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The Reconfiguration of a Latecomer Innovation System

Governing Pharmaceutical Biotechnology Innovation in South Korea


Dirk Johann

The book examines the evolving governance of pharmaceutical biotechnology in South Korea in order to derive conclusions about the dynamics of a latecomer system transition. Based on an analysis of innovation activities in the biomedical sector, which is complemented by expert interviews, the research contends that the Korean post-developmental state should be geared towards coordinating the interplay of technologies, modes of organization and institutions. An integrative framework is developed to describe system change as a co-evolutionary process in which the national and sectoral dimensions intersect. The case shows that the shaping of an environment in which innovation systems can develop sectoral transformative capacity is a central aspect of latecomer innovation governance.


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1 Introduction


South Korea (hereinafter Korea) has experienced a profound economic and industrial transformation, which remains an important subject of academic inquiry. After riding successfully the wave o f East Asia's economic dynamism for more than three decades, Korea plunged into a recession in the wake o f the 1997 Asian crisis. The crisis, which caused a systemic meltdown in the financial and corporate sectors across the economies of the region, revealed that the extended post-War era o f interventionist developmental state leadership in directing industrial development through vertical industrial policies (‘picking winners’) has finally drawn to a close. It also raised a fundamental question mark over the coordinative capacity o f the East Asian newly industrialised economies (NIEs) to cope with the new economic order shaping in the context of technological globalisation. A central aspect o f this order that developed in the aftermath o f the Cold War has been the emergence of technology-based innovation as the primary source o f industrial development and economic prosperity. From whichever angle we look at Korea's successful entry to the global industrial scene, the most arresting feature has been a developmental state1 that proved highly effective in coordinating the process o f industrial catch-up in sectors where the rate o f technological change was low and factor accumulation was more important than scientific knowledge production. While the worldwide spread o f science-driven industrial technologies made endogenous knowledge generation imperative for industrial development strategies2, the building of catch-up competitiveness in Korea was largely based...

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