Asia’s Innovation Systems in Transition

Asia’s Innovation Systems in Transition

New Horizons in the Economics of Innovation series

Edited by Bengt-Åke Lundvall, Patarapong Intarakumnerd and Jan Vang

The success of Asian economies (first Japan, then Taiwan, South Korea, Singapore, Hong Kong and, more recently, China and India) has made it tempting to look for ‘an Asian model of development’. However, the strength of Asian development lies less in strategies that reproduce successful national systems of innovation and more in the capacity for institutional change to open up new development trajectories with greater emphasis on knowledge and learning. The select group of contributors demonstrate that although there are important differences among Asian countries in terms of institutional set-ups supporting innovation, government policies and industrial structures, they share common transitional processes to cope with the globalizing learning economy.

Chapter 6: Hong Kong’s Innovation System in Transition: Challenges of Regional Integration and Promotion of High Technology

Erik Baark and Naubahar Sharif

Subjects: economics and finance, economics of innovation, innovation and technology, economics of innovation


Erik Baark and Naubahar Sharif INTRODUCTION In recent years Hong Kong has regained its traditional position as the key transit point for the exchange of goods and services between China and the international economy. Sophisticated and reliable intermediary services occupy a key role in maintaining this status, so Hong Kong’s future seemingly depends on the capacity of its intermediary firms to maintain a considerable share of business in Asian markets and the global economy (Meyer, 2000, p. 247). Hitherto, however, technological innovation in Hong Kong has been undervalued as an element in Hong Kong’s developmental experience and the few studies to have addressed the issue have emphasized the laissez-faire policies that shaped the process of industrialization in Hong Kong (for example Hobday, 1995). Hong Kong’s entrepreneurs have skillfully exploited technology available on the international market, but they have not generally carried out research and development for the purposes of creating proprietary technology (Davies, 1999). Technological innovation has therefore only recently begun to attract serious attention in Hong Kong, where the Government in 1998 launched a new strategy in pursuit of knowledge-intensive economic growth. Our point of departure for this chapter is the proposition that a system of innovation has been emerging in Hong Kong for at least the past century, conditioned by major economic and political upheavals at the global level accompanied by gradual institutional change at the local level. This transition in innovation has accelerated lately, as influential economic and political forces have reasserted themselves with the return...

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