Half Century of Industrial Developments in Korea Y.O.Ahn Ph.D. Ajou University October, 2014

First stage of the Korean industrial revolution $ 300 MM export achieved. Hoffman Index =Light industry/ Heavy industry was GDP per capita of $100 in 1963 jumped to $150 in During this 1 st Economic Development Plan of import substitution, cement, fertilizer and oil refinery industries established. Export oriented industrialization set up as a national strategy. Light industries using low wage female labor.

Next stage of the Korean industrial revolution In GDP per capita of Korea was $200 compared to $212 of North Korea. Export goal of $10 billion achieved in GDP per capita became $1,000 and Hoffman Index was 0.96 $10 billion needed for Heavy and Chemical Industries raised from National Investment Fund and Japan Reparation Fund. Korea Institute of Science and Technology (KIST) started functioning after KAIS followed in ADD established. Era of Heavy and Chemical Industries finally emerged.

Beginning of Heavy and Chemical Industries POSCO established with 1 MM tons/yr production First ship of Hyundai Ship Construction launched – oil tanker of only 2.6 MM Ton (25 meterx350 meters) Hyundai Heavy Industries today has capacity of building 10 MM Ton ships. Export grew $1 billion (1970) to $10 billion (1977) GDP per capita grew from $250 to $1,000 in same period with Hoffman index decreasing from 1.5 to 1.0

Oil shock and plans for Heavy and Chemical Industries Oil shock of 1973 caused the oil price to go up from $2 to $10 per barrel when Korea was getting oil from Gulf Oil (30%), Caltex(20%) and Union(10%) Hyundai Construction wins bid to construct Jubail Port Construction against the bid of Brown-Root. Korea Institute of Science and Technology (KIST) began functioning in 1969 and Graduate School KAIS also started in Heavy and Chemical Indusries Development began at Blue House by appointing The 2 nd Presidential Secretary for the Economy.

Execution of Heavy and Chemical Industries With success in achieving the plan, export increased from $ 10 billion( 1978) to $ 100 billion(1982) GDP per capita increased from $1,000 to $10,000. Hoffman Index decreased from 1.0 to 0.5. In addition to Heavy and Chemical Industries, precision industries, fine chemicals and other high tech industries begin to emerge. Daeduk Science Town begins to function. KIST give birth to Agency for Defense Development (ADD)