Abstract
Taking Southeast Asian emerging economies as an empirical case, this study explores how the reverse salients that have emerged during the transitional process may be overcome efficiently and effectively. In particular, three action-oriented case studies derived from a heuristic research approach are presented to show how Taiwan is empowering its universities and public research institutes to act as innovation niche seeders for Southeast Asian economies, thereby compensating for the weakness of their socio-technical systems (i.e. the reverse salients). Presently, the government-led policies of Southeast Asian countries are largely oriented towards incentivizing foreign multinational corporations to lead the development of domestic production networks. This strategy allows these countries to acquire the necessary resources for an economic transition in the era of digitalization, although at the expense of developing their own innovation niches. This study presents the urgency of a need for a new approach, and a new avenue for emerging countries to develop an effective and efficient governance model. The proposed model would allow external institutional mechanisms, such as universities and public research institutes, to act as critical intermediaries providing an alternative solution for the dilemmas faced by small and medium-sized enterprise-centric emerging countries. Policy implications for building sustainable socio-technical regimes in Southeast Asia’s transitional emerging countries are also discussed.
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Notes
It was Hughes (1987) who first proposed the concept of a ‘reverse salient.’ In his book explaining the evolution of a large technological system, he refers to a ‘reverse salient’ as components in the system that have fallen behind, or out of phase with, the others. He further explains that a reverse salient impedes the evolution or hampers the achievement toward the final goal of the collective system. In this study, we follow Hughes’s metaphor for describing a reverse salient as a significant difficulty faced during system transition.
While there are some successful startups that are being developed in SEA economies, for example Wongnai in Thailand (an app startup providing restaurant search service) and Go-Jek in Indonesia, it is important to note that these startups are imitating business models generated from advanced Western countries then adapting them into the local context.
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The authors would like to acknowledge that this study was funded by the Ministry of Science and Technology, Taiwan (grant number: 106–2420-H-007-008-). The authors declare that they have no conflict of interest.
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Highlights
• The article elaborates the urgent need for emerging economies to focus catch-up efforts on building indigenous innovation niches.
• The study identifies and demonstrates how reverse salients can be overcome effectively and efficiently in emerging latecomer countries.
• The authors argue that universities and public research institutes from industrialized latecomer countries, such as Taiwan, are able to help compensate for the weaknesses of the socio-technical systems in emerging economies.
• The article proposes a novel governance model for building sustainable socio-technical regimes in transitional Southeast Asian economies.
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Lo, HC., Wu, CY. & Hu, MC. Acting as an innovation niche seeder:how can the reverse salient of southeast Asian economies be overcome?. J Evol Econ 30, 1195–1217 (2020). https://doi.org/10.1007/s00191-020-00685-5
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DOI: https://doi.org/10.1007/s00191-020-00685-5