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This paper discusses Rethinking the East Asian Miracle, a collection of 13 essays on a wide spectrum of issues, ranging from the causes of the East Asian crisis and possibilities of recovery to the strengths and weaknesses in the technical, financial and governance structures of the East Asian economies.

This paper aims to distill from both the Asian “miracle” and the “meltdown” since the Asian crisis, a generic East Asian business model which is changing in the context of globalisation, information communication technology, knowledge‐based economy, deregulation and emerging new competition.

The generic business model considers the creative and innovative nature of intellectual capital in a qualitative macroeconomic development model rather than a quantitative or econometric micro‐level business modeling for the firm or industry. Diverse and heterogeneous both within the whole of East Asia and distinguished as Northeast and Southeast Asia, the putative generic business model is further differentiated in terms of customised idiosyncratic models in more mature Northeast developmental states in Japan, Korea and Taiwan contrasted with Southeast “captured” developmental states as in Indonesia and Malaysia entrapped by ethnic politics.

City‐states Hong Kong and Singapore are exceptional because of their size and resultant globalised states. To each its own may be the conclusion in terms of customised national systems and models, but East Asian ethical and moral dimensions of integrity may generally offer a version moral capitalism of which is suited to global capitalism not of the brute Darwinist kind. In the final analysis, East Asia is increasingly exposed to the global marketplace, competition and globalisation backlash, such that some common denominator comes from DFI and MNCs from multicultural political economy dimensions.

The paper presents a putative East Asian business models.

The purpose of this paper is to use the framework of rule-based and relation-based governance to examine the evolution of governance environment in the East Asian region including China, South Korea and Taiwan.

Both qualitative and quantitative evidences are presented to demonstrate the paths these East Asian countries take in their transitions from relation-based governance to rule-based governance. Based on the framework, this analysis sheds light on the debate on whether East Asian economies will eventually move away from relation-based governance to rule-based societies.

The authors find that relation-based governance has helped East Asian countries achieve rapid economic growth in the early stages of their development. However, as the scale and scope of East Asian economies expand, continuing to rely on it may hinder their further development and therefore these countries should adopt a rule-based governance system in order to be efficient and competitive in the world market. While South Korea and Taiwan have made substantial progress in this transition, China has just embarked on the process.

This paper is among the first to systematically review the theories and evidence of the transition and the challenges East Asian countries face during the process.

The rise of East Asia to most dynamic center of processes of capital accumulation on a world scale is a phenomenon of the 1970s and 1980s. As a first approximation, the extent of this rise can be gauged from the trends depicted in figure 1. The figure shows the most conspicuous instances of “catching‐up” with the level of per capita income of the “organic core” of the capitalist world‐economy since the Second World War. As defined elsewhere, the organic core consists of all the countries that over the last half‐century or so have consistently occupied the top positions of the ranking of GNPs per capita and, in virtue of that position, have set (individually and collectively) the standards of wealth which all their governments have sought to maintain and all other governments have sought to attain. Broadly speaking, three regions have constituted the organic core since the Second World War: North America, Western Europe and Australasia (Arrighi, 1991: 41–2; Arrighi, 1990).

Divergence in the development of East Asian and Latin American NICs is catching the attention of a growing number of political economists. This divergent development has sparked debates over THEORY between advocates of neo‐liberal and neo‐dependency approaches (Biersteker; Stallings: 370) in accounting for the regional divergence: does the East Asian success confirm modernization theory (neo‐liberalism) generally, or does each region require its own theory? (see Barrett and Whyte on Taiwan; Alschuler: chap. 4 and Lanzarotti: chap. 5 on Korea; Evans, 1987). East Asian “miracles” have led to equally bitter controversies over PRACTICE with regard to policy recommendations for third world nations: is the East Asian model exportable and is this desirable? (see Amsden; Fishlow; Broad and Cavanagh).

This paper argues that one must be careful in drawing lessons from the development experience of East and Southeast Asia. The economic strategy followed by these countries was not one of free trade, or even simulated free trade. Instead, in these countries key conditions were created which provided hospitable environments for investment coordination. It was the ensuing boom in investment which generated rapid economic development. The current economic problems of this region are not the result of corrupt states or crony capitalism, none of which are new to the region, but the result of an inability to engage in economic restructuring

The Asian crisis, which exploded in Thailand in July 1997 initially, spilled to the other ASEAN countries (Indonesia, Malaysia, and Philippines) and later it spreads to Korea and even crossing the continent to Russia and Brazil. The chronological pattern seems to indicate the contagious behaviour of the crisis. However, the sequential economic down‐turns that occurred in the Asia Pacific do look like a contagion effect. The idea that currency speculators contributed to the depth of the crisis is agreeable but to conclude that they are the roots of the problem would be misleading. This paper argued that the roots of the problems lie in current account deficit and loss of competitiveness, and moral hazard and over‐investment This paper also argued that the currency crisis is a symptom and not the cause of the Asian crisis.

The onset of the 1997 Asian financial crisis took the world by surprise. Its severity and the alarming speed at which it spread sent shock waves around the world. There is still no consensus as to the real causes of this catastrophe although a steep fall in export demand with exchange rates pegged to an appreciating US dollar clearly caused current account deficit problems, which were exacerbated by imprudent bank lending and debt management practices. The economies of Thailand, Indonesia, Malaysia, South Korea and the Philippines were vulnerable to speculative runs on their currencies and rapid foreign investment repatriation with a collapse of investor confidence. It soon became evident that globalisation has its downside for economies unable to withstand the massive capital surges caused by hedge fund manipulation.

This paper aims to propose a framework that combines the triple helix model with competitive strategies concepts to capture and guide any innovation-led national development strategies.

This paper adopted a methodological framework based on existing methods and guidelines, the most commonly reported approach for developing a methodological framework. The review of fundamental approaches to achieving fast and sustained economic development, triple helix model and competitive strategies helped develop the methodological framework. The framework was validated and tested using the case studies approach on Korea, Taiwan and Singapore.

Kuwait aims to create an innovative environment to benefit from the innovation strategies anchored by the East Asian miracle economies and how they used the triple helix actors at different developmental stages. First, Kuwait’s research institutes and universities need to design interactive programs and activities with industry and community to help innovate solutions to current and prospective challenges. Second, the government needs to provide a competitive business environment and effective policies. Thirdly, the Kuwait industry must be encouraged to innovate and infuse modern technology practices.

Developing countries are trying to use science, technology and innovation as an effective strategy for achieving sustained economic growth. However, since each country has its unique conditions, learning from other success stories proved difficult if not structured in a framework designed to serve a specific purpose such as the one the authors propose in this paper.