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New Industries in Southeast Asia’s Late Industrialization: Evolution versus Creation - The Automation Industry in Penang (Malaysia) considered

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  • Leo van Grunsven

Abstract

Discourse on industry development and policy practice in late industrialization countries in East and Southeast Asia has predominantly tended to relate the emergence of new industries to ‘creation’ by the state and thereby to the role of state intervention or involvement in industrial growth and restructuring. On the other hand the role and position of (local) entrepreneurship in the genesis of new industries has been rather neglected, as little room was perceived for ‘autonomous’ development. Southeast Asian late industrialization is currently being confronted with the limits of development and expansion of specific (FDI-driven) export industries and thus with the necessity to devise new growth paths in industry (on the basis of high tech industries). This compels a reconsideration of policy practice and perceptions of modes of industry development on which it is based. In this paper we argue that a state-orchestrated ‘creation’ of priority industries is not the only possible route to new high tech industries in Southeast Asian late industrialization. This emanates from an analysis - based on field research - of the emergence and development of a recent growth industry in Malaysia, i.e. the manufacturing of automated equipment (or, automation industry) and its constituent firms in the Penang region. The analysis demonstrates that the mode of development of this industry conforms rather well to a number of notions from evolutionary economics on firm genesis and development in new industries. This suggests that successful industrial policies can be based on supporting an evolutionary ‘birth and development’ path, i.e. industry genesis and evolution as a more or less autonomous incremental process of the development of firms and their capabilities.

Suggested Citation

  • Leo van Grunsven, 2006. "New Industries in Southeast Asia’s Late Industrialization: Evolution versus Creation - The Automation Industry in Penang (Malaysia) considered," Papers in Evolutionary Economic Geography (PEEG) 0611, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2006.
    • Handle: RePEc:egu:wpaper:0611
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    File URL: http://econ.geo.uu.nl/peeg/peeg0611.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    industrial policy; late industrialization; automation industry; Malaysia; co-evolution; spin-out; diversification;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L64 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Machinery; Business Equipment; Armaments
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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