Economic Catch-up and Technological Leapfrogging
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Economic Catch-up and Technological Leapfrogging

The Path to Development and Macroeconomic Stability in Korea

Keun Lee

This book elaborates upon the dynamic changes to Korean firms and the economy from the perspective of catch-up theory. The central premise of the book is that a latecomer’s sustained catch-up is not possible by simply following the path of the forerunners but by creating a new path or ‘leapfrogging’. In this sense, the idea of catch-up distinguishes itself from traditional views that focus on the role of the market or the state in development.
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Chapter 8: Catch-up and leapfrogging in six sectors in the 1980s and 1990s

Keun Lee


Chapter 8 examines the experiences of selected industries in Korea to identify the stylized facts in the process of technological capability building and thereby to sort out the conditions for the catching-up to occur. To explain the process, we have built a model of technological and market catching-up. Special attention has been given to the question of whether there has been a case of leapfrogging in any industry in Korea and, if so, what are the conditions for its occurrence. In our framework, we first measure the degree of catching-up in terms of market shares in the world. Then we focus on catching-up in technological capabilities in explaining the different records and prospects of Korean industries in market share catch-up. Using this model, we explain the different technological evolutions of selected industries in Korea in the 1980s and 1990s, including the memory chips (D-RAM), automobile, mobile phone, consumer electronics, personal computer, and machine tool industries. We find three different patterns of catching-up: path-creating catching-up (CDMA mobile phone), stage-skipping catching-up (D-RAM and automobile), and path-following catching-up (consumer electronics, personal computers, and machine tools). We interpret the first two cases of catching-up as “leapfrogging.” We find that important R & D projects involved both private and public capacities (except automobiles where only private R & D was involved), and that entry was not driven by endogenous generation of knowledge and skills but by collaboration with foreign companies.

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