Clustering in East Asia – implications of Japan’s industrial development model
Clustering in East Asia – implications of Japan’s industrial development model

Summary/Abstract: East Asia has experienced a radical transformation of development policy, determined by the Japanese model of industrialisation, local specificities and contemporary global challenges. Clustering, stimulated by the open, liberal course of regional economies, contributed to the massive inflow of FDI and formation of networks involving local SMEs. The unilateral “race to the bottom” trade liberalisation and aggressive competition among East Asian developing economies in attracting FDI became harsh in the early 1990s. Japan’straditional industrial policy’s orientation on competitiveness has been replaced by a focus on innovativeness. Product and process innovations, and new business models are expected to stimulate productivity, and so export’s competitiveness, which is crucial from the perspective of states with export-based growth model. The dramatic experiences of the Asian financial crisis of 1997–98 inspired the reconfiguration of development policies from the heavy dependence on input of additional physical capital goods and labour forces towards innovation-driven, network-type, open, flexible production structures, vertical specialisation and clustering of networked local SMEs. The major determinants of the East Asian industrial cluster approach are as follows: intensive R&D activities by public and private entities that stimulate innovativeness, development of ICT that favour competition, cooperation and communication, finally – more intensive interactions between manufacturing and the service sector, especially because of the added value that occurs when combining managerial or marketing innovations with particular industries, products and processes.

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