Industrial Clusters, Upgrading and Innovation in East Asia

Industrial Clusters, Upgrading and Innovation in East Asia

Edited by Akifumi Kuchiki and Masatsugu Tsuji

This lucid and informative book analyzes the problem of clusters in transition through studies of agglomerations at different stages of development in various East Asian countries.

Chapter 3: Promoting Regional Integration through Industrial Cluster Policy in CLMV Cities

Akifumi Kuchiki

Subjects: asian studies, asian economics, asian urban and regional studies, development studies, development economics, economics and finance, asian economics, development economics, economics of innovation, industrial economics, regional economics, innovation and technology, economics of innovation, urban and regional studies, clusters, regional economics

Extract

Akifumi Kuchiki 3.1 INTRODUCTION While there are large industrial agglomerations or clusters such as the automobile industry cluster in Shanghai and Guangzhou, China, in East Asia, there are almost none in Cambodia, Laos, or Myanmar. Cambodia, Laos, Myanmar, and Vietnam are referred to as the CLMV countries, and started to grow later than other ASEAN countries such as Singapore, Malaysia, and Thailand. It may be difficult to narrow the gaps between countries in East Asia without the development of industrial clusters in CLMV country cities. In his development theory, Nurkse (1953) explained that there exist vicious cycles of poverty in developing countries. Nelson (1956) also proved that there exists a low-level equilibrium trap. Rostow (1960), Rosenstein-Rodan (1943), and Leibenstein (1957) advanced the concepts of take-off, big push, and critical minimum effort, respectively. Yokoyama (1997) derived the policy implication that developing countries must attain critical minimum effort via the big push concept in order to extricate themselves from the trap and take off. The big push strategy that paved the way for Asian countries to lift themselves out of their low-level equilibrium trap has changed since the 1980s. The more recent strategy is to invite participation in Export Processing Zones (EPZs) by foreign direct investment in labor-intensive manufacturing industries with high backward linkage values. The idea of industrial clusters was tapped to induce foreign investors to agglomerate in industrial zones in the Asian economies. Canon established a factory and began operations in Thang Long Industrial Park in Hanoi in 2001. Other...

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