Managing innovation for economic development in greater China: The origins of Hsinchu and Zhongguancun

This paper reports on the preliminary findings from a three-year research project exploring the growth of information technology (IT) clusters in Hsinchu, Taiwan and Zhongguancun, China. Drawing on the history of the origins of IT clusters in these two cities, we examine the formation of clusters to understand the mechanisms and factors, such as technological change and institutional reform, which influenced the formation of these clusters. We discuss the issues concerning the process of managing innovation, the conditions that trigger and/or maintain innovation, and the source of technology for innovation. We conclude that successful innovation in origins of IT clusters is a result of the interplay between the state, the market, and the NGOs.