Can Newly Industrializing Economies Catch Up in the Science-Based Industries? A Study of the Korean Biotechnology Sector

Abstract

This paper analyzes the Korean biotechnology sector with an analytical framework of National Innovation System (NIS). We examine whether newly industrializing economies (NIEs) can catch up with advanced economies in newly-emerging, knowledge-intensive industries such as biotechnology. We demonstrate that Korea is emerging as a key player in the global biotechnology scene in terms of R&D activities, catching up with other advanced countries, such as Japan, and keeping pace with regional competitors like Taiwan, Singapore and China. While the substantial increase in innovation capabilities lends support to the plausibility of the catching-up view, we also find that improvements and adaptations need to be made in transferring knowledge effectively from public to private sector and in commercializing biotechnology with the institutional support of private funding. Our study highlights the mechanisms by which collective competence of managing knowledge creation and diffusion is facilitated in a developing economy.