Question

Define the relationship between technology and institution industries

Answer 1

The Relationship between Technology Industrial Cluster and
Innovation in Taiwan
Hsieh-Sheng Chen*
Department of Logistics Management, Shu-Te University, Taiwan
Received 23 April 2009; Received in revised form 26 February 2010; Accepted 4 June 2010
Abstract
Many economic activities, especially research and development, still rely on face-to-face
communication and the geographical linkages among industries are beneficial to technology
sharing and in decreasing unnecessary expenditures. It is observable that the salient role of
research and development in today’s knowledge economy heavily relies on geographical
linkages, the localization of learning networks, and face-to-face communication. Hence, these
predicaments make the clustering of high-tech industries plausible and are in fact popularly
practiced all over the world. Specifically, this research discusses the effects of the clustering
in the technology industry and its innovative variants in Taiwan. It is hypothesized that
variants in Taiwan’s technology industry and innovation are interfacing with each other
instead of working independently. The relationship between the clustering of Taiwan’s
technology industry and innovation is investigated through 3SLS. The results show that
clustering of the technology industry and innovative production are positively correlated. That
is to say, clustering of the technology industry is beneficial to the industry itself and moreover
is also beneficial to the development of innovative practices in the industry. As a result,
clustering in Taiwan’s technology industry is observably speeding up.
Keywords: Technology industry, industrial cluster, innovation, face-to-face communication
1. Introduction
Innovation fuels economic growth. The definitions researches use in understanding
innovation often vary simply because the scholars’ academic and research background and
purpose for undertaking research work likewise varies. Nevertheless, in generalizing the
views of most of the scholars, we find that innovation is a kind of learning process and its
consequent result. In such a process, new knowledge is generated through interactive learning
among the various creative mechanisms. Also, through the interactions, knowledge in the
originally different fields might lead to the development of new learning interactive processes
and its resulting new applications (Gregersen and Johnson, 1996).
The distribution of innovative activities in terms of geographical space is not even. This is
being experienced by the Silicon Valley, Route 128, Research Triangle Park, and Hsinchu
Science-based Park. In the era of globalization and the knowledge-based economy, although
barriers such as distance and social differences have been much reduced, localization remains
an important factor unaffected by the lowering of transportation and communication cost.
Many economic activities, particularly in the field of research and development, nonetheless
demand face-to-face communication. Being situated near one another helps facilitate effective