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Innovation and Networks in Industrial
Clusters: Empirical Results from Three
Large Cities
Young Sub Kwon
Abstract This chapter examines innovation activities and innovative networks in
the strategic industries of three metropolitan cities of Korea, and draws policy
implications for reinforcing clustering and networking. It provides the results of a
survey of 180 businesses in Busan, Gwangju, and Daejeon.
1 Introduction
Innovation and knowledge creation are recognized as the engine for national and
regional growth and development in the twenty first century. However, with the
progress of globalization and industrial restructuring, many regions in industrial-
ized countries have been faced with challenges over the past several years. These
challenges have been comparatively tough in large cities of the countries which
have been successfully industrialized. In recent years, these regions have been
experiencing various kinds of structural readjustment, there is an urgent need to
restructure the industries, and develop high value added new products, and new
processes in these regions.
Innovation has a crucial influence on regional growth as well as the growth of
enterprises. Accordingly, not only enterprises but also regional and central gov-
ernments have interest in factors that influence innovation. In creating innovation,
the innovative behavior of enterprises and institutional framework of regions are
important. This is because the innovative results of enterprises depend on the
innovative corporate behavior, or R&D activities, and innovative environment of the
region that supports them. In regions where the regional innovative system functions
in a systematic way, the innovation between enterprises and knowledge suppliers
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