Conclusion

As I have illustrated above, an embryonic “historical turn” has recently emerged in social sciences. In some sense, the recent development in evolutionary economics and evolutionary economic geography that both regard economy and economic landscape as a dynamic process is a response to the historical turn in social sciences.

Bringing history to economic geography is of vital importance to theoretical and methodological foundation. “History matters” is widely accepted by social scientists, but often is simply reduced to the concept of “path dependence”. Although path dependence is very important, with history and memory influencing today and the future system, particularly in co-determining structure of the system (Cilliers, 1998), too strong “history” in this theory makes it very vulnerable to the suspects of historical determinism. When locked into some trajectory, there is little possibility to transform the existing path, and hence history can be known only as an ex post factor (backwards-looking thinking), and there is no place for human creativeness. Accordingly, path creation is also important, considering the huge uncertainty in technology market and even institution (Garud and Karnøe, 2001), it is necessary to add the role of human creativity and intentional actions to the traditional path study. In the redefined model of path creation, powerful and innovative actors make a new path possible. That is, the path breakthrough in the redefined model of path creation is endogenous innovation by traditional entrepreneurs in the Schumpeterian sense and institutional entrepreneurs, rather than the David type of path breakthrough, namely external shock. The path

creation’ forwards-looking thinking reflects the capability of human intention in the new model. Hence, the combination of path dependence and path creation could be useful to better understand stability and changes of complex systems.

Evolutionary economics as heterodox economics does not focus on economic final results but its processes, and employs biological metaphor and population thinking or complexity system thinking. At the centre of evolutionary economics is novelty (innovation) as the fundamental force driving economic change. This is why evolutionary economists and innovation scholars frequenctly make constructive dialogues. Their research scopes and contents sometimes overlap with each other, i.e.

evolutionary economists, for example, Richard Nelson himself, do research on innovation system and at the same time, innovation system scholars such as Bengt-Åke Lundvall and Philip Cooke actively participate in constructing evolutionary economics.

Economic geographers who are interested in dealing with the uneven distribution of economic activities over space, surely made an attempt to apply evolutionary economics into economic geography, and contributed to our understanding in the changes in economic landscape. Co-evolutionary economics not only considers the evolutionary process but also emphasizes the relationships and inter-dependence among the different systems (path interdependence), or multiple levels of a single system (multilevel interdependence). Therefore the notion of co-evolution will not surprisingly be helpful to understand the economic world more really.

Institution and technology have been theoretically separated in the past. Recently some theorists want to combine them and make some empirical explorations. The most outstanding one is Murmann’s comparative work on the development of the synthetic dye industry in Great Britain, Germany, and the United States through the lenses of evolutionary theory. But most of theoretical and empirical discussions are at the national or industrial level, not regional or local level. An unresolved issue thereby still retains, can coevolution study on the national scale be straightly applied to sub- national scales? Moreover, we must adopt a dynamic view to study co-evolution itself.

To do so, I tried to link co-evolutionary degree to co-evolutionary effect. As in biology, co-evolution in economic system also has a geographical dimension. Economic growth is not geographically even, and competitive industries only occur in a few regions in which firm, technology and institution interact in a favorable way, which I call co-evolutionary hotspots.

As previously pointed out (in Chapter 1.2.2), the main aim of my dissertation is to deal with an old but still ongoing question: how do industrial clusters come into existence and how do clusters evolve, but from a coevolutionary perspective. So my research focuses on the intertwined processes of firm organizational change, technological and institutional innovation in a cluster. China has undergone significant changes in many socio-political and economic aspects, among which the most significant are the two transitions, firstly from capitalism to a centrally planned socialism, secondly to a market economy, and industries in China experienced significant changes in firm organization, technology and institution. A good example is the pharmaceutical industry which started from TCM industry, through chemical pharmaceutical technology, and today entered the times of biotechnology. At the same time, large, middle and small-sized pharmaceutical enterprises coexist in this sector, some of them come from overseas. As regards its geographical structure, some geographical concentration of pharmaceutical enterprises emerged in China (see Chapter 3.4.3 and Chapter 3.5), among which the most remarkable are Beijing (biotechnological pharmaceuticals), Shanghai (biotechnological pharmaceuticals), and Shijiazhuang (Chemical pharmaceuticals), Tonghua in Jilin (Traditional Chinese Medicine, TCM). Beijing and Shanghai are the two largest metropolises in which most of China's first-class research institutes and universities in the field of pharmaceutical and medical industries are located, so these two cities’ pharmaceutical sectors host a lot of R&D-oriented (foreign) pharmaceutical enterprises and small enterprises run by overseas Chinese students. The Shijiazhuang Chemical pharmaceutical industry is historically based on a large-sized state-run enterprise (today’s North China Pharmaceutical Group established in 1958), and has been specialized in Chemical pharmaceuticals. The economic achievement of this sector in Tonghua city, however, is based on neither a R&D-based knowledge advantage nor origin from a large state-run enterprise. In addition to the technological history, though the Tonghua pharmaceutical sector has a long tradition in the production of TCM drugs, it transformed to Chemical pharmaceuticals between 1960s and 1970s and then shifted again to TCM productions after the mid-1980s. The pharmaceutical firms also changed significantly in their form of ownership, for example, from family-run store, state or collective-owned (during the Maoist period), to contracted enterprises or workshops (in the Dengist China), and private firms today. During the time, the firm size also changed. Nowadays, some Tonghua pharmaceutical enterprises have emerged that have relatively large shares in

sales across China. So these characteristics of technological change (compared to Beijing, Shanghai and Shijiazhuang), variety in firm organization, together with local institutional change, enable us to better observe the interaction of technology, institution and firm in an industrial cluster.

Chapter 3 Changing Environments for China’s