Book Review (Yeung 2010)

Cover of Globalizing Regional Development in East Asia: Production Networks, Clusters and Entrepreneurship

Globalizing Regional Development in East Asia: Production Networks, Clusters and Entrepreneurship

Henry Wei-Chung Yeung (Editor)

A special issue of Regional Studies, the Regional Studies Association, Routledge, London, (2010) 208 pages $125

Reviewed by Allison Wylde, London Metropolitan University Business School (04 March 2011)

Revealing the mechanisms of regional development in the context of the East Asian regions of Northeast and Southeast Asia; this book presents original ideas that have a wide application. Ideas include: the possibility of a time and “a window of opportunity for development (p.45); issues of capacity and the possibility of catch up in regions; the notion of region-state-dynamics; that politics can be de-coupled from economics; and, finally that history, class and culture matter.  An excellent resource, this book is suitable for a range of audiences from graduate to experienced researcher; indeed policy makers would do well to take note. The East Asian focus means the book is a useful resource for regional experts as well as those seeking a comparative analysis. Many chapters have a political and development slant which widens the readership appeal to international-development and political-science researchers.

The editor Henry Wei-Chung Yeung highlights vital ingredients which contribute to the uniqueness of the East Asian experience, the simultaneous-presence of domestic firms with developmental (often national) state institutions and global lead firms and their production networks (p.1). Important features of regional development include the various forms of regional devolution and the extra-regional processes, both are largely ignored by previous studies which concentrate on endogenous processes. Yeung makes a key contribution in Chapter 2 by calling for a more nuanced approach to decision-making by policy-makers: through a comprehensive understanding of the trans-regional dynamics amongst the local-regional and nation-state, the global lead firm and the Global Production Networks (GPNs) and finally the strategic-coupling relationships between firms (paraphrased p.23). The chapter unravels the complex coupling interactions and the subtly different forms found across East Asia, resulting from these region-state-dynamics.

In Chapter 3, Daniel You-Ran Yang, Jinn-Yuh Huu and Chia-Ho Ching present a new framework to study the science- park driven ‘siliconized’ regional development” in three regions of Taiwan, Hsinchu, Taichung and Tainin (p.34). The regions are studied using an actor-practice-sensitive framework which triangulates the economic competence of the firms, with the state’s intervention and the trans-border community along with the mesh of regional assets and GPNs (p.35). Different patterns of development are identified: Hsinchu has a state-development actor and links with a cross-border community; while Taichung is based on firm-centred transfer from Japan; and finally Tainin reveals the phenomena of endogenous growth. A complex picture emerges ‘siliconized’ development could be driven by state-development-policy or through endogenous growth of local-firms. Finally, the authors say, at any point in time firms and regions are not simple “black boxes” (cf. Fujita et al. 1999), they have a distinct capacity and ability to be sensitive to and possibly benefit from a “window of opportunity” (p.45).

In Chapter 4, Chun Yang used firm-level case studies to reveal well-regulated local institutional initiatives and facilitated strategic-coupling to drive the resurgence of the Yangtze River Delta (YRD) as the “dragonhead of China’s economy since the 1990s” (p.53). Further that this approach has resulted in Taiwanese firms situated in the southern Pearl River Delta (PRD) either keeping their original base and establishing a new base in the north or closing their original plant and moving north. The result is significant Taiwanese inward-investment leveraged into the YRD region which is now able to complete with the trans-local and global competition (paraphrased p.67). This is an example of a carefully-orchestrated and fine-tuned approach to handling and promoting development.

In Chapter 5, by Suksawat SajarattanochoteandJessie Poon say that Thailand, in contrast to other chapters in this book, is a developing country where “human capital and technological capacity are low” (p.71). Government policy has targeted specific industries and encouraged the relocation of FDI and the foreign establishment of SMEs to regions neighbouring provincial provinces to the main Business Metropolitan Area. The theory tested was that industry sector and age were positively associated with knowledge-spillovers while industry size was inversely associated.  City regions were found to dominate spillovers due to the presence of the MNEs and more competent local Thai firms. In other words lock-in was found in the city-region at the expense of the outer regions, compounded by agglomeration and knowledge concentration. Finally the authors highlight an important direction for future research and gap in the literature – the question of catch up by the regions.

Chapter 6 follows on from the previous chapter and focuses on the household and community level of low-tech low-human capital. Philip Kelly focuses on households and communities which he calls them the spaces of reproduction. A longitudinal study between 1995 and 2006 examined the livelihoods and demography of individuals in a single village and the impacts of migratory workers returning home. The effects included entanglements “with the politics and embeddedness of clusters,” (paraphrased p.97) which the author argues are remittances which result in class mobility. Finally, the author concludes that since these spaces impact on and are impacted on by the GPNs across several dimensions they should be included in the GP networks.

In Chapter 7, Yong-Sook Lee argues that the Korean government’s “new regionalism” is a limited and dualistic endogenous-exogenous policy which does not fully address the “issues arising from globalizing regional development” (p.101). The author proposes a “multi-scalar governance” case study approach to unravel the efficacy of the policy in achieving a harmonious global-local-national nexus. The author says it is doubtful if a dualistic policy can succeed: an exogenous spatially-selective globalization for the capital region and an endogenous-strategy for the non-capital region (paraphrased p.111). Finally the author says that the new policy-push towards FDI will exacerbate the need to resolve the global-local-national nexus.

George Lin, in Chapter 8, studies the Guangdong Province in Southern China, which geographically distant from the “core of the nation” has had flexibility in its development (p.122). Recent policies have seen increased relaxation and liberalisation with foreign direct investment and a thriving exports market.  However, at the same time, nearly 60% of agricultural land has been lost alongside increases in industrialisation and urbanisation. The recent increases in regional inequality are the author suggests “as a direct outcome of the practice of scaling-up regional development” (p.128), a phenomenon which, is due to the political origins of regional development, and largely ignored in the literature. Further that the “imperative of original capital accumulation” (p.129) is based on the use of land as the main source of the capital is in sharp contrast with the west where technological innovation and flexible labour have been the source. Finally the author uncovers a three-way strategic coupling, foreign investment, a local-regional entrepreneurial-government and a state-driven institutional and political framework.

Dennis Wei, Yuqi Lu, andWen Chen in Chapter 9 follow on from the previous chapter and focus on the Suzhou Industrial Park on the outskirts of Shanghai, a joint venture between the Government of Singapore and the Central Government of China. The region is dominated by Trans-National corporations and external organizations and a strong research base is missing: not a neo-marshallian district instead, a satellite district. The authors make an interesting point saying the unique geography of the park at the mouth of the Yangtze delta with ease of access to international-shipping lanes makes it unlikely that this model could be exported to other regions. In addition, and building on the previous chapter, the authors say the presence of a pro-business local government means the park is ahead of others.  Finally they propose a third-way to address concerns raised in the previous chapter, the loss of agricultural land by “integrating globalizing regional-development and domesticating globalization” (p.149).

In Chapter 10, Josh Lepawsky concentrates on the formation of the Multi-Media Super Corridor (MSC) in Malaysia to examine the political role of clusters.  The author also points to the interplay through strategic-coupling to global production networks alongside the fine-grained activities in clusters mediated through buzz and face to face knowledge interactions. A mixed methodology is used to examine published economic-industry data and conducts interviews with individuals in MSC firms. Findings point to development policy being used to mediate race and social struggles. Finally the author argues that the development policy is portrayed as purely economic, which effectively decouples the political-debate and renders the policy “non-ideological” (p.165).

In the final chapter Yuko Aoyama, examines information technology entrepreneurship in two differing regions. The first Kyoto a cultural capital and tourist destination is home to the largest numbers of old established-family businesses in Japan. The second region Hamamatsu is in contrast, a “Technopoliis”,  a manufacturing centre recognised for its continuous evolution through entrepreneurship and the redeployment of indigenous skills, for example, from shipbuilding, looms and musical instruments to automotive and electronics (p.173-174). Interviews were used to examine the entrepreneurship experiences of firms’. Kyoto was found to be inward-looking and secretive with elites from the old industries still in dominant social positions and local university students attracted away by outside corporations. Hamamatsu in contrast was found to have had an open-social-structure dating back hundreds of years, with an accepting and open new ideas approach augmented by large numbers of outsiders. These differences show that the two regions have been shaped by their history and cultural norms; indeed “history matters” (David 1985).

Overall this is an interesting book; one improvement could be to make the images clearer.  A possible solution could be to include links to the images on the companion website enabling readers to access full-colour enlargeable versions. This would have the dual benefit of helping readers engage with the research as well as find out about forthcoming works.

References

David P. (1985) “Clio and the Economics of QWERTY”, American Economic Review, 75 (2) 332-7

Fujita, M., Krugman, P. and Venables, A.J. (1999) The Spatial Economy, MIT Press, Cambridge, MA.

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