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37257 POSTINDUSTRIAL Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Shahid Yusuf andKaoruNabeshima Shahid Yusuf EAST ASIANCITIES Innovation forGrowth POSTINDUSTRIAL EAST ASIAN CITIES POSTINDUSTRIAL EAST ASIAN CITIES Innovation for Growth SHAHID YUSUF KAORU NABESHIMA A COPUBLICATION OF STANFORD ECONOMICS AND FINANCE, AN IMPRINT OF STANFORD UNIVERSITY PRESS, AND THE WORLD BANK © 2006 The International Bank for Reconstruction and Development/The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved 123409080706 A copublication of Stanford Economics and Finance, an imprint of Stanford University Press, and the World Bank. Stanford University Press The World Bank 1450 Page Mill Road 1818 H Sreet NW Palo Alto CA 94304 Washington DC 20433 The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Executive Directors of the International Bank for Reconstruction and Development/The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judge- ment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/The World Bank encourages dissemination of its work and will normally grant permis- sion to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Of- fice of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202- 522-2422; e-mail: [email protected]. World Rights except North America North America ISBN-10: 0-8213-5622-4 ISBN-10 (soft cover): 0-8047-5673-2 ISBN-13: 978-0-8213-5622-7 ISBN-13 (soft cover) 978-0-8047-5673-0 eISBN-10: 0-8213-6649-1 ISBN-10 (hard cover): 0-8047-5672-4 eISBN-13: 978-0-8213-6649-3 ISBN-13 (hard cover): 978-0-8047-5672-3 DOI: 10.1596/978-0-8213-5622-7 Library of Congress Cataloging-in-Publication Data Postindustrial East Asian cities : innovation for growth / Shahid Yusuf, Kaoru Nabeshima. p. cm. Includes bibliographical references and index. ISBN-13: 978-0-8213-5622-7 ISBN-10: 0-8213-5622-4 ISBN-13: 978-0-8213-6649-3 (ebook) ISBN-10: 0-8213-6649-1 (ebook) 1. Cities and towns—East Asia. 2. Service industries—East Asia. 3. East Asia—Economic policy. 4. East Asia—Economic conditions—21st century. 5. Technological innovations—Economic aspects—East Asia. I. Yusuf, Shahid, 1949– II. Nabeshima, Kaoru. HT384.E18P67 2006 307.76095—dc22 2006050469 TABLE OF CONTENTS Preface xi Abbreviations xv 1 Emerging Cityscapes1 Toward a Postindustrial Urban World 5 Demand Elasticities9 Productivity Growth, Industrial Composition, and Income Distribution 11 Technology at the Root 16 Cities in the Global Marketplace 22 The Shape of Things to Come? 24 2 Megacity Profiles 29 Tokyo 29 Singapore 39 Bangkok 44 Seoul 50 Beijing 56 Shanghai 60 Conclusion 68 3 Disappearing Manufacturing 69 Population 70 Industrial Base 75 Human Capital 80 Urban Innovation System 85 Information and Communication Technology Infrastructure 90 Attractive Urban Amenities 95 Investing in Growth, Attracting Talent 98 v vi TABLE OF CONTENTS 4 Deciphering the DNA of the Biotechnology Industry 101 Biotechnology Rising 104 Bio-Singapore 110 Reading the Biotech Tea Leaves 127 5 Meet Astro Boy and Friends 137 Robot Industry 142 Anime Industry 158 A New Dawn? 166 6 Fun, Movies, and Videogames 169 The Film Industry’s Development in Korea 172 Making and Screening Movies in Seoul 174 Videogame Industry 191 The Emerging Multimedia Economy 206 7 Silk and Gems 211 Inventing Fashion 211 Gems: A City’s Best Friends? 223 A Fashionable Bangkok 230 8 Sculpting the Urban Skyline 239 Why Construction? 241 The Construction Industry in Shanghai 245 A Statistical Profile 247 Innovation in the Construction Industry 259 Current Status and Prognosis 263 9 Gold in Silicon 271 Beijing’s Silicon Credentials 274 When It All Began and How 275 Electronic Zhongguancun 282 Constructing a Metropolitan-Scale Innovative System 287 An Electronics and Information Technology Capital? 293 10 Summing Up 303 Identifying Postindustrial Cities 304 Selecting Urban Industrial Engines 306 Engine Drivers 309 References 311 Index 339 About the Authors 351 TABLE OF CONTENTS vii Figures 1.1 Trends in Consumption Share, 1950–20049 1.2 Mosaic Index 21 3.1 Population Age Pyramid for Cities 72 3.2 Health Expenditure as Share of GDP, 2003 97 5.1 Shipments of Industrial Robots, 1990–2003 144 5.2 Forecast of Robot Market in Japan, 1995–2025 147 5.3 Market Size of Animation Industry (Theater, Television, Software), 1990–2003 160 5.4 Market Structure of Animation Industry in Japan 161 7.1 Gem and Jewelry Exports, by Country, 2002 226 Tables 1.1 Urbanization Rate in East Asia2 1.2 Urbanization Rate around the World, by Region2 1.3 Megacities3 1.4 Employment Elasticity of Output in China 15 2.1 Gross Investment in Shanghai 66 3.1 City Population and Share of National Population, 2003 71 3.2 Net Migration (Foreign and Domestic) to Six Cities in East Asia, 1980–2003 74 3.3 Cities’ Share of National GDP, 1985–2003 75 3.4 Sectoral Composition of City GDP in Six Cities, 1980–2003 76 3.5 Per Capita City GDP and Per Capita National GDP, 2003 77 3.6 City GDP, 2003 77 3.7 Number of Universities in East Asian Cities, 1990–2003 85 3.8 Number of Patents Granted in the United States, by Economy of Origin, 1964–2004 86 3.9 Top Universities in East and South Asia, 2005 89 3.10 Contribution of IT Investment in GDP Per Capita Growth, 1990–2000 91 3.11 E-Readiness Ranking, 2004 and 2005 93 3.12 Number and Types of Internet Connections in Japan, 1999–2002 94 3.13 Comparison of Broadband Prices, 2004 94 3.14 Mathematics Scores from TIMSS-R, 1999 96 3.15 Science Scores from TIMSS-R, 1999 96 3.16 Number of Crimes per 100,000 Population, 2000 and 2003 98 viii TABLE OF CONTENTS 4.1 Output and Value Added of the Singapore Biomedical Industry, 1997–2004 114 4.2 Biomedical Manufacturing in Singapore, 2004 114 4.3 Biomedical Public Research Institutes in Singapore, December 2002 115 4.4 Three Phases of Clinical Trials 117 4.5 Breakdown of Patents Granted in Singapore, 1995–2004 121 4.6 Output of Science and Engineering Articles by Economy 128 5.1 Stock of Industrial Robots at Year-End, 2002–08 143 5.2 Firms Involved in Robotics, by Robot Type 154 5.3 Anime Productions of Six Largest Firms in Japan, 1997–2003 159 5.4 Location of Animation Firms in 23 Wards of Tokyo 163 6.1 Domestic Market Shares of Korean and Foreign Films, 1991–2004 173 6.2 Number of Films Produced and Imported by Korea, 1991–2004 175 6.3 Market Share of U.S. Movies in Selected Countries, 2000 175 6.4 Attendance and Number of Theaters and Screens in Korea by Year, 1991–2004 176 6.5 Korean Film Exports by Region, 2002 and 2003 178 6.6 Earnings from Korean Film Exports, 1991–2003 179 6.7 Number of Establishments and Employees in Motion Picture Production in California, 1997 and 2002 180 6.8 Establishments and Employees in the Korean Film Industry, 1993–2002 182 6.9 Occupational Categories and Required Skills in the Videogame Industry 202 7.1 Percentage of Consumers Who Would Buy a Brand If Money Were No Object 216 7.2 Total Value of Exports: Textiles, 1990–2003 218 7.3 Total Value of Exports: Clothing, 1990–2003 219 7.4 Imports of Gems, Precious Metals, and Jewelry, 1999–2002 225 7.5 Production Cost Structure of Jewelry and Accessories, 2000 225 7.6 Exports of Gems, Precious Metals, and Jewelry, 1999–2002 226 8.1 Infrastructure in Shanghai at a Glance, 1990 and 2004 246 8.2 Composition of Real Estate Firms in China, 2002 248 TABLE OF CONTENTS ix 8.3 Composition of Real Estate Employees, 2002 249 8.4 Investment by Building Types, 2002 250 8.5 Revenue of Real Estate Firms, 2002 250 8.6 China’s Export of Construction Services, 2000 251 8.7 Capital Sources for Real Estate Firms, 2002 254 8.8 Foreign Construction and Real Estate Developers in Shanghai, 1996–2000 255 8.9 Share of Engineers and Technicians in State-Owned Construction Enterprises, 1990–2003 258 8.10 Output of the Construction Industry in Shanghai and China, 1990–2003 264 9.1 Industry Distribution in Parks within Zhongguancun 283 9.2 Business Software Piracy Rates by Economy, 2000 287 9.3 Research and Development Spending in Beijing, 1999–2004 288 9.4 Breakdown of Research and Development in Beijing, 2000 289 9.5 Number of Invention Patents by Regions, 1995–2000 289 9.6 Main Indicators of Different Parks in 2003 290 PREFACE This is the sixth volume in a series of publications emerging from a study cosponsored by the government of Japan and the World Bank to examine the future sources of economic growth in East Asia.
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