- Published: December 2009
Industrial Policy and Territorial Development: Lessons from Korea
- Published: May 2012
- Region: Global
- 150 Pages
- OECD Publishing
Korea is a well-known case of successful catching up achieved through an effective government-led export-oriented strategy. It is one of the few countries in the world that has managed radically to transform its domestic economy from one based on agriculture to that of a leading world industrial power, with a constant increase in income per capita and a high growth pattern. The Korean catching up has been the result of a deliberate national development strategy which fostered industrialisation in heavy and chemical industries through sequenced and complementary policy interventions targeting the creation of domestic industrial capacities (through a mix of export promotion and import controls), development of education and skills, infrastructure building and management of capital markets.
Key policy tools of catching up have been the Five Year Economic Development Plans. From 1962 to 1992 the Korean government established seven plans which set clear targets, identified lines of actions and assigned resources to achieve them. A distinctive characteristic of the multi-annual plans has been the gradual upgrading of targets as objectives were achieved. Actions in key policy fields were sequenced and coherent with each other. While industrial policy prioritised industries with increasing knowledge content, trade policies selectively managed import restrictions and export incentives, and exchange rates were managed to favour exports of national products. Policies for human capital prioritised first literacy and later excellence in training and research, accompanying the rising demand for skilled labour.
This report reviews the Korean catching up and it analyzes the recent reforms which have been put in place to address the territorial dimension in the design and implementation of industrial policies, with a view to share knowledge and policy experience with emerging and developing economies. SHOW LESS READ MORE >
Chapter 1. The success of Korea’s “catching up” strategy
Chapter 2. Regional development policy in Korea
Chapter 3. What can be learned from the Korean experience?