The Impact of Socio-Economic Institutions on Technology Development Strategies in Asia

Although there have been a number of scholarly efforts to integrate the comparative analysis of business systems and capitalist institutions with studies of dominant innovation patterns in some European and North American countries, comparative studies of the impact of different institutions and firm types on trajectories of technology development in Asian economies have been few and far between. In this paper, we suggest how the comparative analyses of business and innovation systems in Asian societies could be integrated by exploring the processes through which changing configurations of socio-economic organization have structured technology development strategies and patterns across major Northeast, Southeast and South Asian economies.

Specifically, we put forward a framework for analysing how differences in socio-economic institutions encourage different approaches to crafting technology development strategies in Asian countries. Such strategies are seen here as the outcomes of state technological policies and corporate strategies intended to tackle various challenges in the process of developing product and organizational innovations. State and firm strategies interact differently between systems of economic governance that vary in terms of: a) the way the state guides economic development, b) the extent and dominant mode of business co-ordination of economic action, and, c) the institutions structuring employment and work management patterns. Essentially, we argue that because these socio-economic institutions differ significantly between national political economies, states and firms interact differently across Asian societies and economies with contrasting socio-economic institutions will display varied trajectories of technology development.

We start by developing a theoretical model that emphasizes state organization, business co-ordination and work management institutions as the three key underlying institutions of industrial and innovative activities in Asia. Combinations of these institutions yield four distinctive forms of economic governance that predominate in Asian political economies: fragmented, state-organized, co-governed, and networked. These affect the nature of state industrial policies and corporate strategies that are likely to be implemented to tackle various challenges facing the innovation process that include: a) managing market and technological uncertainty, b) coordinating investment in the creation of new industries, c) developing innovative capabilities and, d) diffusing new knowledge. We distinguish four combinations of these policies and strategies, or four "technology development regimes" that are likely to be established in different Asian economies. Finally, we suggest how how these different technology development regimes are causally linked to variations in the structures of state organization, business co-ordination and work management across the region. The overall argument of this article is that these socio-economic structures constitute the institutional ensemble through which industrial policies are formulated, corporate behaviours shaped and technological changes determined.