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KOREA: Absorptive Capacity

Government. Catch-up strategy. Japanese Occupation (1909~1945). KOREA: Absorptive Capacity. Chosun Dynasty (1392~1909). History. Korean Civil War (1950~1953). Reverse engineering. Chaebol. Education. Korean Government Warm and healthy Seed-bed

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KOREA: Absorptive Capacity

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  1. Government Catch-up strategy Japanese Occupation (1909~1945) KOREA: Absorptive Capacity Chosun Dynasty (1392~1909) History Korean Civil War (1950~1953) Reverse engineering Chaebol Education

  2. Korean Government Warm and healthy Seed-bed Defending the inflow of foreign product in terms of tariffs and tax promoting GRI and Joint R&D - market failure, Basic science 2. Why some governments are successful and others not – transparent, ethically just Culture of a society Size of the country

  3. Catching up is considered as a question of relative speed in a race along a fixed track, and technology is understood as a cumulative unidirectional (Perez, 1988) The idea of leaf-flogging is that some latecomers may b able to leap-frog Older vintages of technology, bypass heavy investment in previous Technology system, and catch-up with advanced countries (Hobday, 1995) Why can certain industries achieve a remarkable catching-up or leapfrogging and continue to have a good prospects for the near future, whereas other industries face serious difficulties after certain amount of catching-up ? Technological capabilities are explained in terms of the function of both technological effort and the existing knowledge base

  4. Short-term market share catch-up is possible without building technological capabilities The D-RAM. automobiles, and CDMA industries – long sustained increase in market share Cnonsumer electronics and personal computer industries experienced a sudden loss in market shares after a long period of increase Level of technological capabilities - duplicative imitation, creative imitation, and innovation (Kim, 1997) - low-tech part development, high-tech part development, product design, and finally product concept creation The case for Korean company’s reverse engineering - assembly production of imported parts, low to high tech part development, existing product design, new product concept creation

  5. Technological Regimes Available knowledge & Resources • Fluidity of Technological • Trajectory • Frequency of Innovation • Access to External • Knowledge Base Expected change for Product Development Strategies & Policies R & D Outcome & New Knowledge Market Success • Firm Strategies • Role of the • Government R & D Effort R & D Effort Sources for Competitive Advantages • Cost edge • Differentiation • First mover advantage Expected change for Market Success Model of technological and market catch-up (Lee & Lim, 2001)

  6. Technological regime is defined by the combination of technological opportunities, appropriability of innovations, cumulativeness of technical advances, and the property of knowledge base Cumulativeness of technical advance = frequency of innovation The predictability of technological trajectory = Fluidity of technical trajectory The access can come in diverse forms including informal learning, licensing, FDI, strategic alliance, co-development, and so on

  7. Path of the Forerunner : Stage A  Stage B  Stage C  Stage D Path-Following Catch-up : Stage A  Stage B  Stage C  Stage D Path-skipping Catch-up : Stage A ------------- Stage C  Stage D (leap-frogging I) Path-Creating Catch-up : Stage A  Stage B  Stage C’  Stage D’ Three patterns of technological catch-up (Lee & Lim, 2001). Notes : In stage C, the two technologies, C and C’, represent competing technologies

  8. Stage skipping catching-up Automobile and D-RAM industry - Low frequency of innovation and more predictable technological trajectory - easy access to external knowledge base D-RAM industry - High frequency of innovation and more predictable technological trajectory - Collaboration with GRI 2) Path creating catching-up CDMA industry - High frequency of innovation and high fluidity of technological trajectory - Korean R&D consortium with Qualcom, not endogeneous 3) Path following catching-up Consumer electronics and PC - High frequency of innovation and high fluidity of technological trajectory

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