Rethinking Path Dependency and Regional Innovation - Policy Induced 'Government Dependency': The Case of Daedeok, South Korea

This study focuses on exploring the behaviours of high-tech start-up firms in response to the policy interventions undertaken to promote regional innovation in South Korea since 1997. High-tech start-ups and their technological entrepreneurship are increasingly considered by policy makers and academics to play a crucial role in the generation of innovation and economic development. However, this study started from a basic concern of why government intervention does not necessarily result in an increase of regional innovation capacity. To explain this concern, we constructed a new conceptual framework of 'government dependency' and apply this to 'Daedeok,' a regional innovation system in South Korea, to explore the reproduction of path dependency as an impact induced by innovation policy. This conceptual framework was developed by remodeling path dependency approaches through a systemic and interactive lens. An empirical study used qualitative interviews of start-up founders to delineate the emergence of a new development path and the extent to which dependency was reproduced in the Daedeok regional innovation system. Empirical analysis suggested that 'reliance' and 'persistence' were the crucial factors in the production and reproduction of the government dependency. Some firms accepted dependency as reliance, but others regarded it as policy utilization. Thus, a critical juncture could not be clearly identified in actors' behaviour. It was also unclear if dependency had hindered innovation, but it was shown that the regional and institutional contexts strongly influenced the reproduction process. The study concludes that the construct of government dependency can also provide useful insights into policy learning as well as the success of government interventions.