Industrial Clusters, Upgrading and Innovation in East Asia
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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.
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Chapter 10: Effects of Technological Networks of Small and Medium-sized Firms on their R & D Activities in Shihwa Industrial Complex, Korea: Toward Industrial Cluster Formation and Regional Integration

Yoshihiro Kameyama


10. Effects of technological networks of small and medium-sized firms on their R&D activities in Shihwa Industrial Complex, Korea: toward industrial cluster formation and regional integration* Yoshihiro Kameyama 10.1 INTRODUCTION Since the late 1960s, South Korea has accomplished remarkable economic growth. The real GDP growth rates of between 6 and 11 percent were recorded before the financial crisis occurred in 1997. In this process, South Korea reached the level of a developed country. The economic growth of South Korea was based on the development of manufacturing, and was promoted by the export initiation policy of the South Korean government.1 After the early 1990s, however, the developed countries generally came to lose comparative advantage in mass production, and the developing countries began to gain comparative advantage in mass production using their abundant low-wage labour.2 Several years later, a certain type of bipolar system in which the developing countries comparatively specialized in mass production and the developed countries comparatively concentrated on knowledge creation has been constructed in the world. In this vein, since the early 1990s the South Korean government has come to shift the production system from the mass production type to the knowledge creation type in order to produce high value-added products as important home country items. However, the conversion of the industrial structure has not advanced easily. The causes of this are the monetary crisis in 1997, the progress of the declining birthrate, and the growing proportion of elderly people in South Korea. The construction of the production...

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