ABSTRACT
Recent theorization of economic space centring on the concept of innovative milieu (innovative environment-Aydalot 1985, Lakshmanan 1995) has opened up opportunities for exploring economic dynamics in terms of territorial relationships. Economic space, according to Camagni (1991), has become “relational space, the field of social interactions, interpersonal synergies and social collective actions that determine the innovative capability and the economic success of specific local areas”. The process of creation and innovation for economic development, according to Camagni, should be viewed as the result of
a collective learning process, fed by such social phenomena as intergenerational transfer of know-how, imitation of successful managerial practices and technological innovations, interpersonal face-to-face contacts, formal or informal cooperation between firms, tacit circulation of commercial, financial or technological information. (1991:1)
This chapter is an attempt to explore one particular dimension of the relational aspect of the innovative milieu, that is, the state’s role and its potential for constituting the environment for continuous innovation. To achieve this objective, we will use the case of Singapore, one of the economically successful NIES (newly industrializing economies), to study how the state had set about building the capacity for renewal to combat tendencies of entropy inherent in capitalism.
