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Building an IT Economy: South Korean Science and Technology Policy

Joel Campbell

South Korea has created a robust IT economy and in this paper, Joel Campbell explores how the country’s recent post-war history has encouraged this technology and science development.

EXECUTIVE SUMMARY

Underlying Korea’s remarkable post-1961 economic development has been the development of a strong science and technology capacity. During the authoritarian regimes (1961-1988), the state created a rudimentary research capacity, primarily focused on creation of government-run research institutions, a technical university, and a central research park, as the private sector gradually began to muster its own applied research capacity. The late 1980s to late-1990s saw a change of direction, as Korea’s chaebol conglomerates became the lead actors in R&D. The well-funded National S&T Technology Program became the focus of state efforts, later superseded by the 21st Century Frontier Program and specified research funds. By the turn of the century, Korea had achieved strong aggregate performance in terms of numbers of researchers and funds spent on R&D, and has continued to build on that for the past decade. 

The IT industry and, to a lesser extent, biotech have become the major drivers of technological development. The shift from the old industrial to new high tech economy facilitated a recasting of national efforts. A refocused state helped midwife the nascent IT sector, through a combination of privatization of the national telephone service provider, creation of infrastructure, and dispute moderation. Even so, recent doubts about Korea’s overall IT competitiveness have arisen.

Meanwhile, since the mid-1990s, Korean policymakers have been captivated by the possibilities of “Big Science,” i.e., basic or foundational science. Korea participates in various international basic science programs, and has created another big state funding effort (the 577 program) to support basic science. The government has spent much policy effort on drafting “visions” of future technological development, but its technological future may depend on maintenance of economic competitiveness.

The fast post-war development of South Korea is one of the most remarkable economic stories of the twentieth century. The small Asian nation in 1960 was one of the world’s poorest countries, with a Gross Domestic Product roughly equal to that of Ghana. By 1995, it rose to become the twelfth largest economy, and Asia’s fourth largest. How Korea was able to accomplish this remarkable feat is a much analyzed story in international political economy, but at its heart was a largely autonomous state that employed a combination of state-directed bank financing, light and then heavy industrial export promotion, fostering of large industrial conglomerates (the fabled chaebol), and suppression of labor unions to create workplace peace. A hard-line military regime gave way to democracy from the late 1980s onward, and the state committed to thoroughgoing economic liberalization as a result of the calamitous 1997-1998 Asian Financial Crisis. Since the late 1990s, Korea has generally been accepted as an addition to the developed world and, as a mature economy, has seen economic growth slow and population size plateau. Koreans have become intense users of electronic media, with broadband computer connectivity and cell phone service achieving nearly universal penetration.

Underlying Korea’s strong economic development has been a consistent effort to create a robust science and technology (S&T) capacity. From the beginning of Korea’s export-oriented drive in the 1960s, this has followed two parallel tracks: creation of a state-led research and educational capacity, centered on state-run research institutes, and in-house research and development efforts by the chaebol and some medium-sized firms. Universities were a relatively weak S&T player, at least until the late 1990s. After the mid-1990s, the focus of state S&T policy shifted from industrial technology to promotion of the information technology (IT) industry.

To get a better understanding of Korea’s technological development, this article examines the post-1961 history of technology development, and the transition to an IT-dominated economy in the 1990s. It then examines state policy and institutional changes, and promotion of the technologies of the twenty-first century. It considers state policy in global science and technology, what Korean technology writers call “Big Science,” and Korea’s future as a technology power.

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