Table of Contents

Handbook of Research on Asian Business

Handbook of Research on Asian Business

Elgar original reference

Edited by Henry Wai-chung Yeung

The rise of Asia as an important region for global business has been widely recognized as one of the most significant economic phenomena in the new millennium. This accessible and comprehensive Handbook brings together state-of-the-art reviews of Asian business in an expansive range of areas including: business organizations; strategic management; marketing; state–business relations; business and development; and business policy issues.

Chapter 19: Innovation Policies for Asian SMEs: An Innovation System Perspective

Cristina Chaminade and Jan Vang

Subjects: asian studies, asian business, asian economics, business and management, asia business, international business, economics and finance, asian economics


Cristina Chaminade and Jan Vang Among policy makers and academics, consensus suggests that innovation is a crucial factor in generating economic growth and development in the developed world (Lundvall, 1992; Von Hippel, 1988). Traditionally, the importance of innovations is ascribed to the new competitive landscape stemming from increased economic globalization, new types of regulation of international trade (Amin, 2004), improved ICT technologies, and lower prices on transportation (Fröbel et al., 1980). In this structural explanation, firms in the developed world are forced to innovate to maintain their competitiveness, since firms located in developing countries can catch up by applying imitation-based strategies, and produce almost identical products to those manufactured in the developed world at a cheaper price (Vang and Asheim, 2006; see also the experience of Taiwan in Chapter 16 of this volume). Since firms in developing countries have been conceptualized as imitators it is not surprising that the importance of innovation for developing countries has only recently begun to be acknowledged. Traditionally, growth, catching up and development in less industrialized countries has been considered a matter of exploiting their comparative advantage in terms of low factor costs (especially labour costs). We do not wish to debate the reasons for focusing on countries’ comparative advantages. However, we argue that the models still suffer on several accounts. They tend to assume a mechanistic process that ignores the importance of firm’s innovative practices in the process of upgrading in the value chain, the particularities of firms in developing countries and...

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