Catching-Up, Crisis and Industrial Upgrading. Evolutionary Aspects of Technological Learning in Korea`s Electronics Industry

Dieter Ernst

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Abstract

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.
Original languageEnglish
Place of PublicationFrederiksberg
PublisherDRUID - Danish Research Unit for Industrial Dynamics
Number of pages80
ISBN (Print)8778730546
Publication statusPublished - 1998
Externally publishedYes
SeriesDRUID Working Paper
Number98-16

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