Innovation Policy and the Limits of Laissez-faire

In the wake of China's economic reforms in 1978, Hong Kong's industrial economy migrated northward, and it could have set about developing a knowledge-intensive economy. But while Hong Kong's early industrialization was a runaway success, its transformation into a new kind of economy has been beset [...]
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In the wake of China's economic reforms in 1978, Hong Kong's industrial economy migrated northward, and it could have set about developing a knowledge-intensive economy. But while Hong Kong's early industrialization was a runaway success, its transformation into a new kind of economy has been beset by problems. In this book, leading experts lay the blame on Hong Kong's laissez-faire tradition. Hong Kong's innovation performance is assessed from regional and global perspectives while examining specific industries and economy-wide institutions for innovation. The lesson drawn is that in countries lacking both large businesses equipped with developed innovation capabilities and institutions for fostering the creation, diffusion, and commercialization of knowledge, laissez-faire just doesn't work. It is this policy of 'positive non-intervention' that has crippled Hong Kong's knowledge economy and prevented it from becoming the global center of innovation that it had the potential to become. The authors, nevertheless, point to sectors of Hong Kong's economy that offer potential promise, and they seek to show how a nimbler government hand could help the knowledge economy thrive.This book will appeal to all who are interested in the dynamic East Asian economic region. But more than that, it provides a case study of the respective merits of big versus small government, a topic as heated now as it has ever been.