Form HE(S→O)
GSAPS THE SUMMARY OF DOCTORAL THESIS
Re-Contextualization of Indigenous Technology-Driven Industrial Catch-Up Strategy:
A Comparative Approach on Seven Countries’ Level of Urgency
4016S301-2 PURBANTINA, Adiasri Putri Chief Advisor: Assoc. Prof. NABESHIMA Kaoru
Keywords: industrial catch-up, technology upgrading, systemic vulnerability, path-dependence
Introduction and Research Problem
I explore different industrial development trajectories among latecomers using a historical approach to explain the causal relationship between government behavior, particularly the political elites, and the industrial catch-up pursuit. Here, industrial catch-up pursuit refers to the effort to increase indigenous technological capabilities, through foreign technological learning and development, to support indigenous manufacturing firms’ upgrading. Initially, this strategy can be found within the developmental states’ industrial policy (e.g.
Japan, Taiwan, South Korea). Currently, under the global economic system, this also has become the ideal mechanism of the national innovation system, manifested as Science, Technology, and Innovation Policy. I do not seek to simply discuss institutional arrangement variants (e.g. regime type) or measuring predatory behavior within the government (e.g. corruption, political rents).
Instead, I look into the political-historical foundation behind political elites’
choices of industrial development strategy at their initial stage of national economic planning.
While there are abundant studies on how to replicate the institutional arrangements found in the Northeast Asian developmental states, less attention has been given to obtaining a better understanding of what provoked efficient institutional arrangements as a precondition for industrial catch-up in the first place. Most of the comparative studies on different development trajectories among latecomers often simply compare the differences in the institutional arrangement between the high-growth developmental states and less successful latecomers. They tend to focus on measuring the state’s predatory level and pay a lack of attention to the historical context or environment that gave birth to such an “effective” institutional arrangement. In this regard, the main unit of analysis of this Ph.D. dissertation is the political elites’ behavior at the initial stage of national economic planning and how they develop through time. Through a comparative approach, I seek to answer: “What was the political and historical context that motivate the ruling political elites (government) to prioritize or to not prioritize an indigenous technology-driven industrial catch-up strategy?”
Method of Comparison: Level of Urgency
Among various existing literature, systemic vulnerability, proposed by Doner et. al., (2005), provides the most comprehensive analysis on the determinant factors that heavily influence political elites’ decision to prioritize industrial catch-up pursuit. While we can see the developmental states’
successful industrial catch-up as the best possible trajectories for the latecomers, I seek to avoid using systemic vulnerability as the “idealistic measurement” to evaluate other trajectories. Instead, I borrow the authors’ choice of historical context to construct a method of comparison, which are global (external) context and domestic context. A specific context within a specific time horizon in latecomers led to an “industrial catch-up” trajectory while another context occurred in other countries within different time led to a “stagnated” trajectory because it provoked the political elites to choose other growth strategy alternative, which might not be as sustained as industrial catch-up.
Level of Urgency Global-External Circumstances
Domestic Circumstances
High conducive conducive
Low unconducive unconducive
Medium mixed mixed
Based on the interaction difference between global-external circumstances and domestic circumstances, I categorize the seven cases into three categories of urgency level. Based on an evaluation of historical events faced by the political elites in each country, I create three types of circumstances: conducive, unconducive, and mixed. Conduciveness refers to whether the historical events provoke an indigenous technology-driven industrial catch-up strategy pursuit.
Therefore, unconducive means that the events provoke a different strategy to gain revenue.
The Cases
The cases of Japan and South Korea exhibit a high level of urgency to pursue an indigenous technology-driven industrial catch-up in the critical juncture period because an indigenous technology-driven industrial catch-up strategy is their national survival strategy in the face of a systemic vulnerability (i.e. the presence of external threat and a constrained easy revenue). Their domestic dynamics (i.e. stable political system and cooperative socio-economic structure) also acted as conducive circumstances to this strategy. I selected the Meiji Restoration period in 1868 and the Park Chung-Hee’s Yushin Restoration, as the critical juncture period for both Japan and South Korea respectively. These were the early periods in their state formation when the political elites in Japan and South Korea decided to embark on an industrial catch-up strategy through indigenous technology development.
Argentina and Brazil are the representation of Latin American countries with a low level of urgency to pursue industrial catch-up. Their histories have
been intertwined with the dynamics in Europe (e.g. the Industrial Revolution, the Napoleonic Wars, the First Globalization). The global-external circumstances led to the expansion of the natural resource-based export-oriented sector in Argentina and Brazil. It provided political elites with a relatively easy revenue instead of pursuing industrial catch-up such as Meiji Japan. The colonial period gave birth to the political actors, including the military power, and the socio- economic structure. All of this contributed to the lack of unity and unstable domestic circumstances. Thus, in sum, the low level of urgency to pursue indigenous technology-driven industrial catch-up occurred due to a combination between unfavorable domestic dynamics and conducive global-external circumstances, which provoked them to prioritize short-term economic development strategy (e.g. extractive economic sector, agricultural sector) that would not hurt the popular sector or risking an occurrence of mass resistance.
Malaysia, Thailand, and Indonesia are the representation of Southeast Asian countries that exhibit a medium level of urgency. Their political elites initially were exposed with a weaker level of urgency to boost up industrial growth due to abundant natural resources, conducive external economic incentives from commodity export. In Malaysia and Indonesia, this also was met with unstable domestic politics as a new state. The political elites in these countries started to see the need to support industrial growth to boost up economic growth due to some key events and/or opportunities at both the global and domestic levels.
Nevertheless, these events are not sufficient enough to motivate the political elites to prioritize indigenous technology-driven manufacturing upgrading within their STI policy because: 1) it risks the popular sector as the potential looser; 2) the strong continuing influences of natural-resource oligarchs; 3) the presence of alternative strategy on industrial growth (i.e., MNCs-driven manufacturing sector) particularly in this Southeast Asia region who benefits from the Northeast Asian expansion of global production network.
From the seven-country cases, I look further into the case of Indonesia to observe how economic nationalism discourse can be an observable mechanism to evaluate how the policy preference over natural resource-centric economic strategy continues to be maintained and even extended into the national Science, Technology, and Innovation (STI) policy. Under the shadow of the survival of natural-resource oligarchies, economic nationalism discourse provides a policy legitimacy for the policymakers under the democratic electoral system in Indonesia. I borrow Schimdt (2008) discursive institutionalism approach to observe the strong presence of economic nationalism discourse within the national STI policy in Indonesia.
Conclusion
The different level of urgency is not intended as a theory that predicts a country’s future trajectory. It is the result of the analysis of the seven countries’
history. Countries have developed differently because they were exposed to different environments, from outside and inside. The same logic that we often use to evaluate human behavior. This Ph.D. dissertation is not intended to provide answers to policymakers by presenting a set of policy recommendations.
It is intended to analyze the policymakers and to provoke a scholarly discussion on whether or not a policy recommendation, constructed upon the ‘successful’ or
‘ideal’ case, can be replicated in another country? My answer is probably not. A policy is the outcome of policymakers’ choice, which was taken under the presence of specific environments. If we eliminate the context, we eliminate the initial conditions that contributed to its ‘success’. Using the case of industrial catch-up, this PhD research shows that the key initial conditions are not those that can simply be recreated or replicated (e.g. government spending on R&D, access to international market, access to foreign technology, presence of FDI, democratic electoral system), but they are those that occur beyond the control of political elites (e.g. the presence of external threat, the lack of natural resources, and other constraining factors).
Key References
Doner, R. F., Ritchie, B. K. & Slater, D., 2005. Systemic Vulnerability and the Origins of Developmental State: Northeast and Southeast Asia in Comparative Perspective.
International Organization, Volume 59, pp. 327-361.
Collier, R. B. & Mazzuca, S., 2006. Does History Repeat?. In: R. E. Goodin & C. Tilly, eds.
The Oxford Handbook of Contextual Political Analysis. New York: Oxford University Press Inc., pp. 472-489.
UNIDO, 2015. The Role of Technology and Innovation in Inclusive and Sustainable Industrial Development, Vienna: United Nations Industrial Development Organization.
Schmidt, V. A., 2008. Discursive Institutionalism: The Explanatory Power of Ideas and Discourse. Annual Review of Political Science, 11(1), pp. 303-326.
