Catching-Up, Crisis and Industrial Upgrading. Evolutionary Aspects of Technological Learning in Korea's Electronics Industry
80 Pages Posted: 16 Mar 2016
Date Written: August 1998
This paper addresses a puzzle: How is it possible that a country that has established a broad, export-oriented industrial base at record speed, remains vulnerable to the vicissitudes of international finance and currency markets? I argue that the Korean model that was tremendously successful for catching-up, has now reached its limits. The analysis centers on the co-evolution of industry structure and firm behavior. The focus is on the role of technological learning for the development of the electronics industry, a main carrier of Korea´s successful late industrialization. It is shown that a heavy reliance on credit and an extremely unbalanced industry structure have given rise to a narrow knowledge base and a sticky pattern of specialization. Catching-up has focused on capacity and international market share expansion for homogeneous, mass-produced products; very little upgrading has occurred into higher-end and rapidly growing market segments for differentiated products and services. Such truncated upgrading is one important reason for Korea´s vulnerability to the financial and currency crisis.
Keywords: Industrialization, industrial upgrading, industrial policies, electronis industry, financialo crisis, Korea
JEL Classification: O14, O25, O38, O53
Suggested Citation: Suggested Citation