Evolution of innovation regime and industrial cluster in developing countries: A case study of Shaoxing, China

The industrial clusters and the innovation regime of the developing countries tend to evolve collaboratively. This paper probes into the specific patterns of the technological innovation regime of the developing countries. Features of the market-oriented stage and the knowledge-based stage of innovation are illustrated. At the first stage of the market-oriented innovation, clusters undergo a rapid and radical expansion and their technology cumulativeness level is increased. Restructuring happens at the knowledge-oriented innovation stage, driving the clusters to upgrade from production to higher value-added sectors in the industrial chain and leading to more promising developmental outcomes. By analyzing the interactions between market expansion and knowledge accumulation of Shaoxing, a leading textile cluster in China, this paper suggests the construction of a supportive environment which facilitates the sustainable improvement in the innovation capability and the economic performance of industrial clusters in the developing countries.