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

Korean Government 1.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

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

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

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

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

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

1)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