Korean Industrial Competence: Where It Came from

Abstract

Korea's industrialization has overwhelmingly and in fundamental respects been directed and controlled by nationals. Inflows of investment resources have largely been in the form of debt. Technology has thus been acquired from abroad primarily through means other than direct foreign investment. In addition, licensing has been of limited importance, and the sales of manufactured exports have typically been at arm's length. Indeed, for most industries, Korea appears to have had little difficulty gaining access to technology and to export markets: that is, world markets appear to be competitive, not restrictive, as is frequently asserted. The principal implications for countries less far along the path of industrialization are these. First, a high level of technological sophistication is not required to attain substantial industrial competence, and it is possible to become a significant industrial power simply on the basis of proficiency in production. Second, there is tremendous efficacy in relying on export activity as a means of acquiring industrial competence. Exporting thus appears to offer a direct means of improving productivity.