South Korea’s Industrial Development Since the Early 1960s

Author/s: Sang-Woo Nam
1st Edition Year: 2020
Edition: First Edition
Language: English
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The paper examines the remarkable growth of the South Korean economy from the early 1960s to the early 2000s. This paper provides an overview of South Korea’s industrial development process, with a particular emphasis on the heavy and chemical industries’ drive in the 1970s and the impact of educational expansion and investment on technological capabilities. The paper shows how this economic growth was primarily due to an export- oriented industrialization strategy and consistent upgrades to industrial infrastructure and systems to remain competitive in the global market. One of the most important policies pursued by the government was the development of the country’s human potential. The paper argues that without this investment, it would have been impossible for South Korea to emerge as one of the most innovative economies in the world. These achievements are attributable to the vision of the political leadership, a supportive government, the hard work of entrepreneurs and others who contributed their valuable human resources.

It also examines the 1997 foreign exchange crisis, its causes, and impact on South Korea, as well as the lessons learned, and new policies enacted in its aftermath. The rapid build-up of industrial capabilities was the result of a substantial reduction in investment risks with comprehensive government support for financing, infrastructure, technology and manpower development. However, this also made South Korea’s large multi-national industrial companies (chaebols) reckless in fiscal policies. Furthermore, a concentration of economic power and chaebol’s putting family interests first — remains a cause of serious socio-political tension in South Korea.

The paper concludes that South Korea’s industrial development since the early 1960s include: strong political leadership with vision and a strong commitment to economic development; industrial policy with a focus on promoting heavy and chemical industries; state-chaebol development partnership; and huge investment in human capital and technological capabilities.

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