Strengthening regional integration/cooperation with the Neighbourhood System of Innovation conceptual framework: the case of China and ASEAN

Traditional neo-classical market approach to regional integration/cooperation mainly focuseson trade and investment. The paper proposes an innovation system approach to regionalintegration/cooperation as an alternative that focuses on knowledge, learning, innovation,and competence (KLIC) building without excluding trade and investment. The underlyingargument is that while liberal trade and investment conceptual framework takes a narroweconomic gain and loss approach, the system of innovation approach includes economic andnon-economic variables by including KLIC, and broad economic and social gain. The paperpresents the Neighbourhood System of Innovation (NeSI) conceptual framework whichcaptures the reciprocal interactions between national innovation systems (NSI) of larger‘regional economic pole’ (REP) and smaller economies (or among NSIs of the smallereconomies) in the ‘Neighbourhood’ region. The case of China and Association of SoutheastAsian Nations (REP and Neighbourhood, respectively) is used to demonstrate the usefulnessof NeSI framework and its possible application to other similar cases. The aim of the paperis not to produce a path-breaking theory, but to present a different perspective throughinnovation systems approach as an alternative to enhance understanding of regionalintegration and cooperation dynamic processes.