By Sonobe Tetsushi Otsuka Keijiro

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Extra resources for Cluster-Based Industrial Development: An East Asian Model

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18 Overall, the township-level analysis points to the importance of cluster-based industrialization in East Asia, particularly in the less advanced stages of economic development. Thus, the detailed comparative case studies of industrial clusters in these three countries seem warranted. According to the theory of product cycle by Vernon (1966), the development of new products and production processes in high-income countries requires scientists, researchers, engineers, and skilled workers, who are 34 Cluster-Based Industrial Development highly educated.

New enterprises are located near each other and, consequently, an industrial cluster is formed. With materials and intermediate inputs being readily available at the marketplace and the sale of final products being efficiently handled by specialized merchants at another marketplace, it is now possible even for farmers and others who have no experience in manufacturing to produce the lowquality standard products. 1 Illustrated changes in quantity of production (Q) and productivity (T) in the course of industrial development quantity of production of the industry increase rapidly.

We did not encounter the dominance of global value chains in our case studies in East Asia, presumably because they penetrate into selected segments of the economy. Second, in order to attract global buyers, the technology levels of local producers must be reasonably high, so that with the additional instructions they are capable of exporting their products to markets in advanced economies, where high-quality products are demanded, as was the case in the Taiwanese PC industry (Kishimoto, 2004).

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