This paper sketches the key dimensions of two powerful regional innovation systems, the Bonwol Siwha Industrial Cluster in Gyeonggi Province in South Korea and Baden‐Wuerttemberg in Germany. Previous governments in Korea had not paid much attention to empowerment and capacity building at the regional level, resulting in severe imbalances in regional innovation readiness and propensity. To address these deficits, the government in 2005 enacted a new cluster strategy across seven industrial sites. The Bonwol Siwha National Industrial Cluster is the one located in Gyeonggi Province, one of Korea's top three regional innovation systems. This cluster, now specializing in advanced materials and components, is home to 3,000 companies and over 100,000 employees.

It is now presented with the challenge of transforming itself into a high‐tech industrial cluster similar to Baden‐Wuerttemberg. This upgrading presents a considerable policy challenge, especially to the cluster itself and the regional government. The main obstacles on this path are the lack of any major company and a recognized research university, misalignment of conceptions between SMEs and universities, and a lack of competition among the national industrial clusters.

Key words

• regional innovation system,
• policy learning,
• industrial cluster,
• National Industrial Cluster,
• Bonwol Siwha,
• Baden‐Wuerttemberg