Award Holder(s): Prof. Mike Hobday (Science Policy Research Unit)
Prof. Alan Cawson (Sussex European Institute)
University of Sussex
Award No. L324253023
Technological Dynamics of Pacific Asia: Implications for Europe
Amount of Award: £177,130
Period of Report: 1.1.97 to 31.12.97
Aims and Methods of Research:
The project, now nearly completed, has analysed the technological dynamics of Pacific Asia and drawn implications for Europe. The aim was to explore the sources, mechanisms and directions of technological change among firms and to analyse the role of governments in stimulating innovation and progress. Focusing on electronics, case studies were conducted covering (a) local firms' innovation progress; (b) European (and other) transnational corporations (TNCs); and (c) firm-government partnerships for technology. In-depth field work was carried out in South Korea, Taiwan, Thailand and Malaysia. This was combined with desk-based research on other fast growing economies. The research highlighted best practice innovation strategies, generated a taxonomy of firm-government partnerships in the region and illustrated the position of European TNCs.
Highlights of Research and Important Findings:
Progress to date
During the third and final year (Jan. 1997 to Dec. 1997), field work in Taiwan was conducted according to plan (from 14 to 29 April 1997), building on the research in Korea, Malaysia, and Thailand carried out in years one and two. A follow up visit to Korea was also made possible by external funding from the Korean Ministry of Science and Technology to attend an international conference in Seoul.
A total of 17 papers were produced for the project, far more than anticipated (9 new papers were produced this year, see publications below). Among the main findings/contributions in Year 3 were:
2. the empirical evidence gathered challenges current thinking on the effectiveness of government technology policies in Pacific Asia and calls into question views on the developmental state
3. most technology advance in Korea and Taiwan has been generated by local firms in partnership with foreign technology suppliers and buyers, rather than through government-led initiatives
4. the OEM system, although remarkably successful as a technology transfer mechanism in East Asia, has its weaknesses. Indeed, it is rivalled in some respects (e.g. exports) by the TNC-driven system in the countries of South East Asia (Hobday 1997b)
5. contrary to popular wisdom important technology progress has occurred within the TNC subsidiaries in South East Asia, mainly focused on production processes (Hobday 1998)
6. the main developmental approach (exemplified by the state vs market debate) is a very blunt instrument for understanding economic progress in Pacific Asia; an alternative framework proposed explicitly accounts for firm behaviour, sectoral specificities, changes over time (towards the 'post-developmental state') and the important, changing role of foreign capital in each country (Ran Kim 1997d, Hobday et al 1998).
Other important and novel findings resulted from the research project over the three years. The comparison of Korea's successful semiconductor catch up with their less than successful attempts to enter in advanced multimedia and software technologies, revealed the weaknesses of chaebol latecomer firms in research-intensive 'frontier' technologies (Ran Kim and Cawson 1997). Traditional strategies of scale-intensive mass production resulted in organisational structures and competencies which, although appropriate for hardware, act as barriers to progress in frontier areas of information and communications technologies (ICTs). Therefore, in addition to the problems caused by the current economic crises, Korean firms need to confront their strategic weaknesses in order to achieve greater flexibility, speed to market, software skills, and the ability to cope with uncertainty in frontier technologies.
Our project funding and field research has now ended and we have conducted a wide range of end-of-project dissemination activities (see below). However, we will continue to work within the PAP through the refinement of working papers, submission of further journal articles from the project and through active dissemination in seminars, meetings and special events. Six specific events are planned for the very near future:
2. Further advice to the Innovation Unit of the DTI, as their work on Pacific Asian firms continues;
3. Finalisation of paper by (Hobday 1997b) to a new book on the advance of the Pacific Asian economies, edited by distinguished US economist (Prof. Richard Nelson);
4. Revision of contribution to a forthcoming book by Sir Geoffrey Owen (LSE) and Dr. Martin Fransman (Edinburgh) on the global electronics industry (Hobday 1997a);
5. Finalisation of an article to Industrial and Corporate Change on governance patterns of the Korean electronics industry (Ran Kim 1997d);
6. Meeting to discuss research outputs with senior executives of the Office of Science and Technology at the DTI (December 1997).
Papers and Publications Arising from the Project
Of the following 17 papers three were not directly funded, but made possible by the Pacific Asian Programme, and carried out within the SEI-SPRU project by team members, colleagues and students (marked #).
Chairatana, P. (1997): Latecomer Catch-up Strategies in the Semiconductor Business: the Case of Alphatec Group of Thailand and Anam Group of Korea, MSc Thesis, SPRU, University of Sussex.#
Heighes, T. and Hobday, M. (1997): 'The European Electronics Industry', chapter in D. Dyker (ed) The European Economy, Longmans, forthcoming.
Hobday, M. (1996): 'Innovation in South East Asia: Lessons for Europe?', Management Decision, Volume 34, Number 9, October, pp71-82 (longer version in forthcoming book by Jomo, see Hobday 1998).
Hobday, M. (1996a): 'Korea: Facing the Challenge of Restructuring', in Technology Institutes: Strategies for Best Practice, Thompson, London, 1996 (by H. Rush, M. Hobday, J. Bessant, E. Arnold, R. Murray).
Hobday, M. (1996b): 'Taiwan: Incubating High Technology Industries', in Technology Institutes: Strategies for Best Practice, Thompson, London, 1996 (by H. Rush, M. Hobday, J. Bessant, E. Arnold, R. Murray).
Hobday, M. (1996c): 'Singapore: Encouraging Foreign Transnationals to Take Root', in Technology Institutes: Strategies for Best Practice, Thompson, London, 1996 (by H. Rush, M. Hobday, J. Bessant, E. Arnold, R. Murray).
Hobday, M. (1996d): 'Hong Kong: Improving Productivity and Overcoming Market Failures', in Technology Institutes: Strategies for Best Practice, Thompson, London, 1996 (by H. Rush, M. Hobday, J. Bessant, E. Arnold, R. Murray).
Hobday, M. (1997): Mutual Benefit: Pacific Asian Dynamism and the UK's Response: paper prepared for distribution at the Pacific Asia Research Programme Annual Lecture (scheduled for Jan. 1998).
Hobday, M. (1997a): 'Latecomer Catch-up Strategies in Electronics: Samsung of South Korea and ACER of Taiwan', Asia Pacific Business Review, (forthcoming, Spring 1997); version also accepted in forthcoming book on the Global Electronics Industry, (eds). Sir Geoffrey Owen and Martin Fransman forthcoming.
Hobday, M. (1997b): 'East vs South East Asian Innovation Systems: Comparing OEM and TNC-led Growth in Electronics', accepted for forthcoming book edited by R. Nelson and L. Kim on Pacific Asian Economic Development; revised version of paper presented as conference paper at KIST Science and Technology Policy Institute (STEPI) 10th Anniversary Conference: 'Innovation and Competitiveness in Newly Industrialising Economies', May 26-28 1997, Kyong-Ju, South Korea.
Hobday, M. (1997c): 'The Technological Competence of European Semiconductor Producers', International Journal of Technology Management, Volume 14, Numbers 2/3/4, pp401-414.#
Hobday, M. (1998): 'Understanding Innovation in South East Asia: Malaysia's Experience in Electronics' (accepted for forthcoming book, Malaysia's Industrial Technology, K. S. Jomo (ed), University of Malaya, KL Malaysia).
Hobday, M., Cawson, A. and Ran Kim, S. (1998): The Pacific Asian Electronics Industries: Technology Governance and Implications for Europe, SEI Working Paper, forthcoming.
Ran Kim, S (1997): 'Korea's Successful Specialisation in Memory Chips', in Knowledge Societies: Information Technology for Sustainable Development, Report Prepared for the United Nations Commission on Science and Technology for Development, Ed. by R. Mansell and U. Wehn, forthcoming, Oxford University Press, pp122-126.#
Ran Kim, S (1997a): The Evolution of Governance and the Growth Dynamics of the Korean Semiconductor Industry, Sussex European Institute (SEI), Working Paper, No. 20. Brighton.
Ran Kim, S (1997c): The Dynamics and Alignment of Networks of Networks: Explaining Taiwan's Successful IT Specialisation, SPRU Working Paper (forthcoming).
Ran Kim, S (1997d): 'The Korean System of Innovation and the Semiconductor Industry: a Governance Perspective': submitted to Industrial and Corporate Change, await decision
Ran Kim, S and Cawson, A. (1997): 'The Korean Electronics Industry: from Semiconductors to Multimedia', InfoWin Bulletin, May.
Engagement with Non-academic Research Users:
Engagement with users shaped the initial research proposal, contributed to each phase of the research and will continue after the official end of the project in December 1997. Some of the specific activities conducted during the past year are as follows:
2. A written contribution was made to a major UN study on knowledge societies to be launched in paperback this year by OUP (Ran Kim 1997);
3. Results from the project was presented by Prof Hobday to a large international audience in Korea (funded by the Korean Government) in May 1997;
4. Prof. Hobday corresponded with Tony Blair who promised to read the main findings!
5. Presentations were given to:
Prof. Sir Robert May, the Chief Scientist and Head of OST (at SPRU)
Michael Scholar, Permanent Secretary to the DTI (at SPRU)
Dr. Joe Anderson, Director, Wellcome Trust Policy Research Group (PRISM).
· Alistair Keddie, Head of Innovation Unit, DTI
· Mike Porteous, Head of P-A Division, Invest in Britain Bureau, DTI
· David Coates, Head of Far Eastern Pacific Department, FCO
· Peter Hayes, Head of Pacific Asia/International Office of S&T, DTI
· James Own, International Economics, DTI
· Peter Carter, Management and Technology Services, DTI
· Mike Mowlam, Trade Promotion, Americas, DTI
· Tony Keegan, Head - Pacific Rim Electronics Business Association (PREBA), DTI
· Steven Cook, Trade statistics for PA, FCO
· Mike Cohen, Director of Trade Promotion, PA, DTI
· Alex Pratt, Innovation Unit, PA firm-level issues