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Journal of the Korean Geographical Society, Vol. 44, No. 5, 2009(634~646)

Multi-scalar Dynamics of Cluster Development: The Role of Policies in Three Korean Clusters* Hyungjoo Kim**·Jeong Hyop Lee***

다규모 공간에서 클러스터 발전의 역동성 -한국의 클러스터 사례에서 국가정책의 역할을 중심으로-* 김형주**·이정협***

Abstract：This paper critically examines cluster dynamics and development in a multi-scalar approach, criticizing both the argument overemphasizing local networks and endogenous development for regional development and the contention highlighting global networks and the role of global players. We argue that state policies, exogenous and direct, play a significant part in cluster dynamics and development especially in the case of Korea where the state government’s strong policies have led to rapid industrialization. We analyze multi-scalar factors, especially the government policies at a national level, in the development paths of the three cases including Ulsan automobile cluster, Daedeok research cluster, and Dongdaemun fashion cluster. Key Words : cluster, dynamics, multi-scalar approach, policies, Korea

요약：본 연구는 클러스터의 역동성과 발전과정을 다규모적 접근법으로 분석하였다. 지역발전에서 지역 내부의 네트워크와 내생적 발전을 강조한 논의나 글로벌 네트워크와 조직의 역할을 강조한 논의는 모두 한계를 가지며, 외부적이고 직접적인 국가 정책이 클러 스터의 역동성과 발전 과정에 미치는 역할은 과소평가되었다. 특히 강력한 정부 정책이 급속한 산업화를 이끌어온 한국의 경우 클러 스터의 발전 과정에서도 국가 정책이 중요한 역할을 했다. 울산 자동차 클러스터, 대덕 연구 클러스터, 동대문 패션 클러스터의 사례 에서 그 생성과 발전과정에 영향을 미친 지역 차원, 글로벌 차원의 다양한 요인들과 함께 국가 정책의 영향이 분석되었다. 주요어 : 클러스터, 역동성, 다규모적 접근법, 정책, 한국

1. Introduction recognized the role regions play in innovation and economic development (e.g., Storper, 1997). The rise of successful industrial clusters, such A large number of academic arguments on as Silicon Valley, in knowledge-based economies innovative clusters and policies to promote has received the attention of many scholars and successful clusters, largely in the Western context, policy-makers since the 1980s. They have have emphasized interactions between local

* An earlier version of this paper was presented at International Geographical Union Commission on the Dynamics of Economic Spaces in Barcelona (August 5-8, 2008). ** Associate Research Fellow, Human Resources Policy Research Division, Science and Technology Policy Institute, [email protected] *** Research Fellow, Glocal Cooperation Research Center, Science and Technology Policy Institute, [email protected]

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innovators and regional institutions; these will examine the dynamics of three Korean interactions bring self-sustaining endogenous industrial clusters in a multi-scalar framework, development (Lee, 2009). focusing on the role of government policies. The However, their exclusive focus on local next sections will critically review theoretical networks and endogenous development has arguments about cluster dynamics on various been criticized for not taking into account non- scales and the role of policies in cluster local networks and other exogenous factors development and will translate the arguments affecting cluster dynamics. According to the into the Korean context. Based on this, we will critics, innovation networks and knowledge flows investigate the dynamics of three Korean clusters are not confined to the local level but involve at various levels and the role of policies in cluster global linkages. Both sides of the argument, generation and development. however, overlook the significant role of exogenous government policies and multi-scalar factors affecting cluster dynamics and 2. Cluster dynamics and development development. in a multi-scalar framework The Korean case is an example that shows the importance of government policies at a national level in cluster dynamics and development. Korea In recent years, the significance of regions in a has been referred to as a successful model of a globalized economy has been highlighted, and developmental state where government policies studies on innovative clusters and policies to combined with dominant large firms have led to promote successful clusters have abounded in rapid industrialization and economic growth. academic and policy circles. A cluster is defined Many of the Korean clusters have been created as a localized industry configuration where by strong national government intervention; the interrelated firms concentrate within a local legacy of the developmental state model is boundary (Porter, 1998). The concept emphasizes imprinted on their development path. However, internal relations between local firms and the recently criticism has grown and the limits of importance of “traded and untraded government policies’ effect on clusters are often interdependencies” (Storper, 1997) for supporting pointed out. the concentration (Depner and Bathelt, 2005; Considering the gap between the above Asheim and Gertler, 2005). The related studies arguments and the reality of the Korean case, we have focused on interactions between local aim to answer the following research questions. innovators and regional institutions—these What drove the generation and development of interactions foster self-sustaining endogenous Korean clusters? Have they been influenced by development—largely in the Western context multi-scalar factors on the local, national, and (e.g., Saxenian, 1994). global scales? And have the government policies However, criticism has arisen that these studies of Korea, where the state has led industrialization, exclusively focus on local networks and played an important role in cluster dynamics and endogenous development, while neglecting non- development? If the government’s policies played local networks and other exogenous factors a key role, are they still effective in promoting affecting cluster dynamics. The concept of cluster innovation? “global commodity chains” emphasizes the In order to answer the above questions, we advantages of international production

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organizations and governance structures for global scales, affected by not only endogenous regional economic success. They emphasize the local factors but also exogenous ones (Lee, 2008). role of trans-local actors, especially external The production linkages and innovation networks global firms and their networks with local actors of a cluster are often extended to the national for regional upgrading (Gereffi and Korzeniewicz, and global division of labor. Communities of 1994; Gereffi et al., 2005). The “global production practices also cross interregional and even networks” thesis argues that strategic coupling international boundaries. And exogenous actors between global production networks and local and relationships play a larger role at a national institutional thickness, mediated by diverse and global level (Asheim and Gertler, 2005). The institutional forces, is key for regional economic spatial multiplicity of clusters, however, is not a development (Coe et al., 2004; Yeung, 2009). static or uniform phenomenon (Lee, 2008). Each Both sides of the arguments often overlook the cluster has its stages of rise, growth, decline, and significance of the national level or recognize it as rejuvenation, which are influenced by specific a secondary and indirect factor for cluster multi-scalar factors (Maskell and Malmberg, dynamics and development. The national level is 2007). important in determining the configuration of the Among the multi-scalar factors affecting cluster regional production system and cluster dynamics and development, we argue that state development (Bathelt, 2003). Distinctive regional policies, exogenous and direct, should be taken institutional endowment is associated with into particular account. The role of state policies particular regimes of business systems and in cluster dynamics and development has often institutional frameworks at a national level been underestimated, particularly in Western (Asheim and Gertler, 2005). contexts. Bresnahan et al. (2001) argue that state Accordingly, the authors believe that the policies have not had a substantial influence on dynamics of a cluster can be better understood as the establishment of clusters, including both a multi-scalar process. The multi-scalar approach advanced and emerging regions; their study in geography has recently received attention focused mostly on Western countries. Instead, since it provides a tool for grasping the global, their work underscores the degree of openness in national, and regional economic and social regional economic relations and connections with dimensions of economic globalization (Park, large external markets in order for clusters to be 2009). It adopts the relative notion of scales in successful. However, state policies have played a contrast to the conventional view, which regards significant part in regional economic scales as being separate and distinct from each development, particularly in East Asian countries other. It understands the notion of scales as (Yeung, 2009). For instance, the role of the state interrelated and relative to each other in contrast was essential to the establishment of high- to the conventional view, which regards scales as technology parks in Taiwan (Yang et al., 2009). being separate and distinct from each other. The next section will review the role of The innovative actors in clusters interact with government policies in the history of Korean other various actors not only within the boundary clusters, where the central government’s strong of the cluster but also in different spatial efforts have led to rapid industrialization and dimensions. The dynamics and development of economic growth. industrial clusters occur in multi-scalar dimensions, including on the local, national, and

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3. Clusters in Korea: the role of the mid-1980s, the focus of government policies government policies has moved to high-technology industries. Since the late 1990s, the Korean government has increasingly favored knowledge-intensive Korea is often referred to as a successful industries. The policies supporting high- example of a developmental state, which is technology and knowledge-intensive industries characterized by a strong central government that resulted in a concentration of those industries in deliberately and strategically supports large the capital region, which was a result not enterprises and industrial competitiveness. The intended by the government policies (Park, influence of the national level has dominated the 2009). local and global dimensions of most industrial The term “cluster” recently received a lot of cluster dynamics in Korea. Government policies attention in Korea and became one of the key have directly supported the generation of words in the national government’s “new regional industrial agglomerations in a number of regions. policy” for balanced development between 2003 Dynamics and development of such regions are and 2008. The policy intended to enhance largely directed from outside and above the endogenous growth potential and national region; for the most part, innovation occurs as a competitiveness by promoting innovative clusters. product of government policies (Cooke et al, The Korean government’s industrial policy in that 2007). period consisted of two parts: an innovative The history of the Korean government’s cluster policy and a regional strategic industry policies on industrial clusters goes back to the policy. The first one was intended to transform 1960s. The government sought export-oriented existing industrial complexes into innovative industrialization and supported particular sectors clusters.1) Each was specialized in a particular and locations. Labor-intensive industries were the industry, and networking between local firms was strategic industries in the 1960s; heavy and underscored. And Daedeok science town was chemical industries were strategically promoted in designated as a special district and promoted as a the late 1970s and in early 1980s. The national research cluster. Second, a couple of strategic government established several large industrial industries were specified in every province and complexes in the southeastern part of the major city of Korea, and policy supports were country, including Ulsan, Changwon, Gumi, and provided through infrastructure building, R&D Pohang, which later developed into industrial support, human resource development, and clusters. However, the industrial complexes in the networking support among industries, early stage of development lacked significant universities, and research centers. Building local production networks, with only limited regional innovation systems in the provinces and linkages between large firms and their suppliers major cities, especially in the non-capital regions, (Park, 2009). The Korean government created was a goal of the new regional policy. The numerous government research institutes to policies were initiated by the central government; undertake research and development (R&D) however, local governments have been activities, which helped Korean firms develop increasing their role in developing clusters in technologies (Kim, 1999). It also established the their regions (Lee et al., 2006; Lee, 2009; Park, Daedoek Research Park, where many 2009) Overall, policies on developing clusters and government research institutes are located. Since regional innovation systems resulted in the

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building of infrastructure for innovation in each Each cluster experienced challenges and region and connecting industries with local opportunities and recently recognized the need to universities (Sohn et al., 2009). However, it upgrade to an innovative cluster. We examine remains to be seen how the government’s development of each cluster in three stages: early policies on cluster development will contribute to stage and development, transformational stage, upgrading industrial clusters into innovative and upgrading stage. clusters. 1) Ulsan automobile cluster

4. Three Korean clusters in a Ulsan is one of the largest automobile clusters, which has 193 companies, including Hyundai multi-scalar framework Motors, and whose production volume is about US$25 billion (as of January 2007).2) Figure 1 We selected three Korean clusters—Ulsan shows the development path of the Ulsan automobile cluster, Daedeok research cluster, and automobile cluster by stages in a multi-scalar Dongdaemun fashion cluster—to investigate framework. cluster dynamics and development in a multi- scalar framework and to analyze the role of (1) Early stage and development government policies in the process. The three The early growth of Ulsan was the result of cases were selected based on the characteristics Korean national government policies coupled of major local innovators and the role of with the presence of a large company (Park, government policies in the initial stage of cluster 2009; Lee et al., 2006; Sohn et al., 2009). Since the development. First, the Ulsan automobile cluster 1960s, Ulsan has grown to be one of the major is a case in which national policies combined centers of Korean auto manufacturing, petroleum with the presence of a dominant large firm refining, and shipbuilding. Ulsan has experienced played a key role in generating the cluster. accelerated growth as a result of having been Second, the Daedeok research cluster is an designated one of the “Special Manufacturing agglomeration of research institutes driven by Districts” in the Korean government’s 1962 national policies, and its development path has Economic Development Plan (Bok et al., 2003). been influenced by diverse national policies. Last, The government policies encouraged the growth the Dongdaemun fashion cluster is a case where of chaebols (Korean business conglomerates). numerous small actors form tightly connected Ulsan has been the hometown of Hyundai production networks; it is a self-generated cluster Motors since 1969. As Hyundai expanded its car without support from government policies. production, its suppliers began to locate facilities Development of the clusters is analyzed by in Ulsan. In the early stage, local production three stages, rather than four stages as mentioned linkages were formed between suppliers and in Maskell and Malmberg (2007)—rise, growth, Hyundai, and some of the employees of Hyundai decline, rejuvenation. The three clusters have not later established their own auto parts companies. experienced the stages of decline and However, the interactions between Hyundai and rejuvenation and are now in an upgrading stage. its local suppliers were limited to production In their early stage, these clusters had limited volume and delivery, and most of the suppliers local linkages and lacked innovative activities. lacked design capabilities (Lee et al., 2006).

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As Hyundai has grown in the domestic market Since the 1990s, several leading suppliers in and expanded into the global market, interactions Ulsan have enhanced their own capacity of between Hyundai and its local suppliers have production and process innovation. However, strengthened and strong engineer networks have some have charged that the power structure developed among them. Despite this, Ulsan is still between Hyundai and its suppliers has created dominated by Hyundai and collaborative bottlenecks, preventing the smooth transition to networks between local suppliers did not an open and continuous experimentation of develop (Lee et al., 2006). locally embedded horizontal networks, essential to innovative activities (Jo, 2006). (2) Transformational stage The Ulsan production system has recently (3) Upgrading stage confronted challenges in relation to the national In order for the Ulsan cluster to take off as an and global level. Hyundai’s relocation of its R&D innovative cluster, suppliers need to develop their center to the capital region in 2005 caused the own R&D capabilities in order to create stronger weakening of the link between R&D and innovative networks between Hyundai and its production. Hyundai also invested in establishing suppliers. While a small number of suppliers production lines and R&D centers in foreign have developed their own innovation capabilities, countries, and some of its second- and third-tier a majority of them are still dependent on suppliers moved their production facilities to Hyundai and accustomed to subcontracting based other developing countries with lower wages on vertical networks. This results in low intention (Lee et al., 2006). on the part of suppliers to create their own

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Figure 1. Ulsan automobile cluster

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technological innovation through R&D activities. 2) Daedeok research cluster Developing collective production networks would help the first- and second-tier suppliers to Daedoek is a research cluster located in the city produce quality products to sell in the global of Daejeon, which has 977 organizations, market (Lee et al., 2006). including 73 government research institutes, 6 Recent government policies, not only at the universities, and 898 companies. It has 40,338 national level but also at the local level, have employees, including 6,800 Ph.Ds, as of 2007. supported upgrading the Ulsan automobile Figure 2 shows the development path of the cluster to a center for global sourcing. They have Daedeok research cluster by stages in a multi- especially targeted developing suppliers’ scalar framework. technological capabilities. There have been two recent projects supporting the Ulsan automobile (1) Early stage and development industry: first, the Ulsan Auto Valley Project by The Daedeok Science Town was established as the City of Ulsan; and second, the Innovative part of the central government’s plans for science Cluster Project by the Korea Industrial Complex and technology development. The plan’s aim was Corporation (KICOX). The Auto Valley Project to build a research park where research institutes aims to help suppliers in Ulsan develop and universities were collocated and innovative technological competitiveness and participate in networks connected with each other. The plan’s global parts sourcing. The City of Ulsan mission was to help domestic industries develop established the Automotive Parts Innovation technologies (Ministry of Science and Center and has been supporting suppliers by Technology, 2008). In its early stage, Daedeok providing services including marketing, exports, was just a place where a number of government and networking.3) KICOX, one of the agencies of research institutes were collocated. It lacked local the central government that previously focused interactions and knowledge exchanges. Each on management of infrastructure, has been research institute largely depended on its own supporting interfirm networking and technology research funds provided from ministries of the development.4) central government and developed technologies Recent government policies have motivated for its industry. It had little reason to interact with local suppliers to develop their own technological the other institutes in the area (Ministry of Science capabilities and to invest in R&D. However, the and Technology, 2008). policies’focus on suppliers resulted in the It was a financial crisis at the global level and exclusion of Hyundai, which is still the most government policies at the national level that significant customer and source of information brought changes to Daedeok. Facing and knowledge for its suppliers (Lee et al., 2006). International Monetary Fund (IMF) conditions as In order to upgrade Ulsan to an innovative a result of the crisis, spin-offs were established by cluster, regional innovation capacity should be scientists and engineers previously employed at enhanced by developing local collective the research institutes in Daedeok. At the same production networks, including not only Hyundai time, the Korean government began to promote and its suppliers but also local universities and commercialization of results from government research institutes. research institutes in the 1990s (Ministry of Science and Technology, 2008). The spin-offs were supported by government policies intended

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to promote venture firms. These venture firms, could not stem the exodus of successful venture mostly R&D-oriented, developed diverse firms from Daedeok to the capital region. technology networks with research institutes in Daedeok (Lee et al., 2006; Kim et al., 2008). (3) Upgrading stage To provide a basis for venture firms to grow in (2) Transformational stage Daedeok, the key is linking local venture firms, Daedeok has been losing some of its most mostly R&D-oriented, to national and/or global successful venture firms. They grew from the producers of finished goods and services. start-up stage and listed on the KOSDAQ (Korean Coordinating technological assets of local firms Securities Dealers Automated Quotations) will increase the value and possibilities of exchange. Many have relocated to the capital national and/or global marketing. Through policy region to get easier access to various production support for global marketing and networking, facilities and services, including marketing. As a venture firms could develop an innovative result, technology networks between research cluster, which could promote the firms’ institutes and venture companies in Daedeok technologies in the global market (Kim et al., have been weakened. The central government 2008). has tried to support venture firms by encouraging Since 2000, the central government has started production facilities and services in Daedeok, to support the transformation of Daedeok to an where research and education functions were innovative cluster; the local government (City of previously dominant (Ministry of Science and Daejeon) also participated in the support. Technology, 2008). However, the policy support ‘Daedeok Innopolis’ was established to combine

Note:

Figure 2. Daedeok research cluster

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research, education, and production functions. venture firms in Daedeok, are limited to support The central government has strengthened the for exhibition participation and promotional support for Daedeok through a special law brochures (Lee et al., 2006). (Ministry of Science and Technology, 2008). The recent policy supports for Daedeok have 3) Dongdaemun fashion cluster taken two tracks. At the national level, the Agency of Daedeok Innopolis and the Small and The Dongdaemun area in Seoul is a famous Medium Business Administration have been garment cluster in Korea, where approximately supporting venture firms in the areas of R&D and 30,000 garment, textile, and accessories shops are technology development, commercialization of concentrated. Figure 3 shows the development research results, marketing, and exporting.5) At path of Dongdaemun fashion cluster by stages in the local level, the City of Daejeon has also been a multi-scalar framework. supporting venture firms by investing in R&D and production facilities for local industries, providing (1) Early stage and development services for marketing and promotion, and Dongdaemun has developed from being a fostering innovative networking. Business historical local market for necessities into a incubators, established at a number of research national hub of the clothing industry in Korea. institutes and universities in Daejeon, are another Dongdaemun has developed its unique path policy support for venture firms in Daedeok. without being dominated by global buyers. However, policies concerning commercialization Dongdaemun has accumulated its own assets as and marketing, which are an acute weakness of a center of wholesaling and retailing to supply

Note:

Figure 3. Dongdaemun fashion cluster

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the Korean domestic market. Dongdaemun has market, leading to an expansion of sales and the not been supported by national policies, which number of firms. Thus, Dongdaemun has have strongly promoted exports, since its developed, since the late 1990s, into a place for products are mainly for the domestic market (Kim original design manufacturers (ODMs) that face and Shin, 2000; Shin, 2005; Lee et al., 2006). increasing exposure to foreign buyers (Lee, Dongdaemun has grown rapidly since late 2003). 1960s with the booming domestic market for The short-term price advantage caused by the ready-made clothes and later casual clothes. The Asian financial crisis did not last, and local production system of Dongdaemun was Dongdaemun has been facing challenges to formed to provide garments that were sold in the upgrade its production system. Dongdaemun has wholesale market; local capacities for design and recently stagnated as the result of movement of production were enhanced to produce various production facilities to China and Southeast Asian fashionable clothes in a short period. countries, and its production system has been Dongdaemun consists of numerous small firms threatened by the upsurge in the number of that plan, design, produce, and sell clothes. Most Chinese garment producers.7) of products are planned and designed by the merchants, and small sewing factories are located (3) Upgrading stage close to Dongdaemun (Kim and Shin, 2000).6) However, Dongdaemun could be a fashion They can purchase textiles and accessories, such hub in the casual garment market of East Asia by as buttons, zippers, labels, and wrappings, within upgrading the sources of its competitiveness, Dongdaemun (Lee, 2003). Collocation of tightly such as design capabilities, quick delivery, and related firms enhances access to product-related flexible small-batch production. The design information, resulting in an efficient quick- capabilities have been developed as the result of delivery system. It takes on average one week in sophisticated domestic demand and the recent Dongdaemun for a new product to come to influx of creative and entrepreneurial designers market from the design stage, while other Korean into Dongdaemun. Quick delivery of products is original equipment manufacturer (OEM) one of the most significant advantages of producers take at least one and half months to Dongdaemun, based on just-in-time production produce a new item (Lee et al., 2006). by collocated firms. Small-batch production capability is another advantage of Dongdaemun (2) Transformational stage in an age of ever increasing diversification of The financial crisis threatened the national consumer demand and shorter fashion trend economy of Korea; however, the change of the cycles. To sustain and upgrade its sources of exchange rate during the Asian financial crisis competitiveness, Dongdaemun should foster its provided short-term price competitiveness to close networks between design and production Dongdaemun. Foreign buyers, mostly from East firms and upgrade the quality of the products for Asian countries including Japan, Taiwan, and export to the Asian market. Hong Kong, found Dongdaemun an attractive Dongdaemun, a traditional market that supplier for low-to-mid-priced markets, where developed without assistance from government consumer demand was increasingly diversified policies, has recently been recognized as a major and product cycles ever shorter. Export growth design center, forming a significant part of the provided Dongdaemun with a new and larger City of Seoul’s plans to develop as a historical

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and cultural center. A new Dongdaemun Design networks which have provided the basis for an Plaza and Park is under construction where the innovative cluster: strong engineer networks Dongdaemun stadium used to be. The City of between Hyundai and its local suppliers for Ulsan Seoul plans to use the building for conventions, automobile cluster; research networks between fashion shows, and design support.8) Also the research institutes and venture firms for Daedeok Seoul Fashion Center, located in Dongdaemun, research cluster; and production networks was established by the City of Seoul and Small between merchants and sewing factories for and Medium Business Administration in 2000 and Dongdaemun fashion cluster. The challenges that has been supporting the fashion industry by three clusters have recently faced are interrelated helping to market, provide information, and with a national and global scales: moving out of educate the workforce.9) It is an open question Hyundai’s R&D and production facilities to other whether these recent policies will rescue regions including foreign countries; relocation of Dongdaemun’s production system and promote the leading venture firms to the capital region; its connection with the global market. and relocation of the garment production facilities to China. In order to overcome the challenges and 5. Conclusions and discussions upgrade toward innovative clusters, diverse policies have been supporting the three clusters. A majority of the policies for Ulsan automobile This paper has examined multi-scalar factors cluster and Daedeok research cluster, both at a which have affected the generation and national level and at a local level, have development of Korean clusters, focusing on the underscored networking and collaboration government policies at a national level. between local innovators. They are different from We have criticized both the argument which the previous government policies which largely overemphasizes endogenous development from focused on physically creating new industrial local networks and the argument which complexes or science towns and emphasized overstresses connection to and the significance of large firms and research institutes without giving global players. Instead, we have argued that much attention to local innovative networks. government policies at a national level, However, they often fail to bring active exogenous and direct, should be taken into participation of the key players, including a particular account among the multi-scalar factors leading large firm or a large research institutes, affecting cluster dynamics and development. and it still remains under question when the In the Korean case, clusters have been clusters can continuously develop innovative generated and developed by interplay between networks and finally upgrade to an innovative multi-scalar factors and have directly been one without policy supports. In case of influenced by the government policies Dongdaemun, whose strengths largely depend on throughout their development paths. In the early tightly knitted local production systems that have stage, the government policies at a national level historically generated, there are concerns over the have initiated Ulsan automobile cluster and recent policy intervention which focuses on Daedeok research park while a traditional market physical infrastructure building related to fashion has self-generated Dongdaemun garment cluster. and tourism industries. The three cases have increasingly developed local Policy Implications from this research suggest

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Multi-scalar Dynamics of Cluster Development

that cluster policies, especially in Korea, should Market Information Center and the head of the Seoul enhance overall innovation support systems at a Fashion Design Center. national level and strengthen global networking 8) http://ddp.seoul.go.kr/ 9) http://www.sfc.seoul.kr/ without overemphasizing local networking. The appropriate methodological tools for the multi- scalar approach, however, are subjective and need to be refined in the future research. Future References studies should include; 1) elucidation of different Asheim, B. and Gertler, M., 2005, The geography of roles of government policies in different innovation: regional innovation systems, in development stages and in social and economic Fagerberg, J., Mowery, D., and Nelson, R.(eds.), contexts, 2) analysis of global production The Oxford Handbook of Innovation (291-317), networks at a firm-level and the influence of Oxford University Press, Oxford. government policies on them. Bathelt, H., 2003, Geographies of production: growth regimes in spatial perspective 1 - innovation, institutions and social systems, Progress in Acknowledgements Human Geography, 27(6), 763-778. Bok, D., Ko, Y., Ko, J., Kwon, O., Kim, D., Park, Y., and We are grateful to three anonymous referees Sim, S., 2003, Cluster, Samsung Economic for their valuable comments. We also thank the Research Institute, Seoul. attendants of IGU Commission on the Dynamics Bresnahan, T., Gambardella, A., and Saxenian, A., 2001, of Economic Spaces (2008) for their constructive Old economy inputs for new economy feedbacks. outcomes: cluster formation in the new Silicon Valley, Industrial and Corporate Change, 10, 835-860. Coe, N. M., Hess, M., Yeung, H. W., Dicken, P., and Notes Henderson, J., 2004, Globalizing regional 1) This includes the electronics and information technology development: a global production networks (IT) cluster in Gumi, the automobile cluster in Ulsan, the perspective, Transactions of the Institute of machinery cluster in Changwon, the parts and British Geographers, 29(4), 468-484. component cluster in Banwol-Sihwa, the parts and Cooke, P., Laurentis, C., Todtling, F., and Tripple, M., components of automobile and machinery industries in 2007, Regional Knowledge Economies: Markets, Gunsan-Janghang, the photonics industry in Gwangju, Clusters and Innovation, Edward Elgar, and the medical instrument industry in Osong (Park, Cheltenham, UK, and Northampton, MA. 2009). Depner, H. and Bathelt, H., 2005, Exporting the German 2) http://english.ulsan.go.kr/indexEn.php model: the establishment of a new automobile 3) http://www.ulsan.go.kr/ industry cluster in Shanghai, Economic 4) http://www.kicox.or.kr/ Geography, 81(1), 53-81. 5) http://www.ddinnopolis.or.kr/ Gereffi, G. and Korzeniewicz, M., 1994, Commodity 6) Most of the sewing factories are located within a 20 Chains and Global Capitalism, Praeger, minute drive from Dongdaemun. They specialize in Westport, CT. different items, such as women’s wear, casual wear, Gereffi, G., Humphrey, J., and Sturgeon, T., 2005, The children’s wear, and T-shirts, depending on their location governance of global value chains, Review of (Kim and Shin, 2000). International Political Economy, 12(1), 78-104. 7) Based on interviews with the chief of the Dongdaemun Jo, H. J., 2006, A spatial change of R&D function in auto

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Hyungjoo Kim á Jeong Hyop Lee

suppliers located in Ulsan - focused on the development, in Huang, Y. and Bocchi, A. M. concept of geographical proximity, Korean (eds.), Reshaping Economic Geography in East Journal of Sociology, 40(5), 207-232. Asia (320-337), The World Bank, Washington, Kim, H., Lee, J., Kim, W., Kim, J., and Park, H., 2008, DC. Analysis of Korean Regional Innovation Systems’ Porter, M. E., 1998, On Competition, Harvard Business Characteristics and Policy Implications, Science School Press, Boston. and Technology Policy Institute Policy Research Saxenian, A., 1994, Regional Advantage: Culture and Report 2008-19. Competition in Silicon Valley and Route 128, Kim, L., 1999, Building technological capability for Harvard University Press, Cambridge, M. A. industrialization: analytical framework and Shin, Y., 2005, Dongdaemun white paper, Retrieved from Korea’s experience, Industrial and Corporate http://dongta.com Change, 8, 111-136. Sohn, D., Kim, H., and Lee, J., 2009, Policy-driven Kim, Y. and Shin, Y., 2000, Traditional Market to university-industry linkages and innovation Fashion Network, Samsung Economic Research networks in Korea, Environment and Planning Institute, Seoul. C, 27, 647-664. Lee, J. H., 2008, Analysis of the automobile cluster in a Storper, M., 1997, The Regional World: Territorial multi-dimensional spatial framework: the case of Development in a Global Economy, Guilford Ulsan, in Tamásy, C. and Taylor, M.(eds.), Press, New York. Globalising Worlds and New Economic Yang, D., Hsu, J., and Ching, C., 2009, Revisiting the Configurations, Ashgate, Surrey and Burlington, Silicon Island? The geographically varied VT. ‘strategic coupling’ in the development of high- Lee, J., Kim, H., and Sohn, D., 2006, Korean Models and technology parks in Taiwan, Regional Studies, Strategies of Regional Innovation Systems: 43(3), 369-384. Typology and Developmental Paths, Science and Yeung, H., 2009, Situating regional development in the Technology Policy Institute Policy Research competitive dynamics of global production Report STEPI Report 2006-26. networks: an East Asian perspective, Regional Lee, J., 2003, Dongdaemun Odyssey: Collapsing Studies, 43(3), 325-351. Dongdaemun Market, Its Surviving Strategies?, C&C Communication, Seoul. Correspondence: Hyungjoo Kim, Human Resources Policy Lee, Y., 2009, Balanced development in globalizing Research Division, Science and Technology Policy regional development? Unpacking the new Institute, Specialty Construction Center 26th Fl., regional policy of South Korea, Regional Studies, Boramae-gil 44, Dongjak-gu, Seoul, 156-714, Korea (e-mail: [email protected], phone: +82-2-3284-1782) 43(3), 353-367. 교신: 김형주, 156-714, 서울시 동작구 보라매길 44 전문건설회 Maskell, P. and Malmberg, A., 2007, Myopia, knowledge 관 26층 과학기술정책연구원 과학기술인력연구단(이메 development and cluster evolution, Journal of 일: [email protected], 전화: 02-3284-1782) Economic Geography, 7, 603-618. Ministry of Science and Technology, 2008, The 40-year Recieved September 2, 2009 History of Science and Technology in Korea. Revised December 15, 2009 Park, S. O., 2009, A history of the Republic of Korea’s Accepted December 16, 2009 industrial structural transformation and spatial

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