Catching-up national innovations systems (NIS) in China and post-catching-up NIS in Korea and Taiwan: verifying the detour hypothesis and policy implications

Abstract

This study addresses the relationship between national innovation systems (NIS) and economic catch-up by latecomer economies, such as China, South Korea, and Taiwan. Contemporary China is found to also specialize in short cycle technologies, similar to Korea or Taiwan in the mid-1980s and 1990s, featuring opposite attributes from mature NIS. By contrast, Korea and Taiwan are moving away from short-cycle technologies into long cycle technologies-based sectors, and their NIS are becoming similar to those of advanced or mature NIS. Thus, this study verifies the so-called 'detour' hypothesis that a successful catching-up economy can follow a technological detour of first specializing in short cycle sectors and only later turning into more challenging or long cycle technology-based sectors. In addition, the linkage from such detour to economic growth performance is verified, confirming a positive relationship between moving into short cycle technologies and economic growth in China, and between going into long cycle technologies and economic growth in Korea and Taiwan for the post-catch-up stages or since the 2000s.