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Catching-up Crisis and Industrial Upgrading: Evolutionary Aspects of Technological Learning in Korea's Electronics Industry

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Abstract

This paper address a puzzle: How is it possible that a country that has established a broad, export-oriented industrial base at record speed, remain vulnerable to the vicissitudes of international finance and currency markets? We argue that the Korean model that was tremendously successful for catching-up has now reached its limits. The focus is on the role of technological learning for development of the electronics industry, a main carrier of Korean'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 homogenous, 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.

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  1. Department of Industrial Economics and Strategy, Copenhagen Business School, Denmark

    Dieter Ernst

  2. Berkeley Roundtable on the International Economy (BRIE), University of California, Berkeley, USA

    Dieter Ernst

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Ernst, D. Catching-up Crisis and Industrial Upgrading: Evolutionary Aspects of Technological Learning in Korea's Electronics Industry. Asia Pacific Journal of Management 15, 247–283 (1998). https://doi.org/10.1023/A:1015493615652

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