Clusters and Economic Growth in AsiaERIKSSON 9780857930088 PRINT.indd iiiERIKSSON 9780857930088 PRINT.indd iii29/01/2013 16:5929/01/2013 16:59vContentsList of contributors vi Preface ix1 Cluster policies and entrepreneurial states in East Asia 1Alexander Ebner 2 Information and communication technology and economic growth of four Asian industrialized economies 21Yanfei Li and Wai- Mun Chia 3 Industrial agglomeration of Taiwanese electronics firms in Dongguan, China: home effects and implications for industrial upgrading 40Felix Haifeng Liao, Karen Zhihua Xu and Bin Liang 4 The rise of the biomedical cluster in Wonju, Korea 66Jun Koo and Jongmin Choi 5 The global economic crisis as leverage for emerging regional growth paths? Differentiated evidence from China three years onwards 85Daniel Schiller and Henning Kroll 6 Technological intensity of FDI in Vietnam implications for future economic development and emerging clusters 119Curt Nestor 7 The aircraft industry as a tool for economic and industrial development the case of Indonesia 141Sren Eriksson 8 Foreign knowledge transfer in the development of aircraft industry clusters the case of Chengdu, China 165Sren ErikssonIndex 183ERIKSSON 9780857930088 PRINT.indd vERIKSSON 9780857930088 PRINT.indd v29/01/2013 16:5929/01/2013 16:5911. Cluster policies and entrepreneurial states in East AsiaAlexander EbnerINTRODUCTIONCluster policies aim to activate and sustain the competitive interaction of firms in local and regional business agglomerations. Policy instruments tend to augment market forces by providing distinct types of collective goods. As such, cluster policies differ markedly from traditional types of industrial policy that highlight the nationwide targeting of particular firms and industries by means of market intervention. Still, the logic of cluster policies is most convincingly derived from the persistent relevance of national institutional frameworks, most prominently involving nation- states, and their ongoing transformation in the process of economic development. This line of reasoning is most appropriately exemplified by the East Asian development experience. Indeed, it may be argued that the increasing relevance of cluster policies in East Asia parallels the advent of a new model of governmentbusiness relations that may be labelled entrepreneurial state. This concept suggests that entrepreneurial aspects of state activity, which were already prevalent within the East Asian developmental states, currently turn out as dominant policy features, thus changing the dominant rationale of government towards an entrepre- neurial direction, implying a shift from the developmental assimilation of technological novelties in catch- up growth to their entrepreneurial crea- tion in a setting that allows for technological leadership. The related policy rationale promotes innovation as the source of international competitive- ness, framed by a multi- level architecture of governance that strengthens a regionalized type of industrial policies, which points to the formation of cluster policies. Therefore, in examining this relationship among clusters, cluster poli- cies and the advent of the entrepreneurial state in East Asia, the following explorations proceed in three sections. First, the matter of cluster poli- cies and the role of the state in the promotion of clusters are brought to the fore. The discussion highlights the Porterian cluster approach and its ERIKSSON 9780857930088 PRINT.indd 1ERIKSSON 9780857930088 PRINT.indd 129/01/2013 16:5929/01/2013 16:592 Clusters and economic growth in Asiapolicy implications, underlining the impact of the national institutional framework on the actual orientation of cluster policies. The second section then takes on the transformation of the East Asian developmental states and their interventionist industrial policies. As the process of catch- up growth proceeds, new types of state functions arise that are well summa- rized under the label of entrepreneurial states. Corresponding changes in governmentbusiness relations allow for the promotion of cluster policy as a new kind of multi- scalar approach to industrial policy. Thus, cluster policies are an extension of the advent of the entrepreneurial state. The third section illustrates these arguments by pinpointing recent efforts in East Asian cluster policies.CLUSTERS, CLUSTER POLICIES AND THE ROLE OF THE STATEThe competitive advantages of firm- specific interactions within a particu- lar regional setting of industries and institutions are usually addressed in terms of industrial clusters. It is a widely shared insight that industrial clus- ters serve as the backbone of regional competitiveness. This implies that related approaches to the analysis of clusters provide conceptually sound, empirically significant and politically viable research perspectives. To some, however, the concept