of the new research system, there remain
concerns over excessive rounds of evaluation which may exert unnecessary an
administrative burden on GRIs. In short, given committed and sustained support by the
government, pragmatic approaches to reforming the public research system can yield
positive outcomes within a short period of time.
Rasiah, Nolintha and Songvilay showed how small windows of opportunity can set off
manufacturing synergies even in the most underdeveloped of locations. Taking advantage
of preferential access to the European Unions everything but arms clause, Laos has
managed to experience growth in garment manufacturing since the late 1990s. Whereas
the economic synergies have evolved, the evidence shows that not much technological
deepening has taken place to suggest that garment manufacturing will be long lived once
the export access privileges in major markets expire. Although silk manufacturing enjoys
natural resource endowments, Laos distance from sea outlets make the country naturally
less attractive for garment manufacturing than Cambodia and Vietnam.
Among all obstacles, Ee Shiang and Nagaraj show that funding related obs