In Search of an Innovative State: The Development of the Biopharmaceutical Industry in Taiwan, South Korea and China

Authors

  • Jenn hwan Wang,

    1. is Chair Professor at the Graduate Institute of Development Studies, Director of the Center for China Studies and Joint Research Fellow of the Institute of International Relations at National Chengchi University, Taiwan. Professor Wang has published broadly on a variety of topics, including economic development, technological innovation and urban development in Taiwan, South Korea and China. He can be contacted at: wangjh@nccu.edu.tw
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  • Tsung-Yuan Chen,

    1. is a Doctoral Candidate at the Graduate Institute of Development Studies in National Chengchi University, Taiwan (e-mail: kurtchen1979@yahoo.com.tw). His research interests include development issues in East and Southeast Asia, economic sociology, business history, and Chinese capitalism.
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  • Ching-Jung Tsai

    1. is a Doctoral Candidate at the Graduate Institute of Development Studies in National Chengchi University, Taiwan (e-mail: kurtchen1979@yahoo.com.tw). His research interests include development issues in East and Southeast Asia, economic sociology, business history, and Chinese capitalism.
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The funding for the research on which this paper is based was provided by the National Science Council of ROC (97-2410-H-004-077-MY3) and Top University Grant of National Chengchi University, Taiwan. The authors would like to extend their gratitude to Joseph Wong, Doug Fuller and three anonymous reviewers for their comments and suggestions.

ABSTRACT 

Recent developments in the biopharmaceutical industry in Taiwan, South Korea and China bear witness to the transformation of these states in nurturing an innovation-based industry. This article argues that the segmentation of the value chain of the biopharmaceutical industry has provided industrializing countries with a window of opportunity. These East Asian states have modified their former catching-up approaches by establishing a more effective institutional platform that can attract knowledge-creation players to the industry. Through case studies, the authors show that the Taiwan state's promotion of the biopharmaceutical industry has been based on an incremental approach; existing state policies have been modified to cope with the demands of the industry, which has resulted in the continuation of its SME-based industrial structure. The methods of the Korean state have been more radical, in that the policies that previously favoured the chaebols have gradually been reoriented toward the promotion of smaller, science-based firms that now co-exist alongside the chaebols. Finally, the Chinese state and local governments have sought to promote this innovation-based industry by building biotech parks. This approach has resulted in a boom in new science firms, which have become increasingly isolated from the flourishing domestic SOE-led market.

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