The triple-helix model of innovation-led economic development is a social science theory that was developed in 1995. It explains how the dynamics between three key actors — academia, industry and government — foster entrepreneurship, innovation and economic growth. Secondary players include intermediaries, legal firms and non-governmental agencies. 

In Asia, this model is most effective when central governments are willing to relinquish control to local governments. Collaboration between the key actors is crucial for locations attracting foreign direct investment (FDI), playing a role within innovation-driven industries and creating high value-added jobs. 

The Chinese tech hub of Shenzhen is a notable example of how world-leading companies can emerge from these ecosystems. The city is home to the headquarters of leading electric vehicle battery maker BYD and software giant Tencent, which has grown into a global behemoth since being founded by Pony Ma and four other Shenzhen University classmates in 1998.

A 2017 academic analysis of the Shenzhen Special Economic Zone illustrates the secret to some of this success. There was loosened control of the central government, notably in the areas of infrastructure construction and pricing. This enabled companies based in the zone to increase efficiency of their production and transfer the development pressure confronted by the central state to lower levels of the state apparatus. 

Also, the key players developed interactive linkages with each other. The Shenzhen government created a favourable institutional environment to attract infrastructure construction, manufacturing and high-tech industries. The industry conducted research and development, enabling modernisation and innovation. Academia engaged in technology transfer, founding new research spin-offs and other reform measures including promoting university–industry linkages, developing university-run enterprises, building science parks and managing multi-campus systems. 

One weakness is that the three key triple-helix actors in Asia are often different in their development stages. While the industrial sector remains the leader in pursuing innovation, many Asian governments retain strong authoritarian control, hindering the model's efficacy.

If more Asian central governments pursue reform to allow local governments to have enough freedom and power to coordinate industrial development, FDI that can drive economic growth will follow. With less state intervention, the triple-helix approach can certainly boost Asia’s economic development further. 

Lawrence Yeo is CEO of AsiaBIZ Strategy, a Singapore-based consultancy that provides Asian market research and investment/trade promotion services. E-mail: lawrence@asiabizstrategy.com

This article first appeared in the April/May 2022 print edition of fDi Intelligence.