Edited by Henry Wai-chung Yeung
Chapter 19: Innovation Policies for Asian SMEs: An Innovation System Perspective
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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