Since the Porter’s (1990) popular book, "The Competitive Advantage of Nations," the industry cluster has been a mantra for many scholars as well as practitioners. In particular, despite the neoclassic economic theories that ignore the role of geogr...
Since the Porter’s (1990) popular book, "The Competitive Advantage of Nations," the industry cluster has been a mantra for many scholars as well as practitioners. In particular, despite the neoclassic economic theories that ignore the role of geography in the economic space, the geographic concentration of economic activities is the most striking empirical feature that characterizes the industry cluster. Despite such heightened interest in the industry cluster, particularly in the biomedical field, only a handful of studies paid some attention to the evolution of a successful industry cluster. To understand how to spark the engine of the biomedical cluster, one needs to probe the evolutionary process of the industry cluster. We particularly chose a recent biomedical cluster development case in Wonju, Korea. Korea is one of the leading industrialized countries in Asia, which has experienced a substantial growth in the biomedical field based on the cluster strategy.
First, this study confirms the importance of knowledge creators, such as universities and research institutes. Key players in the Wonju biomedical cluster were also local universities, their research subsidiaries and spin-off venture firms.
Second, universities and research institutes are only necessary conditions for building knowledge clusters. The presence of world-class hospitals in Baltimore (Johns Hopkins Hospital) and Cleveland (Cleveland Clinic) have not led to successful biomedical cluster development in those regions. These necessary conditions need to be combined with other factors, such as an effective government as a resource allocator and an intermediary organization as a network catalyst, for local cluster seeds to burgeon. In particular, the role of intermediary organization is uniquely strong in Wonju, Korea. Wonju MITV was at the center of the biomedical cluster development. On the other hand, contrary to a popular belief, the role of the central government was limited. This seems to suggest the reduced influence of the central government in the development process as the country moves from the developing country stage to the more advanced and mature country stage. However, unlike U.S. clusters, the cluster development process was not business- or market-driven in Korea. Reflecting the country’s unique development history and characteristics, the influence of the public domain still remains in the form of coordinated efforts between the public and private sectors in intermediary organizations. For many developing countries that adopted the cluster strategy for regional development, Wonju’s experience may offer an important implication. The immaturity of the venture capital market may hinder the development of knowledge clusters in developing countries. However, this can be overcome by active intermediary organizations and indirect government support through them. Lastly, the most interesting finding of this study was the role of star ventures. The presence of star ventures served as a catalyst for the cluster engine. Local and non-local firms’ location decisions were heavily affected by the presence of local star ventures. In other words, a positive feedback mechanism of cluster growth can be ignited with the strong presence of local star ventures. This indicates that the cluster development strategy may have to have a more comprehensive perspective. In addition to traditional strategies to support university research, entrepreneurship policies, such as how to find and nurture promising local ventures and how to help them grow, should be considered together in a comprehensive cluster strategy framework. In addition, the region may have to pay some attention to marketing as well to inform success stories of local ventures more effectively.