Sources of Capital Goods Innovation

This book explores how and by what paths Japan and Korea have built a competitive and innovative capital goods sector. The author examines the role of user firms in shaping the innovation dynamics of capital goods. He theorizes that user firms of capital goods create a basis for specialized suppliers of these goods to embark on a dynamic path to innovation through various activities, and that such user activities have a positive impact on the competence building of not only users themselves but also specialized suppliers. Empirical findings from the Japanese and Korean cases reaffirm the significance of vertical user-producer interaction in promoting geographically localised innovation, as documented historically by Rosenberg, and for more recent times by scholars such as Lundavall; and they are also consistent with Porter's account of the significance of home country background to the establishment of competitiveness in international markets.