Traditional medicine, modern science and the upgrading of the local pharmaceutical industry: endogenous development of the phytomedicine innovation system in Korea

This study examines the opportunities to upgrade the Korean pharmaceutical industry from imitation to innovation through the development of phytomedicine. Phytomedicines are modern drugs developed by scientifying traditional medicines which have been an overlooked source of knowledge for innovation in studies on latecomers’ industrial development. This study illustrates the emergence of phytomedicine in Korea in view of the sectoral innovation system and the global value chain. It determines the technological and socio-economic conditions for the development of the new phytomedicine sector and discusses its role in upgrading the local pharmaceutical industry. The findings highlight that phytomedicine development provides an alternative path for continuing incremental innovation, which is still a common practice of most latecomers’ industrial development. For latecomers’ pharmaceutical industries, incremental innovation has been regarded as being increasingly difficult to adopt due to the large technological and marketing gap between generic drugs and innovative patented drugs.