Competitiveness, FDI and Technological Activity in East Asia
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Competitiveness, FDI and Technological Activity in East Asia

Edited by Sanjaya Lall and Shujiro Urata

This book addresses this imbalance with new country studies on the interaction between foreign direct investment (FDI) and technological activity in building export competitiveness. The book covers China, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand, highlighting different strategic approaches to building capabilities in industrial enterprises. The book also includes a general overview and studies of Japanese multinationals overseas.
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Chapter 6: The dynamics of technology development: lessons from the Korean experience

Linsu Kim


Linsu Kim INTRODUCTION No nation has come as far and as fast, from handicrafts to heavy industry and from poverty to prosperity, as the Republic of Korea (Vogel, 1991). Korea has transformed itself from a subsistence agrarian economy into a newly industrialized one in the space of only four decades. In 1961, Korea exhibited most of the symptoms of underdevelopment that poor countries show today. From 1962, the Korean economy grew at an average annual rate of almost 9 per cent, raising GNP per capita in current prices from US$87 in 1962 to US$10550 by 1997 (Kim, 1997a). Despite undergoing the worst economic crisis since the Korea War in 1997, it bounced back impressively in 1999 with a growth rate of 10 per cent, followed in 2000 with 8 per cent. Korea also achieved phenomenal growth in its exports, which increased from a mere US$40 million in 1963 to US$143 billion in 1999. The structure of manufactured exports changed radically over time (see Table 6.1). The share of primary products fell from 64.4 per cent in 1960 to 2.7 per cent in 1999, and that of manufactures rose from 17.6 per cent to 91.5 per cent. The share of simple manufactures shows an inverted U-shape, rising from 17.3 per cent in 1960 to 54.9 per cent in 1980 and then declining to 28.7 per cent by 1999. Within manufactured exports, the share of simple products decreased steadily from 98.5 per cent in 1960 to 63.7 per...

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