Innovation and Networks in Industrial Clusters: Empirical Results from Three Large Cities - Technopolis: Best Practices for Science and Technology Cities - page 261

was founded in 1960. The majority of the small and medium-sized businesses in the
mechanical parts and materials of Busan have long history, while companies in the
photonics industry of Gwangju and ICT industry of Daejeon are newly founded.

3.2 Innovation Characteristics and Innovation Types

Innovation plays a crucial role in the performance of the enterprise. How inno-
vative are the companies in the surveyed regional strategic industries? In accor-
dance with the survey purpose, the innovative enterprise is defined as that which
has introduced technologically new products or processes over the past 3 years.
In the study on the 180 companies located in the three metropolitan cities in
Korea, the proportion of the innovative enterprises is very high in Gwangju and
Daejeon while in Busan, that of innovative firms is only 40 %. Table 2 shows that
there are significant differences in the proportion of innovative firms by regional
strategic industries.
The innovation types introduced in early 2000s were either product innovations
(88 %) or process innovations (12 %). The proportion of product innovation
turned out to be high in Gwangju and Daejeon while in Busan that of process
innovation appeared high. The mechanical parts and materials industry of Busan is
stressing process innovation with some 40 % of the companies introducing
innovation. In the mechanical parts and materials industry of Busan, process
innovation is considered relatively more important in regions where mature
industries are common. In the ICT industry of Daejeon and photonics industry of
Gwangju, product innovation is more frequent than process innovation while in the
mechanical parts and materials industry of Busan, product innovation is compar-
atively less frequent.
The OECD definition of innovation has three levels in terms of ''new'': new to
the world, new to a nation, and new to the firm. ''New'' is necessary but not
sufficient for innovation. For a product or process to be innovative, it must have a

Table 2 Characteristics of innovations (percentages)
Characteristics Busan Gwangju Daejeon Total sample

Experience of innovation (N = 60) (N = 60) (N = 60) (N = 180)

Yes 25(41.7) 53(88.3) 57(95.0) 135(75.0)

No 35(58.3) 7(11.7) 3(5.0) 45(25.0)

Type of innovation (N = 25) (N = 53) (N = 57) (N = 135)

Product 15(60.0) 49(92.4) 55(96.5) 119(88.2)

Process 10(40.0) 4(7.6) 2(3.5) 16(11.8)

Novelty of innovation (N = 25) (N = 53) (N = 57) (N = 135)

New to firm 5(20.0) 8(15.1) 8(14.0) 21(15.6)

New to the nation 15(60.0) 29(54.7) 41(71.9) 85(63.0)

New to the world 5(20.0) 16(30.2) 8(14.0) 29(21.5)

Source: (Kwon et al. 2005 ) survey results