Transformations  in
Business & Economics

INDUSTRIAL POLICY AND FINANCING OF INNOVATION FOR LOCAL DEVELOPMENT: INSIGHTS FROM THE HSINCHU SCIENCE PARK, TAIWAN⁷
Andrea Gatto, Vincenzo Rusciano

ABSTRACT: Taiwan technology industrial clusters have emerged as good practices of spatial agglomeration in the innovation industry. A piece of outstanding evidence is the Hsinchu Science Park (HSP), the first science park established in Taiwan. This work discusses the case study of the HSP, aiming to revitalize the political economy discourse pivoting around Taiwan's industrial policies in the hi-tech sector and financing of innovation. To this end, a field visit to the Park and meetings with key stakeholders were conducted. Primary data were combined with secondary sources review to frame the analyzed practice within the East Asian development patterns, emphasizing selected items - i.e. the role of the State, the underlying developmental political economy, economic history and empirical discourse. Key features of the HSP emerge from the interviews. The park plays an enduring role in economic growth and local industrial facilitation, fostering research, innovation and socio-economic development. The Taiwanese lesson offers important solutions for scholars, development policies and industy for both the Global South and North to foster entrepreneurship boosting, financing of innovation and industrial conversion and creation.

KEYWORDS:  local development, financing of innovation, industrial policy, development theory, development policy, political economy, economic history, Hsinchu Science Park, Taiwan.

JEL classification:  L86, N75, O14, O25

⁷Acknowledgments:  Andrea Gatto is thankful to Jen-te Wang, Wang Jenn-Hwan and Kelly Barton Olds for their recommendations that improved the paper. He wishes to acknowledge the National Science Council of Taiwan for the scientific support received in drafting the research. The research took place at the National Taiwan University and the National Cheng-chi University, throughout field visits at the Hsinchu Science Park and the Industrial Technology Research Institute, Taiwan.Conflict of interest statement. On behalf of all authors, the corresponding author states that there is no conflict of interest.