Innovation and the State

Innovation and the State: Political Choice and Strategies for Growth in Israel, Taiwan, and Ireland

Dan Breznitz
Copyright Date: 2007
Published by: Yale University Press
Pages: 288
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  • Book Info
    Innovation and the State
    Book Description:

    The 1990s brought surprising industrial development in emerging economies around the globe: firms in countries not previously known for their high-technology industries moved to the forefront in new Information Technologies (IT) by using different business models and carving out unique positions in the global IT production networks. In this book Dan Breznitz asks why economies of different countries develop in different ways, and his answer relies on his exhaustive research into the comparative experiences of Israel, Taiwan, and Ireland-states that made different choices to nurture the growth of their IT industries.

    The role of the state in economic development has changed, Breznitz concludes, but it has by no means disappeared. He offers a new way of thinking about state-led rapid-innovation-based industrial development that takes into account the ways production and innovation are now conducted globally. And he offers specific guidelines to help states make advantageous decisions about research and development, relationships with foreign firms and investors, and other critical issues.

    eISBN: 978-0-300-15340-8
    Subjects: Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. List of Illustrations
    (pp. ix-x)
  4. Acknowledgments
    (pp. xi-xiv)
  5. List of Abbreviations
    (pp. xv-xx)
  6. Chapter 1 Plurality, Choice, and the Politics of Industrial Innovation
    (pp. 1-40)

    This book is about choice. Its main argument is that, contrary to what we are led to believe, the current processes of intensified globalization give emerging economies a larger number of economic-development alternatives than they have had since World War II. This is especially true, I argue, in the case of rapid innovation–based (RIB) industries. A general truism today is that both the onslaught of international economic forces and the fragmentation of production limit the power of states to set unique courses of successful economic growth. And yet in this book I argue that these same conditions have given...

  7. Chapter 2 The Development of the IT Industry in Israel: Maximization of R&D as an Industrial Policy
    (pp. 41-96)

    Israel’s IT industry is an impressive success story. In less than twenty years, the country has emerged as a key player in global IT technology, with Israeli companies pioneering many hardware and software market niches, such as voice over Internet protocol (VoIP), encryption, printed circuit board inspection, antiviral protection, digital printing, and firewalls. This small country of only six million has, after the United States and Canada, the highest number of IT companies listed on NASDAQ. In 2000 Israeli IT industrial export revenues exceeded $13 billion and accounted for more than 71 percent of all industrial exports; the IT industry...

  8. Chapter 3 The Development of the IT Industry in Taiwan: Public Research Institutions as Growth Impetus?
    (pp. 97-145)

    Even within the world’s most distinguished group of successful emerging economies, the East Asian Newly Industrialized Countries (NICs), Taiwan has one of the most inspiring stories. Taiwan is the only society in the region that has, in many critical aspects, closed the gap in innovational activities with the leading Western industrial nations and with Japan.¹ Taiwan has also developed a vibrant industrial system of indigenous new small and medium-sized enterprises, a system that is not dominated by a few huge conglomerates or subsidiaries of foreign MNCs (Wu 2001, 2005). Taiwanese companies have become a prominent force in the IT industry’s...

  9. Chapter 4 A Misunderstood “Miracle”: The State and the Growth of the IT Industry in Ireland
    (pp. 146-189)

    If one nation’s economic performance in the 1990s has inspired a revolution in international perception, that nation is Ireland. As late as 1995 the common perception of Ireland’s economic performance was one of a continuous failure, which doomed Ireland to be the perpetual basketcase of Europe (Guiomard 1995).¹ Less than four years later, sick Ireland seemed to have become the roaring Celtic Tiger (Breathnach 1998, MacSharry and White 2001, O’Hearn 1998, Sweeny 1999). Such Irish software companies as Iona in middleware, Smartforce and Riverdeep in education, or Trintech and Baltimore in data security not only achieved global success but also...

  10. Conclusion: Comparing Choices and Consequences in Rapid Innovation–Based Industrialization
    (pp. 190-210)

    This book has been motivated by two puzzles. First, what is the role of the state in the development of rapid innovation–based industries in less-developed economies, under the conditions of intensified globalization and fragmented production? Second, does the IT industry’s very different development paths—in particular in Israel, Ireland, and Taiwan—suggest that multiple developmental choices are available to emerging economies?

    The study shows that emerging economies do have the ability to craft and select different paths in nurturing the growth of successful rapid innovation–based industries. Thus the argument of this book: that real choices for economic development...

  11. Notes
    (pp. 211-234)
  12. References
    (pp. 235-250)
  13. Index
    (pp. 251-262)