Designing effective industrial and science, technology and innovation (STI) policies is still an ongoing quest for both developed and developing countries. This book examines industrial as well as STI policies in East Asian countries South Korea and Japan comparatively. Japan is one of the largest industrial economies in the world. However, it is experiencing competitiveness problems with a relative fall in its manufacturing industry indicators such as exports. Korea is, on the other hand, a rapidly rising industrial power challenging larger peers including Japan. The two economies are competing in similar markets and are on different cycles of development. This book looks at the competitive positions of the two countries in the field of industrial and STI policies in general and in the sectors of railway equipment, medical equipment, aviation equipment and electronics.
Chapter 2: STI Policies in Korea
Korea has transformed itself from a least developed country to an upper middle income or an advanced country over the last half century by establishing a strong industrial base. The Korean economy increased its per capita income 323 times between 1953 and 2007, during which per capita income of 67 USD increased to 21,695 USD. During the same period, Korea’s exports increased from a mere 30 million to 400 billion USD. In 2011, Korea’s total trade recorded one trillion USD, which placed Korea as the 9th largest trade economy in the world.
For a better understanding of Korea’s development process, it is essential to analyze the industrial development policy and to see how the policy has evolved as the Korean economy entered the different stages of industrialization, highlighting specific features of industrial policy development during the last five decades. Industrial development policy is a very broad concept covering monetary and fiscal policy, trade policy as well as technology and manpower development policy issues, which are related to the promotion and structural change of manufacturing industries. In the process of Korea’s industrialization, there was a strong interplay. Korea introduced a five year technology development plan as soon as it initiated its first five year economic development plan in 1962, when the country was still at a stage of least economic development. It implies that Korea was fully aware of the importance of technology development in the process of industrialization. Basically in Korea,...
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