Economic Catch-up and Technological Leapfrogging

Economic Catch-up and Technological Leapfrogging

The Path to Development and Macroeconomic Stability in Korea

Keun Lee

This book elaborates upon the dynamic changes to Korean firms and the economy from the perspective of catch-up theory. The central premise of the book is that a latecomer’s sustained catch-up is not possible by simply following the path of the forerunners but by creating a new path or ‘leapfrogging’. In this sense, the idea of catch-up distinguishes itself from traditional views that focus on the role of the market or the state in development.

Chapter 9: Digital technology as a window of opportunity for leapfrogging: the display industry

Keun Lee

Subjects: asian studies, asian development, asian economics, asian innovation and technology, development studies, asian development, development economics, economics and finance, asian economics, development economics, economics of innovation, evolutionary economics, innovation and technology, asian innovation, economics of innovation


Chapter 9 examines the leapfrogging thesis using the case of catch-up in digital TV by Korean firms. Despite the disadvantages implied by the technological regime of digital TV and the risks facing early entrants in trajectory choice and initial market formation, Korean firms had achieved a “path-creating catch-up” in the sense they chose a different path from the Japanese forerunning firms. As they had been closely watching the technological trends and the standard-setting process, there was less risk of choosing the wrong technological trajectory. Also, despite the lack of sufficient capability and core knowledge base, Korean firms had some complementary assets, such as the experience of producing analogue TV, and were able to develop the prototype digital TV and the ASIC chips, given the access to the foreign knowledge via overseas R & D posts and the acquisition of a foreign company. To secure the initial market size, the Korean firms targeted the US market from the beginning, and their source for competitive advantages was the speedy setting up of the production system for mass production of products at the initial stage. The initial failure of the Japanese firms and the success of the Korean firms do suggest that the period of paradigm shift, like this toward digital technology, can serve as a window of opportunity for latecomers while penalizing the forerunner.

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