Korean National System of Innovation

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KOREAN NATIONAL SYSTEM OF INNOVATION: ITS CHARACTERISTIC

FEATURES, ROLE AND POSITION WITHIN THE INTERNATIONAL
INDUSTRIAL NETWORK
A Dissertation
Presented to
The Faculty of the Graduate School of International Studies
University of Denver
In Partial Fulfillment
of the Requirements for the Degree
Doctor of Philosophy
by
Jayoon Koo
June 1995
R eproduced with perm ission of the copyright owner. Further reproduction prohibited without permission.
UMI Number: 9605735
Copyright 1995 by
Koo, Jayoon
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THE GRADUATE SCHOOL OF INTERNATIONAL STUDIES

at
THE UNIVERSITY OF DENVER
Upon the recommendation of the Dean of the Graduate School of International

Studies, this dissertation is hereby accepted in partial fulfillment of the
requirements of the degree of
Professor in charge of dissertation
Dean of the Graduate School of

International Studies
Date
KOREAN NATIONAL SYSTEM OF INNOVATION: ITS CHARACTERISTIC

FEATURES, ROLE AND POSITION WITHIN THE INTERNATIONAL
INDUSTRIAL NETWORK
An Abstract of a Dissertation
Presented to
The Faculty of the Graduate School of International Studies
University o f Denver
In Partial Fulfillment
of the Requirements for the Degree
by
Jayoon Koo
June 1995
ABSTRACT
The purpose of this study is to seek an answer to the puzzle of Koreas

economic success based on the theoretical perspective of technological change
and economic growth with a special emphasis on the institutional adaptations to
new technological systems of a global nature. The objectives of this study are
threefold: first, it is to examine the characteristic features of
innovation system in terms of
the Korean
its efficiency in adapting to the changes of
technological system; second, it is to investigate the learning process of a

representative private Korean firm in terms of its organizational adaptation to the
changing technological environment; and third, it is to understand the Korean
national system of innovation within the international context.
The distinguishing features of the Korean national system of innovation
can be characterized as: 1) the active role of private firms, particularly Chaebol
groups, in improving technological capability through learning and adaptation of
imported technologies; 2) the supportive role of
government for advancing
industrial technologies; and 3) a social environment conducive to technological

innovation and diffusion.
In the case study, we chose Samsung Electronics Company which has
become the largest single firm in Korea and one of the worlds leading makers of
memory devices in less than a quarter century. We found that this rapid pace of
building up technological competence was made possible through various forms of
learning and efficient adaptation to a changing environment by way of organiza

tional modifications and technological innovations.
The Korean national innovation system was found to have been strongly
influenced by the technological legacy it had inherited from Japanese colonialism
and US protectorship.
Empirical investigation shows that Korea has been
strategically positioned as an intermediate link between Japan and the United

States and, to a lesser degree, among EC member countries. This position has been
assumed by voluntaristic actions on the part of Korea in its efforts to carve out a
competitive niche in its national innovation system. However, the position has also
been determined and constrained by the general features of the international
industrial network which is continually being reformulated and changed due to the
diffusion of technological innovations.
TABLE OF CONTENTS
LIST OF TABLES
vii
LIST OF ILLUSTRATIONS
xi
Chapter
I.
Page
INTRODUCTION................................................................................................
Statement of the Problem.......................................................
Purpose and Objective of the Study.......................................
Korean National System of Innovation Supporting

Technological Advancement in Industry
Innovation System of a Firm Building Up Technological
Capability Through Learning and Improvement
The Positional Characteristics of the Korean Innovation
Innovation System Within the International
Networks of Technological Innovation
Relevance and Significance of the Study................................
Major Working Assumptions andMethodology ......................
Major Working Assumptions

Methodology of the Study
Limitation of the Study ................................................................
14
Structure of the Study .................................................................
15
Chapter
II.
Page
A CRITICAL ANALYSIS OF THE THEORIES OF THE DIFFUSION

OF TECHNOLOGICAL INNOVATION.........................................................
jg
Economic Theories of Technological Diffusion ........................
18
National Systems of Innovation ..............................................
21
Major Proponents of National System of Innovation

Theories on the International Diffusion of Technological
Innovation ...............................................................................
25
Technology Gap/Catching Up Theory

Theory of Technological Dependency
Theory of Long Waves and Technological Inn ovation
The Search for a New Theoretical Framework for International
Diffusion of Technological Innovations ...................................
32
The Need for a New Theory

Network Approach: A New Theoretical Framework
Chapter Summary......................................................................
III.
INDICATORS OF TECHNOLOGICAL CAPABILITY AND ECONOMIC

GROWTH IN KOREA .....................................................................................
38
41
Introduction ............................................................................
41
The Stock of Technological Knowledge ..............................
43
Technological Change in an Input-Output Framework .........
46
Summary of Industry Trend in R and S

Major R & D Indicators ..........................................................
Level of R&D Investment
Statistics of Industrial Property Rights
iii
56
59
Chapter
IV.
Page
Technological Balance of Payment
60
Chapter Summary
61
THE CHARACTERISTIC FEATURES OF THE KOREAN NATIONAL

SYSTE , : OF INNOVATION SUPPORTING TECHNOLOGICAL
ADVANCEMENT IN INDUSTRY.............................................................
The Role of Private Firms in Improving Technological

Capability
64
The Economic Environment and the Characteristics of

Korean Firms
The Relative Size of Big Business Groups in Korea
GTC and Conglomeration
The Evolution of Corporate Organizations
Major Sources and Channels of Industrial Technology
Strategies of Firms to Acquire Technological
Capability
The Major Institutional Features of Korean Firms
Supporting Innovation System
The Role of Government in Supporting the National System
of Innovation.......................................................................
87
Establishment of Institutional Foundations for

Developing Science and Technology
Transition o f Science and Technology Policies in
Korea and Its Characteristics
Development of Industrial Technology Through
Inducement of Foreign Technologies
Scientific and Technological Manpower Management
Social Environment Conducive to Innovation....................
120
Social Movement for Creating a Climate Conducive

to Innovation
Social Zeal for Education
Chapter Summary...................................................
IV
125
Chapter
Page
V. INNOVATION SYSTEM OF A FIRM BUILDING UP TECHNOLOGICAL

CAPABILITY THROUGH LEARNING AND IMPROVEMENT: THE CASE
OF SAM SUNG ELECTRONICS COMPANY .....................................................
12g
Introduction..........................................................................
128
Why Was Sam Sung Electronics Company Chosen?
132
The Growth of SEC Through Learning and Institutional

Adaptation .......................................................................
136
Start - Up Period (1969 - 1971)

Foundation Growth Penod (1972-1974)
Expansion and High Growth Period (1975 - 1979)
Structural Adjustment and Technology Development
Period (1980 - 1985)
The Growth Period of Semiconductor Business (1983
- 1986)
Overseas - Orientation Period (1986 - 1987)
Globalization Period ( 1988 to the present)
The Major Institutional Features of SEC Supporting Innovation System ..................................................................
183
Human Resource Management

R & D System and Technical Training
User - Supplier Interaction
Diversification and Globalization
Chapter Summary................................................................
199
Chapter
VI.
Page
THE POSITIONAL CHARACTERISTICS OF THE KOREAN NATIONAL

SYSTEM OF INNOVATION WITHIN THE INTERNATIONAL
NETWORKS OF TECHNOLOGICAL INNOVATION...........................................
2Qj
Introduction ..........................................................................
201
The Evolutionary Development of the International

Industrial Network ................................................................
203
The Relationship Between Technological Change

And the Global Economy: A Conceptual
Framework
The General Characteristics of International
Industrial Networks Since World War II
The Positional Characteristics of the Korean National
Innovation System Within the International Innovation
Network ...........................................................................
230
Political Economy of Koreas Technological

Trajectories Before and After 1960s
The Positional Characteristics of the Korean
National System of Innovation
Chapter Summary .............................................................
264
.......................................................
267
A Classification of Manufactured Good By Use (Based on

SITC 3 Digit)...........................................................................
280
B. Trade Specialization Index (TSI) and Intra-Industry Trade

Index (DTI) ............................................................................
281
SELECTED BIBLIOGRAPHY ...................................................................................
321
VII. SUMMARY AND CONCLUSIONS

APPENDICES
vi
LIST OF TABLES
Table
Page
1.
Technology Stock Based on Accumulated R & D
.........................
2.
Technology Stock Based on Patent and Technology Import
Degree of Substitutions (R )................................................................ 4S
4.
Degree of Fabrications (S ).................................................................
51
5.
Summary of Industry Trend in R and S (75 - 78 )..............................
54
6.
Summary of Industry Trend in R and S (80 - 8 8 )..............................
55
7.
Major R&D Indicators in Korea
.....................................................
57
8.
Trends of Industrial property Rights Applied By Korean and

Foreign Nationals .................................................................
58
9.
Status of Foreign Applications Filed By Korean Nationals
............
59
10.
Technological Balance of Payments
...............................................
60
11.
The Shares of Business Groups in Manufacturing
..........................
66
12.
The Shares of Business Groups in Shipment By Industry (1987).....
67
13. The Export Shares of General Trading Companies
......
........................
14.
Ownership Structure of Chaebol (As of December 1983)
15.
Internal Transaction Ratio of Chaebol By Rank
16.
44
45
69
.............
70
.............................
71
Percentage Distribution of Major Sources of Technology By

Industry For New Products ....................................................
74
vii
Table
17.
Page
Types of Products Produced With Imported Technology By

Nation ..................................................................................
75
Types of Products Produced With Imported Technology By

Industry ...............................................................................
76
Percentage Distribution of Channels of Learning Foreign

Technology .........................................................................
77
20.
Overseas Research Centers of Korean Firms (As of July, 1991).....
85
21.
Status of In-House Technological Colleges And Graduate

Schools .................................................................................
86
Summary of the Main Features of the Long-Term Science And

Technology Development Plan ...........................................
88
23.
Major Businesses of MOCI And MOST
90
24.
Science and Technology Policies in the 1960s
............................
93
25.
Aspects of Industrial Economy, and Science and Technology

(1960s) ..............................................................................
95
18.
19.
22.
....................................
26.
Science and Technology Policies in the 1970s
............................
96
27.
Aspects of Industrial Economy, and Science and Technology

(1970s) ..............................................................................
98
28.
Trends of Foreign Investment in Korea (on Approval Basis)
....
105
29.
Allowance of Foreign Technology By Nation
...........................
106
30.
Foreign Technology Allowances By Nation and Field (As of

August 31, 1993) ..............................................................
107
Foreign Technology Allowances and Payments By Nation
108
31.
.......
viii
Table
Page
32.
Types of Technical Licensing Imported
.......................................
109
33.
Trends of Capital Goods Imports
..................................................
110
34.
Summary of Foreign Technology Imports in the 1980s
................
Ill
35.
Technical Qualification Titles
........................................................
117
36.
Technical Title Holder in Engineering and Craft Groups
..............
117
37.
Inducement of Overseas Korean Scientists and Post-Doctoral

Training.............................................................................................
118
....................................
119
38.
Inducement of Korean Scientists Abroad
39.
Population, Aged 14 and Over, By Educational Attainment
124
40.
Major Product Line-Up of SEC
....................................................
133
41.
SEC's Global Partners
....................................................................
135
42.
Technical Importation And Training (1971-1972)
43.
Trends of Industrial Property Application and Registration
159
44.
Technical Licensing and Assistance Agreement (1980-1985) ........
159
45.
Major Products Developed During 1980-1985
161
46.
Development of New Memory Devices
.......................................
167
47.
Technical Manpower At SEC
........................................................
170
48.
Technical Importation (1986-1987)
49.
Development of New Products (1986-1987)
50.
Chronology of Semiconductor Development After 1987
180
51.
SEC's Three-Tier R&D System
191
.........................
...............................................
.................................
.....................................................
ix
143
173
174
Table
52.
Page
R&D Manpower and Investment at SECs Consumer Electronics

Research Center ...................................................................
193
53.
Research Manpower at Semiconductor Research Center
..............
194
54.
The Status of Cooperative Companies...............................................
198
55.
The Categories of Industrial Network...............................................
214
56.
Koreas Industrial Structure, 1910-1940..........................................
232
57.
Business Ownership by Korean: 1939................................................
233
58.
Stages in South Koreas Industrial Development...............................
242
59.
Koreas Geographical Composition of Trade....................................
252
60.
Trend of Intra-Industry Trade Index With the USA and Japan In

Korean Manufacturing Sector.................................................
253
61.
Trend of IIT With Japan And the USA By Index Intervals..............
25 5
62.
Trend of IIT With Japan And the USA In Manufactured Goods By

Use ..................................................................................................
256
Trend of TSI With Japan and the USA in Manufactured Goods By

Use ...................................................................................................
257
TSI and IITI With Pacific Asian Trading Partners............................
259
63.
64.
LIST OF ILLUSTRATIONS
Figure
Page
1.
Relationships and Interaction in Industrial Markets........................
35
2.
Causal Relationship Between National System of

Innovation and International Network of Innovation
38
Integration and Cooperation Mechanism for Science and

Technology Policy .............................................................
91
4.
Mechanisms for Manpower Development
....................................
113
5.
System of Technical Qualification Test
........................................
116
6.
The Structure of SEC's Educational System
7.
Education System for R&D Personnel
3.
.................................
188
.........................................
196
8.
Chain of Relationships Between Two Subsystems ........................
207
9.
Elements of Regulationists Model ................................................
209
10. Relations Between Organizational and Technical Changes ............
211
11.
The General Framework of the Emulation Process ......................
212
12. Global Flows of Trade in the Triad, 1990 ......................................
227
13. Foreign Direct Investment Clusters ...............................................
228
xi
ACKNOWLEDGMENTS
When deeply immersed in the writing of a dissertation, one tends to think

that he is alone and no one but himself can determine his destiny. However, when
the dissertation is finally completed, one realizes that he was not alone along the
way and he attempts to find words of gratitude and appreciation for those who
provided him with their support and assistance in the course of writing it. I am not
an exception.
Among many persons who have rendered support and assistance to me, I
wish to express my deepest gratitude and appreciation to the members of my
supervising
committee. I am greatly indebted
to Dr. Haider Ali Khan, the
chairman of my committee. On both a professional and personal level, Dr. Khan

has been a great source of inspiration and encouragement. His continuous
guidance through valuable comments and suggestions at every stage of the study
was very crucial and instrumental for the completion of dissertation in its present
form.
Special thanks is extended to Dr. John Y. T. Kuark for providing
unselfishly of his time to make a thorough and meticulous review and give
invaluable comments throughout the dissertation. Dr. Kuark must especially be
recognized for his commitment to high academic standard in dissertation writing.
R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission.
I also indebted to Dr. Nawfal Umari for his valuable help and advice. His
suggestions and remarks made during the formative stage of this study made it
stronger and added more substance to its content.
Special thanks to Mr. Hyun-Gon Kim, Vice-President of Samsung
Electronics Company for allowing me to gain access to the companys internal
data.
Without the support, encouragement and understanding of my wife, Joung
Ok, this study would not have been possible. In time of my frustration and
exhaustion, she has always been there encouraging me with love and patience. Her
presence as an unselfish wife and caring mother of two children has motivated me
to overcome the mental and physical letdowns.
CHAPTER I
INTRODUCTION
Statement of the Problem

Why and how has only a group of the Asian Newly Industrializing
Countries (Asian NICs hereafter) represented by Hong Kong, Singapore, South
Korea and Taiwan become the center of growth and prosperity while most of
other developing nations are suffering from underdevelopment in recent years?"
This question has received considerable attention by economists as well as other
social scientists.
Various theoretical and empirical explanations have been
propounded to define the main factors behind the economic success of Asian
NICs. Yet these explanations are often partial and conflicting and there is no
generally accepted theory.1
!The two dominant theoretical explanations are: 1) Neo-classical explanation which
claims that Asian NICs have set their price right, that is, they have relied upon the price
mechanism to allocate resources in an efficient and growth-maximizing fashion through exportoriented outward-looking policies. The major proponents of this explanation include: Anne
Krueger (1984), Jagdish Bhagwati (1968), I. Little (1981), Nishimizu Mieko and Sherman
Robinson (1984), Donald B. Keesing (1967), and Ronald Findlay (1984). Many empirical
researches have been carried out to identify and validate the causal relationship between the
export growth and economic growth in Asian NICs and some of the representative empirical
researches were done by: Michael Michaely (1977), Bela Balassa (1978), William G. Tyler
(1981), Raslam Kavoussi (1984), Jung and Marshall (1985), W.H. Hsiao (1987), and Ni SungShen (1989); 2) Statist' explanation which emphasizes the important role the State has played in
the industrialization process. This line of arguments are proposed by: L.G. Reynold (1983), C.
Bradford (1987), M. Shahid Alam (1989), Meine P. Van Dijk (1990), Robert Wade (1990), and
Alice H. Amsden (1989). Alice Amsden, for example, claims that South Korea has
accomplished her economic success by a high degree of state intervention to get relative prices
wrong
" These explanations, though they seem plausible within the narrowly-defined
theoretical and empirical purview, are partial in nature because export-oriented outward-looking
policies and government interventionist policies can't be justified all along the developmental
phases in developing countries, but rather they are historically specific policy options. Some
other explanations are: 1) economic cultural explanations in which long-standing and pervasive
cultural attitudes and institutions are identified as the source of Asian NICs success (Clegg
and Reddings 1990); 2) dependency theory which argues that export-led industrialization
A similar question was posed by Clarence E. Ayres half a century ago as

to Why did the industrial revolution occur in Western Europe and in modem
times? Why not in China, or in ancient Greece?2 In his answer, Ayres observed
that technological innovation played the decisive role in establishing the institutions
of capitalism, and he concluded that the institutional adaptation to technological
change was the major contributing factor to the industrial revolution in Western
Europe.3
Technological change has long been viewed as a major force contributing
to the progress of human societies. However, only until recently economists have
been considering technological change as
an important source of economic
progress4 and, accordingly, the diffusion of technological innovation within the

economic system has been recognized as a central point for under-standing the
contribution of technological change to economic growth.5
strategies, such as those adopted by South Korea, prevent the development of an internally
articulated" self-expanding economy (Landsberg 1979).
2Clarence E. Ayres. The Theory o f Economic Progress (Chapel Hill: The University of
North Carolina Press. 1944), 129.
3"It is already clear that technological innovation played the decisive part in establishing
the institutions of capitalism. By making industry paramount in modem life, the industrial
revolution has made the captains of industry powerful.... The process o f institutional adaptation
to technological change is therefore tremendously important as well as subtle and complicated,
and special attention must be given to it." Clarence Ayres, ibid., 154.
4Some economists have empirically showed that in the traditional macro production
function, Q = / ( L, K), changes in capital (K) and labor (L) account only for a small proportion of
the changes in output (Q). Accordingly, the fraction of growth in Q, that is not explained by
growth in L and K, is referred to as residual and this productivity residual is interpreted as
'technical progress. For example, Simon Kuznet claimed that this residual factor accounts for
75-80 per cent of long-run growth. See Simon Kuznet. Economic Growth o f Nations: Total
Output and Production Structure (Cambridge, Mass: The Belknap Press of Harvard University
Press, 1977).
2
Research on the diffusion of innovation has been undertaken by some

economists in the Neo-classical quarter based on the macroeconomic assumption
that technological change is brought about exogenously and it is on average a
continuing process and evenly distributed. The traditional diffusion theory,
however, has been criticized for its assumptions of exogenous technology and for
relying too much on the behaviors of individuals and firms in analyzing the
diffusion. Therefore, the traditional diffusion theory can not explain the national
differences in the ability to innovate and diffuse technology.
Based on Schumpeters theoretical conceptions of dynamism and structural
change, a group of researchers have developed the idea of new technological
systems to capture the characteristics of technological change which are marked
by a distinct point of discontinuity and a period of spurt, creating a cluster of new
technologies that will bring about a fundamental (revolutionary) change in both
economic and social structures.
Accordingly, the process of technological
innovation and its diffusion is seen as evolutionary and which covers the entire
spectrum of economic and social structures. In addition, the unit of analysis of
technological innovation and diffusion has been widened from the individual/firm
behavior to encompass industry and the national economy as a whole.
Through Schumpeterian perspective, institutional innovation has thus
become a central issue in the diffusion of technological innovation - that is, the
diffusion of new technological innovation requires a new form of institution.
technological change is commonly regarded as a process involving three stages: The
first stage is the invention which is the generation of new ideas; the second stage is innovation
which covers the development of new ideas into marketable products; and the third stage is
difiiision which is the adoption of these products by the actors in and across the economies
(Schumpeter 1939). Among the three stages, the diffusion is the most significant stage because
it yields the majority of economic and social benefits.
3
However, technological and institutional innovations are being considered
as
interdependent and, therefore, an emphasis is being placed on the good-match

between technology and institution.
Based on this notion of fitness between technology and institution, a
concept of national systems of innovation has been proposed in recent years to
explain why and how particular nations have succeeded in producing so much
scientific invention and market innovation, leading to the diffusion and use of
technology, while other countries have had so many difficulties.
The national system of innovation has been defined as the network of
institutions in the public and private sectors whose activities and interactions
initiate, import, modify and diffuse new technologies.6 The national differences
associated with the ability to innovate and diffuse can thus be a result of
differences in the ability to efficiently adapt to changes within the technological
system.
This concept of national systems of innovation is a useful analytical tool for
understanding national differences in innovative capacity and has undoubtedly
eliminated the oversimplified views prevalent in the past concerning technological
innovation and diffusion. However, to assume the existence of national systems of
innovation implies that some meaningful and systemic integrity is possible at that
level and it naturally leads to a series of questions: 1) To what extent are such
national systems important and how are they interconnected in an increasingly
integrated and international world?; 2)
Are there
international systems of
innovation that dictate national systems of innovation?
These questions are
6See Christopher Freeman. Technology Policy and Economic Performance: Lesson

From Japan ( London: Printer Publisher. 1987), 1.
4
particularly relevant in view of the fact that the international diffusion of new
technological innovations is related to the changing location of international
technological and economic leadership and it may be viewed as a means for
developing countries to catch up with technological leaders. Therefore, what is
needed is an empirically relevant theory of international diffusion of technological
changes which combines the national systems of innovation that are specific to
countries at particular places at certain historical times with the global process of
technological innovation. This study is a modest attempt toward the development
of such a theory.
Purpose and Objective of the Study
The purpose of this study is to seek an answer to the puzzle of Korea's
and economic growth with special emphasis being placed on institutional
adaptations to new technological systems of a global nature. The objective of this
study is, therefore, threefold: 1) it will examine the characteristic features of the
Korean innovation system in terms of its efficiency in adapting to the changes of
technological system; 2) it will investigate the learning process of a representative
private Korean firm in terms of its organizational adaptation to the changing
technological environment;
and 3) it will attempt to understand the Korean
national system of innovation within the international context.

These objectives may be pursued by considering the following three major
categories:
1) Korean national system of innovation supporting technological
advancement in industry; 2) innovation system of a Korean firm building up

technological capability through learning and improvement; 3)
Korean national
system of innovation within the international networks of technological

innovations.
Korean National System of Innovation Supporting Technological

Advancement in Industry
The national system of innovation is closely related to the system of
production in which the experience of learning and making minor innovations is
the prerequisite of many radical innovations.7 To investigate and describe some
major characteristics of the Korean national system of innovation supporting
technological advancement in industry, attention will be given to identifying the
institutional ^features which can be considered to have been conducive to the
efficient evolution of a production system. The analysis will concentrate on the
following three features o f the system:
1. the role of private firms in improving technological capability;
2. the role of government in the formulation and implementation of
technology policy which provides appropriate institutional mechanisms
to advance industrial technology; and
3. social innovation conducive to the diffusion of industrial technology
Innovation System of a Firm Building Up Technological Capability

Through Learning and Improvement
Firms play a major role in the formation of a national system of innovation
because, among economic agents, they are in a position of
technological innovations in the production process.
exploiting
For the exploitation of
technological innovation, however, firms should be capable of mastering
7Esben Sloth Anderson and Bengt-Ake Lundvall, in Freeman & Lundvall (Eds.). Small
Countries Facing the Technological Revolution (London: Printers Publishers. 1988). 14.
6
technology and the technological capability of a firm should be built up in a

cumulative way. Therefore, the innovation system of a firm is closely related to the
level of technical learning. The analysis will concentrate on the technological
learning process of a representative Korean firm in terms of its organizational
adaptation to the changing technological environment and its strategies to improve
technological capability.
The Positional Characteristics of the Korean Innovation System Within
the International Networks of Technological Innovation
A national system of innovation does not exist in isolation. Rather it
interacts with other national systems of innovation in the global economy.
Therefore, in order to understand the Korean national system of innovation it
should be seen within the context of interaction among international networks of
innovation systems. This study will concentrate on the following aspects:
1.
the evolutionary changes in the international networks of innova

tion systems;
2.
the historical role and the positional characteristics of the Korean

national system of innovation as it interacts with the shifting
international networks in terms o f the technological niches that
could be exploited by institutional adaptations
Relevance and Significance
Korea suffered an almost complete destruction of her then feeble industrial

sectors during the Korean War8 and she had virtually no natural resources;
however,
despite not having had any hint of comparative advantages in
8It has been estimated that over 80 per cent of industrial and infrastructure facilities and
more than half the dwellings in Seoul were destroyed by the War. See. Song. Byung-Nak. The
Rise o f the Korean Economy (New York: Oxford University Press, 1990). 42.
7
international trade, Korea has recorded phenomenal economic growth performance

since the early 1960s and she emerged as one of the major exporters of
manufactured goods in the international market in the 1980s. At the initial stage,
Korean industrial growth was based on the production of low-technology, laborintensive goods-particularly textiles, which are still a leading export item.
However, increasing competitive pressures from next-tier Asian developing
countries including China and changing patterns in the international technological
system are forcing Korea climb up the technological ladder with greater
importance being attached to high-tech industries such as semiconductors,
computers, telecommunications, aerospace, genetic engineering, new materials and
robotics. Korea is already the third largest producer of memory chips and has
moved into second position behind Japan in consumer electronics.9
The technological capability which Korea has achieved in a relatively short
period of time provides a good case, both theoretically and empirically, for
investigating how it was possible and what were the factors behind it. Already
some researchers who put technological change at the heart of industrialization
have delved into these questions.
However, these studies have paid scant
attention to the institutional aspects of technological innovation within the context

of both the domestic and the international environment.10
9See Phillip Oppenheim, Japan Without Blinders: Coming to Terms With Japans
Economic Success (Tokyo: Kodansha International. 1992), 321.
10Larrv E. Westphal,, Yung W. Rhec and Gariy Pursell, Korean Industrial Competence:
Where It Came From, World Bank Staff Working Paper No. 469 (World Bank, July 1981); Larry
Westphal, Lin Kim and J. C. Dahlman, Reflections on Korea's Acquisition o f Technological
Capability, The World Bank Discussion Paper, No. 77 (World Bank, April 1984); and Kwon,
Jene K. and Kyhyang Yuhn, Analysis of Factor Substitution and Productivity Growth in Korea
Manufacturing, 1961-1981, in Korean Economic Development, ed. Jene K. Kwon ( Greenwood
Press. 1990).
8
This study is significant in that: 1) theoretically, it attempts to understand

the notion of a national system of innovation within the context of international
networks of technological innovation and thus contribute to developing a general
theory of international diffusion of technological innovation. It also provides a
theoretically plausible explanation for the economic puzzle of Korean success by
putting technological innovation and the concomitant institutional adaptations in
the center of the analysis; 2) empirically, the concept of a national system of
innovation has been applied to the cases of industrialized countries, but the case
of developing countries has not yet been thoroughly researched. Moreover, the
aspect of institutional adaptation to technological changes in Asian NICs as well as
in developing countries through field research remains to be empirically explored.
In this sense, this study may be seen as a cornerstone contribution to the empirical
research.
Major Working Assumptions and Methodology
Major Working assumptions
This study argues that technological and related social innovations are the
main sources of national economic growth. Therefore, it has been claimed that the
economic success of Korea can be attributed to the national system of innovation
that has been efficiently adapted to the changes in the international technological
system. This argument is based on the following major working assumptions:
First, technological innovation and diffusion are the major contributing
factors to the economic growth of a nation.
Second, the diffusion of technological innovation clusters along the
trajectories of new technological systems (styles) and each new technological
system demands institutional changes and adaptations.
9
Third, since institutional changes and adaptations are crucial for the
successful diffusion of new technological systems and that marked differences exist
in terms of physical environments, resource endowments, historical experience,
cultural traditions, societal structures, economic organization and political
practices among nations, the pace of diffusion may vary from country to country
and from region to region.
Fourth, the national system of innovation, the mechanism of institutional
adaptation of a nation to new technological system, does not exist in vacuum, but
rather it is closely interconnected with the international networks of innovation.
Methodology of the Study
Definition of Terms
In this study, the term institutions is defined as the behavior system that
regulates the interplay o f human actions to function as a mechanism fo r both

stability and change in the process o f economic progress. Under this definition,
an institution implies a system of regulation as well as a system of adaptation. The
system of regulation functions as providing norms and routines for stability in
society and it tends to show inertia to change. The system of adaptation, on the
other hand, functions as a frame of reference for change through learning and
innovating and this means that institutions themselves have to change. Institutional
adaptation is, therefore, an evolutionary process made possible by human action,
not by human design.11 If technological innovation is regarded as the major
contributing factor to long-term economic growth, then it is obvious that
institutional adaptation to technological innovation is an essential element.
11See Bjom Johnson ( 1988. 282).

10
The technological leapfrogging attained by Korea during the past three

decades is the dependent variable. Such technological leapfrogging will be
evaluated in terms of the level of technological knowledge, the indices of both
technology inputs (R&D) and technology outputs (industrial patent), and the
changes in the pattern of industrial structure.
Independent variables which are needed to explain Koreas technological
leapfrogging are the factors which contributed to institutional adaptations to global
technological changes. They are analytically categorized into two factors: 1) the
Korean national system of innovation; and 2) Korea's position in the international
networks of system of innovation.12
Models and Methodologies
Given
that
technological
innovation
and
institutional
innovation
(adaptations) are interdependent and complex processes, no analytical model can

easily be formulated to capture these processes as is often attempted in empirical
econometric researches based on a few simple assumptions. This means that the
explanations on the independent variables may have to be basically descriptive and
qualitative.
However,
it does not totally deny the usefulness of the quantitative
method in this study. Actually, available quantitative techniques13 will be em

ployed, when needed, to support the hypotheses formulated in this study.
Accordingly, the two quantitative methods applied are the statistical comparison
12These two factors are also discussed in page 5-7 of this study.
13There have been many attempts to analyze technological change within the framework
of economics which can be broadly categorized into four groups: 1) the production function
approach in which technical progress is measured as a shift in the production function; 2) the
input-output framework where technology is reflected in the input structure of an industry; and 3)
the analysis of R&D and patent acquisition ( Kimio Uno, 1989, 3)
11
method and input-output analysis.14 In addition, a case study is conducted by

selecting a representative Korean firm to evaluate its adaptive strategies along the
path of technological development.
Korean National System of Innovation: In an attempt to measure the level
of technological capability that Korea has attained in the past, a statistical
comparison method is applied to delineate indicators such as the stocks of
technological knowledge, major R&D activities, technological balance of pay
ment, and application for industrial property rights. An input-output analysis is also
applied to ascertain the nature of technological change in industrial sectors during
the 1970-1985 period.
The role of industry in the national system of innovation is investigated by
description and by employing the statistical comparison method. Descriptive
explanations cover topics including the channels of technology diflusion,
interaction networks between user and producer, R&D efforts, in-house training
and other issues related to technology management. These topics will be supported
with available statistical data.
In the evaluation of the role of government in the Korean national system
of innovation, basically descriptive explanation is applied in terms of the
technology policies formulated and implemented by the Korean government
including the Ministry of Science and Technology, technology policy as the central
element in industrial policy, and the governments capability in technology
planning and forecasting.
14Technological innovations, when diffused, will eventually be incorporated as inputs
into production process across the economy throughout inter-industiy transactions and, therefore,
technological innovation - changes in input coefficients - and the resultant changes in industrial
structures over time can be captured through input-output analysis.
12
In the sub-category of social innovations, descriptive and statistical

explanations are also employed. The descriptive explanations are centered on
education and training and statistical data used to support these explanations.
Koreas Position in the International Networks of Technological
Innovation:
The analysis of the evolutionary changes in the international
networks of innovation system is based on descriptive explanations in terms of

changes in major technological systems based on researches of technological
changes and supporting statistical data. The role of the Korean national system of
innovation in the international networks of innovation is investigated from a
perspective of the networking relationship with other nations national systems of
innovation and the analysis will be carried out using the intra-industry trade index
between Koreas major trading partner nations.
Source of Data
Indices of technological capability in Korea: The following statistical
indices are used in this study: 1) Korea Statistical Yearbook, Major Statistics o f
Korean Economy,
Monthly Statistics o f Korea, Census fo r Mining and
Manufacturing, and Monthly Statistics, and various issues published by Economic

Planning Board and Bank of Korea covering the research period; 2) The inputoutput tables on Korea for the years, 1970, 1975, 1980, 1985 and 1975-19801985 Link Input-Output Tables, published by The Bank of Korea; 3) Yearbook o f
Labor Statistics, various Issues by the Ministry of Labor, Korea; 4) Science and
Technology Annual, various Issues by the Ministry of Science and Technology,
Korea; 5) Yearbook of Education Statistics, various issues by
Ministry of
Education, Korea; and 6) Patent Statistics published by both the Office of Patent
13
Administration, Korea and the Patent and Trademark Office of the U.S.
Department of Commerce.
Korean National System of Innovation: The analysis is based on the
research material published both in Korea and overseas. Particularly, the surveys
made by both The Korea Development Bank and Korea Industrial Technology
Promotion Association with regard to technology imports and management of
Korean industry
are used, these include: 1) An Analysis on the Effects o f
Technology Imports (in Korean) published by The Korea Development Bank in

September, 1991; 2) Annual Survey on the Current Situation o f Industrial
Technology Development (in Korean), 1986-1991, Annual Survey on the Trend

o f R&D Investment and Research Personnel o f Major Firms (in Korean), 19871991, and a Survey on the Current Situation o f Technology Transfer(1989),
conducted by the Korean Industrial Technology Promotion Association.
The Positional Characteristics of Korean Innovation System Within
International networks of technological innovations: The following data are used:
1) Trade Statistics (in magnetic tape form) compiled by the Korea Traders
Association; 2) UN and other international statistics including those compiled by
the IMF, IBRD and OECD.
Limitation of the Study
The major limitation in conducting a research on the international diffusion
of technological innovation is how to measure the level of intensity within
technological developments of a country vis-a-vis other countries because the
process of technological innovation and diffusion is complex and multidimensional
and internationally comparable and required statistics to measure technological
14
development do not exist.15 Moreover, the process of institutional adaptations to

the technological innovations can not be explained in a simple model,
consequently this study is based primarily on descriptive explanations with some
available quantitative technique available to support them. The application of the
nonlinear dynamic model
developed in natural sciences makes it possible to
capture the complex process of interdependent nature, but it is only applied

heuristically in this study.
Another limitation in this study is that only the case of Korea is considered
in evaluating the national systems of innovation. Given that national systems of
innovation are closely interconnected with each other and that they are
characterized by a networking relationship, including all other Asian NICs in the
analysis would have been more appropriate from a theoretical viewpoint.
Structure of the Study
This study is composed of three major parts: the first part (chapter I) deals
with the theoretical discussions related to the methodology of analysis; the second
part (chapter III, chapter IV, chapter V and chapter VI) applies the theoretical
frameworks laid out in the first part to the explanation of Korea's technological
leapfrogging; and the third part (chapter VII) serves as summary of the study and
provides policy implications.
In Chapter II, a critical analysis is made on the theoretical approaches
concerning the diffusion of technological innovation. With emphasis being placed
on the dynamic and systemic nature of technological innovations, the neoclassical
15Some attempts have only recently been undertaken to compile technological data by
international organizations. OECD has developed a technology transfer data bank and the
Economic Commission for Europe (ECE) has set up a data bank for intra-EEC technology
transactions. Howev er, they are only related to OECD countries.
15
theory of technological diffusion, the theory of national system of innovation and

the theories of international diffusion of technological innovations are compared.
Moreover, each theory is critically analyzed in terms of its adequacy and
theoretical limitation. An attempt is made to develop a new theoretical perspective
in international diffusion of technological innovation by combining the concept of
national system of innovation with the notion of network.
In Chapter III, the level of Korea's technological capability is measured
using such indices as the stock of technological knowledge, major R&D indicators,
technological balance of payment, statistics on industrial property rights, and the
changing patterns of its industrial structure.
Chapter IV examines the characteristic features of the Korean national
system of innovation. This chapter attempts from a macro perspective to identify
the unique institutional features of the Korean national system of innovation that
contribute to the efficient evolution of a production system. Institutional features
include the role of private firms in improving technological capability, the role of
government in the formulation and implementation of science and technology
policy, and the social environment conducive to the diffusion of technological
innovation.
Chapter V is a case study. A representative Korean private firm has been
selected to investigate from a micro perspective its development pattern in terms
of organizational adaptation to the changing technological environment and the
strategies it has adopted to improve its technological capability. The investigation
emphasizes the firm's accumulation of technological capability through learning
and improvement.
16
Chapter VI analyses the relationship between the Korean national system of

innovation and the international networks of innovation. It first looks into the
evolutionary changes in the international networks of innovation system. The
subsequent section deals with the question regarding the role and position of the
Korean national system of innovation in the shifting international networks of
interactions in innovation activities.
The final chapter summarizes the results and concludes with several
findings. Additional comments and suggestions are made regarding the scope of
further research and policy implications. Appendices supporting chapters are
placed before the selected bibliography.
17
CHAPTER n
A CRITICAL ANALYSIS OF THE THEORIES OF THE DIFFUSION OF
TECHNOLOGICAL INNOVATION
Economic Theories of Technological Diffusion

In the analysis of technological change within the economic system, the
analysis of the diffusion of innovation has obtained a central position for
understanding the contribution of technical progress to economic growth since the
pioneering studies of Griliches (1957) and Mansfield (1961). While they have
developed the theory of innovation along two different paths,1 both of them share
similar concern with adoption behavior and focus on similar models of the
diffusion process over time, relying heavily on the mathematical theory of
epidemics. Accordingly, most research on the diffusion of technological innovation
has concentrated on the adoption and refinement of the epidemic model and it
has mostly focused on the theoretical arguments explaining S-shaped logistic
curves and on the determinants of the speed of diffusion.
While this epidemic diffusion model offers substantial advantages in
understanding the economic characteristics of innovation and its adoption by
measuring the speed of diffusion, it has been criticized for its implicit assumptions
regarding diffusion patterns: 1) the diffusion process is seen as static, in which both
innovation and the adopting environment remain unchanged while diffusion
proceeds; 2) the diffusion process is reduced to a pure demand phenomenon; 3)
the model is based on the assumption that technological change is brought about
^Griliches has focused on the diffusion of innovation adopted by household or
individuals and Mansfield has studied the diffusion of innovation among firms.
18
exogenously and it is on average continuous and evenly distributed; 4) it relies too

much on individual and firm behaviors. Out of these criticisms, several alternative
models o f difiiision have been developed. P. David (1975), S. Davis (1979), and
P. Stoneman (1984) have introduced inter-firm differences in their diffusion
models. P. David, for example, has applied Probit Analysis to the analysis of
inter-firm diffusion where an innovation can be considered as a stimulus for a
firm.2 Most criticism on the standard difiusion model, however, came from NeoSchumpeterian difiusion researchers. They developed the notion of clusters of
innovations, or so-called new technology systems. They claim that clusters of
innovations will bring in follow-up innovations made during the diffusion period,
and these follow-up innovations are linked to the rapid growth of new industries
and they might provide the ingredients needed for an upswing in overall macroeconomic growth.
According to their propositions, a new innovation cycle
originates from the emergence of a new technological paradigm, defined as a

pattern of the solutions to selected technological problems, based on selected
principles derived from the natural sciences and on selected material technologies
(Dosi, 1982). Inherent in the notion of technological paradigm is that genetic
premises are there, influencing the development of the innovation cycle. In other
words, the evolution of technology is guided by technological imperatives
(Rosenburg, 1976) and moves along natural technological trajectories (Nelson and
Winter, 1977) mainly composed of generic technologies (Sahal, 1983). All these
concepts imply that the freedom of technological decision-making of firms will not
2The central assumption of the probit model is that each firm has a critical level of
stimulus and will adopt an innovation only when the stimulus represented by the innovation
itself exceeds the critical level. Accordingly, the problem is to define the stimulus and the critical
level. In Davids difiusion model the critical level is defined by firm size, that is, the adoption of
the innovation will be profitable only for a firm above a given size.
19
be infinite but that, on the contrary, there will be constraints limiting the range of
technological options open to firms at most times (Rod Coombs et al, 1987, 118).
The Neo-Schumpeterian diffusion researchers also noticed that there exists a
similarity between the S-shaped diffusion pattern in the epidemic model and the
growth pattern of industries depicted by Schumpeter (1939, 1942). The New
Technology System of Freeman et al. (1982) is a concept developed to link the
two theories in their analysis of the diffusion of innovation. They believe that some
changes in technology systems are so far-reaching in their effects that they have a
major influence on the behavior of the entire economy. These are tantamount to
the creative gales of destruction which are at the heart of Schumpeters (1939)
theory of long cycles in economic development. Carlota Perez (1983), in
particular, sees long waves as not a strictly economic phenomenon, but rather the
manifestation, measurable in economic terms, of the harmonious or disharmonious
behavior of the total socioeconomic and institutional system on the national level.
Perez proposes that capitalism contains two subsystems: techno-economic
subsystem and socio-institutional subsystem. According to Perez, long waves
involve both subsystems and are seen as successive phases in the evolution of the
total system. Each phase in the evolution of an economic system is marked by a
technological style based on a constellation of interrelated innovations. A
technological style generates a dynamic complementarity of economic and
social/institutional factors that sustains the long upswing until the technological
style approaches the limits of its potential, culminating in a structural crisis.
The Schumpeterian model can be seen as a qualitative step forward in that
the focus o f attention on the analysis of innovation diffusion has shifted from
individual/firm behavior to the national economy and industry as a whole. It has
20
also enriched our understanding about the process of innovation difiusion by

placing emphasis on the importance of
the institutional aspect within it.
Accordingly, differences in growth rates over time are seen as a result of

differences in fitness between technology and institution. However, the problem
of this approach is that, while technological change and institutional change are
seen as interdependent, technological change is considered as dictating institutional
change, that is, institutional change always catches up with technological change in
a mechanistic way. Moreover, there still remains an unanswered question regarding
the uneven distribution of national capabilities in technological innovation and
diffusion.
National systems of Innovations
Recently, many innovation researchers have turned their attention to the
question of why and how particular nations have succeeded in producing so
much scientific invention and market innovation, leading to the difiusion and use of
technology while other countries have had so many difficulties (McKelvey, 1991).
As an explanation to this question, a concept of national systems of innovation
has been developed by a group of researchers and it is based on the dynamic nature
of technological innovation and the resultant structural changes.
Major Proponents of National Systems of Innovation
The representative researchers who have applied this concept are Michael
Porter (1990), Christopher Freeman (1987), Bengt-Ake Lundvall (1985, 1988)
and Richard Nelson (1982).
Michael Porter
Porter was interested in the question: Why does a nation become the base
for successful international competitors in an industry?.... Why is one nation often
21
the home for so many of an industry's world leaders? (Porter 1990, 1.). Porter
sees it impossible to analyze general national differences and argues that, for a
meaningful analysis, focus should be placed on only specific, successful industries
in a country. He argues that existing resources and technology are no longer the
sources o f comparative advantage and that companies create competitive
advantage through innovation.3 Porters criteria for measuring the comparative
advantage of firms and countries are productivity and growth.4 According to
Porter, there are four determinants of national advantage: 1) Factor conditions- the
nations position in factors of production, such as skilled labor or level of
infrastructure, which are necessary to compete in a given industry; 2) demand
conditions- the nature of domestic demand for the industry's product or service; 3)
related and supporting industries- the presence or absence in the nation of supplier
industries and related industries that are internationally competitive; and 4) firm
strategy, structure, and rivalry- the conditions in the nation governing how
companies are created, organized, and managed, and the nature of domestic rivalry
(Porter 1990, 7-8).
Christopher Freeman
Freeman draws his insights on both
Schumpeters dynamic analysis
involving radical technological changes and the resultant structural changes and
Kontratiev's work on long waves. Following Carlota Perez (1985), he argues that
the basis for an upswing in long waves is found in changes in the techno-economic
3For Porter, innovation can be technical or organizational, or be a new way of doing
things' and can be radical or incremental.
^'The principal economic goal of a nation is to produce a high and rising standard of
living for its citizens
The only meaningful concept of competitiveness at the national level is
national productivity" (Porter 1990. 6).
22
paradigm which is based on the creation and difiusion of radical innovations5

containing new productive potential and redefining technical and economic
efficiency, thereby affecting production in all sectors of the economy. The
downswing occurs when the innovative and productive potential of the old radical
(or base) technology runs out. At the bottom of each cycle there is a mismatch
between the existing institutions and the emerging dominant technology and its
paradigm. The long-term, structural economic booms and busts of capitalist
economies are thus explained in terms of the interaction between radical
technological developments and institutional structures. Freeman differentiates and
analyses countries in terms of how well they have adapted to the new socioinstitutional paradigm brought by waves of radical technology. National systems
flexible enough to adjust their socio-institutional paradigms to new requirements
during downswings are seen to be leaders in the new upswings.
Bengt-Ake Lundvall
Lundvall also stresses the dynamic nature of economic activity. He
attempts to go beyond abstraction and truly compare national differences in
innovative capacity and in economic performance. Lundvall places emphasis on the
economic process which aids the creation and diffusion of innovation. He argues
that user (buyer) and producer (seller) interactions are extremely important for
innovation and
that such interactions enable the actors to leam and hence
innovate. Thus, for Lundvall, the national system of innovation is a cumulative

5Freeman defines four categories of innovations: 1) Incremental innovations which refer
to small changes resulting from the production process or from users; 2) Radical innovations
which involve novelty and discontinuous development, usually the results of R&D; 3) Changes in
the technological system which combine radical and incremental innovation with organizational
and managerial innovation; and 4) Changes in techno-economic paradigm which refer to
changes in the meta-paradigm that affect all sectors of the economy, as well as leading to the
creation of new products and new industries. See Freeman ( 1987). 60-65.
23
process of learning by producing, learning by using and learning through the

interaction of producers and users. He argues that each country has its own
specific system of innovation, based on existing institutions, historical resources,
industrial development and key sectors, and the structural determinants of
innovation in a country are its institutions and its production structure.
To
Lundvall, institutions are seen as vital in their role of regulating economic activities
including innovation.6
Richard Nelson
Nelson proposes that technology exists in different forms such as coded
information, public knowledge, privately owned knowledge or artifacts.
Technology is, therefore, embedded in the social relations of the firm (Nelson
1981). Thus social institutions7 are important in the innovation process and the
traditional R&D system and they are vital to producing and spreading a
knowledge. Nelson argues that nations differ in their mix of industries and these
inter-industry differences strongly influence the shape of the national innovation
systems because there are differences between nations in the composition and
structure of other institutions.
As noted above, the definitions of the national system of innovation vary
among the four researchers depending on their conceptions of technology and
6Lundvalls definition of institutions refer to both formalized rules and organizations

and non-formalized rules or norms. Important institutions for the national system of innovation
include regulation of the labor market and of the monetary' system, problem-solving procedures,
and the common historical experience of industrialization.
7Elements of this include: the character and effectiveness of a national system of
schooling, training and retraining, work relations such as the pattern of labor - management
bargaining and negotiation, dispute resolution, characteristics of financial institutions, and the
way firms are organized and controlled.
24
technological change.8 However, the basic assumptions underlying this concept

are that national differences do exist in terms of markets, institutions, and
mechanisms for introducing and selecting innovations, and that they each legitimize
a level of analysis above that of the individual or firm.
The concept of national systems of innovation has certainly offered a more
plausible theoretical explanation on the differences in the technological capabilities
and the resultant differences in economic performances. However, the techno
logical development of nations has never been entirely a result of an internal
generation of innovations. On the contrary, most countries acquired much of their
technology from abroad. This phenomenon increased particularly with the rise of
capitalism and the concurrent industrialization processes and it is even more
pronounced today. Thus, given the existence of national systems of innovation, we
are faced with a series of questions: 1) To what extent are such national systems
important and how they are interconnected with each other in an increasingly
integrated and international world?; and 2) Are there international systems of
innovation that dictate national systems of innovations?.
Theories on the International Diffusion of Technological Innovation
It has almost become a historical truism that the international diffusion of
technological innovation has been a major factor behind the economic growth of
most industrial countries and that it is closely related to the changing location of
international technological and economic leadership and changes in the
8For a detailed discussion of each researchers conception of national systems of

innovation , refer to Maureen McKelvey, How Do National Systems of Innovation Differ?: A
Critical Analysis of Porter, Freeman, Lundvall and Nelson. in Rethinking Economics: Markets,
Technology and Economic Revolution, ed. by Geoffrey M. Hodson et al (Brookfield, VM:
Edward Elgar, 1991), 121-134.
25
international division of labor. The importance of international difiusion of

technological innovation has long been recognized in the economic literature of
international trade, economic development and international transfer of
technology. The following paragraphs outline some representative theories on the
international aspects of technological innovation and difiusion:
Technology Gap/Catching Up Theory
During the post-war period, the pattern of world trade experienced deep
structural change. Meanwhile, the traditional theory of international trade based on
comparative advantage/factor proportion hypotheses was incapable of providing a
satisfactory explanation of the observed patterns of commodity trade. Posners
(1961) seminal paper opened the way to a substantial revision of the established
theory. Starting from the proposition that an innovating firm may enjoy a
monopoly as an exporter from the country of origin at least until imitators come
into the market, he developed a set of concepts which became the basis for various
technology gap theories9 of foreign trade.
Hufbauer (1966) provided an excellent empirical illustration and validation
of Posner's theory with his study of international trade in synthetic materials. He
recognized that as a new technology matured, traditional cost elements could
become increasingly important so that low-wage trade could overcome the
technology gap created by mature technologies. The technology gap/catching up
theory has been further developed by S. Gomulka (1970), R. Findlay (1978), H.
W. Singer and L. Reynolds (1975), and J. Cornwall (1977). Gomulka argues that
9The theoretical foundation of this approach may be found in the works of T. Velven
and A. Gerschenkron. See T. Velven, Imperial Germany and the Industrial Revolution.
(London, 1915);
A. Gerschenkron, Economic Backwardness in Historical Perspective
(Cambridge. 1962).
26
the effects of technology import on the technological build-up of the recipient

nation and the resultant economic growth will depend primarily on the size of
transfer flows and the size of the relevant technology gap vis-a-vis the supplying
nations. Singer and Reynolds argue that within the group of western style
industrial countries the process of catching up by those with initially lower per
capita GNP explains a good deal of the differential increase in the manufacturing
sector and the process is associated with the difiusion of technology. Findlay
proposes that the effects of technology import tend to phase out with the catching
up process and he claims that foreign investment by the transnational corporation
has a positive impact on the catching up process. Cornwall offers a somewhat
different perception of the relationship between catching up and the technology
gap. Assuming that the primary cause of rapid growth is the ability of countries to
borrow technology from industrial leaders, Cornwall emphasizes that this ability is
not only a function of the technology gap, but also of the existence of an
entrepreneurial class keen and eager to exploit the available world stock of
technology. Within the same boundary of technology gap/catching up theory,
more recent researchers have emphasized the significant advantages of
late
industrializers both in terms of catching up with present technological leaders and

in terms of acquiring foreign technology at a more competitive price ( Luc Soete
1985; Alice Amsden 1989).
Even though the technology gap/catching up theory offers a better
explanation of the observed pattern of trade and national differences in
technological capabilities, it can be criticized for its simple assumptions that
technological knowledge is equally and freely available to all comers and catching
up is an easy and almost costless process. In reality, technological knowledge is
27
not a public good as is often assumed,
and catching up and narrowing the
technology gap is like aiming at a moving target. Moreover, it poses a tremendous

problems for imitators and aspirants for technological leadership. It can also be
criticized for its failure to recognize the institutional aspects of technological
change in both domestic and international environments.
Theory of Technological Dependency
Originally, this theory has its root in a study by the structuralists10 who
offered their interpretation of the historical evolution of Latin American
economies. Its leading proponents include such renowned scholars as C. Furtado,
F. Sagasti and R. Prebisch. Celso Furtado, for example, argues that development
and underdevelopment should be considered as two aspects of the same historical
process involving the creation and the spread of modern technology (Furtado
1970). Underdevelopment is, therefore, a consequence of the impact of technical
processes and the resultant international division of labor.
The theoiy of technological dependency is a radical version of the
structuralist view. The principal contention of this theoiy is that the import of
foreign technology from the developed countries does not serve the purpose of
decreasing technological dependence, but results rather in perpetuating and
strengthening it.
They argue that both the nature of technologies which are
available for the developing countries, as well as the contractual conditions

prevailing, are highly inconsistent with the needs and possibilities of the developing
world. According to this theory, the only way of getting out of this dependency is
10They are called structuralists because they argue that Latin American countries must
reconstruct their economic structure, formulate proper employment policies, and achieve a
minimum technological autonomy.
28
to adopt an autonomous development policy combined with the development of

indigenous technology, tailored to their internal conditions (T Baumgartner 1980 ).
The theory of technological dependency has broadened and deepened our
understanding of the relationship between imported technology and local
technological development. It challenged the universal validity of the technology
gap/catching up approach, and drew special attention to the asymmetric power
relations in the contemporary world and its influence on the international flow of
technology. It also gave importance to local technological capacity as a pre
condition for a smooth intake of foreign developed technology. A major criticism
of the theory is that it is basically negative in its argument and does not provide
any reasonable alternatives. Another criticism can be made against the dependency
theorists ahistorical understanding of the process of technological development.
In modem times, the process of technological development is not a random
process in which choice and diffusion of alternative technologies is widely open to
every country. For developing countries, in particular, technological choice is to
some extent limited and technological autonomy is not a goal easily attainable due
to the characteristic features of network externalities and technological lock
in11 in the process of technological development and diffusion.
Theory of Long Waves and Technological Innovation
Both the technology gap/catching-up theory and dependency theory have
provided evidence that technology-broadly defined-has played a very important
role. However, they did not show why it is that in certain historical periods
11These features are taken up by Paul David (1990) and Brian Arthur (1988).
29
particular countries tend to do exceptionally well in industrial performances

including exports. They also do not explain why shifts in world technological
leadership are not randomly distributed across industries or among various
industrial countries or in proportion to their earlier shares of world production or
world trade, but rather occur in waves or long historical periods. Also, they do not
explain why, in the process of catching up with the world technology leaders,
only a few countries have succeed. These questions were taken up and partially
answered by long wave theorists.12 It is generally accepted among most long-wave
theorists that long wave phenomenon is related to the capitalist world economy.
They believe that the world economy is a single-world capitalist system and the
structural changes in individual economies are interrelated with this single world
economy and they mutually determine each other. The international diffusion of
new technological innovation plays an important role in this process of structural
transformation within the capitalist world economy. Long wave theorists claim that
technological innovations have spread in waves and certain nations or regions
have emerged as a growth center in the expansion phase of new technological
innovations. This wave-like movement of technological innovation is based on the
12In the long wave theory, no consensus exists on the central issue: the existence of long
waves, their scope, and their causal dynamics ( Joshua S. Goldstein 1988, 23). However, a
general agreement seems to have been reached on the important role played by technological
innovation except the different positions taken by the technological innovation either as an
endogenous factor or as an exogenous factor of long waves.
30
concept of Kontratiev Long-Wave.13 It was Joseph Schumpeter (1939) who

revived interest in the Kontratievs theory of long waves. Schumpeter explained
the Kontratiev cycle as the effect of periodic technological revolutions which
transformed the basis of capitalist production. He related the first Kontratiev to
innovations in iron-smelting and the mechanization of the cotton industry; the
second to steam power, the railways and Bessmer steel; the third to electric power,
the chemicals and synthetic materials industries and the beginnings of the motor
industry. Neo-Schumpeterian long wave theorists14 have subsequently related the
fourth and most recent Kontratiev Long-wave to innovations in the electrical,
petro-chemicals and motor industries. They predict a future fifth Kontratiev
Long-wave related to innovations in microelectronics and other areas. The long
wave theorists have provided more theoretically plausible explanations on the
uneven distribution of technological capabilities among nations and regions and
the changing patterns of technological leadership and the international division of
labor. However, the problem of the theory of long waves is that it is too
mechanistic in that technological changes always dictate institutional changes, not
13The approach draws on the work of Nikolai Kontratiev in the 1920s who discovered
long, fifty-year waves of economic expansion and contraction in capitalist development, reflected
in the movements of commodity price data since the late 18th century. The first of these waves
was represented by the Industrial Revolution in Britain during the first half of the 19th century:
the second by the rapid rise o f Continental industry from the 1850s: the third by the imperialist
expansion led by Britain. Germany and the US in the late 19th century ( Michael Marshall 1987),
3.
^Representative theorists are W. W. Rostow. J. Forrester. C. Freeman, E. Mandel and
G. Mensch.
31
vice versa. It also does not provide a clear answer to question o f how individual
countries, particularly developing countries, are related to the new technological
system in each phase of a long wave.
The Search for a New Theoretical Framework for International Diffusion of
Technological Innovations
The Need for a New Theory
The existing literature on the international aspects of technological
innovations and diffusions does not provide a theoretical framework explaining the
basic relationship between the international diffusion of technological innovation
and the national innovation systems. As the preceding literary review indicates, the
theoretical concepts on the international aspect of technological innovations are
partial in their explicatory powers, ranging from voluntarism to functionalism.15
What we need is a theory which combines the specifics of what is happening to an
individual country or a group of countries at particular places at certain historical
times with the global processes that are restructuring social, economic, and
political reality. In other words, an acceptable theoretical model must recognize
the changing spatial and temporal settling of technological systems in the world
economy and develop meso-level concepts to adjudicate between macro-scale
structural forces and micro-level factors.
Network Approach: A New Theoretical Framework
The international diffusion of technological innovation can therefore be
captured theoretically in the network relationship among national systems of
15That is, actor and structure are placed at opposite ends of a continuum, where the
actor perspective (technology gap/catching-up theory ) emphasizes the free will of individual
while a structural perspective emphasizes supra-individuals' actions. See Maureen McKelvey
(1991. 120).
32
innovation.
This section first discusses the basic assumptions of network
approach16 as a theoretical framework in explaining the interactive relationships

between and among firms in industrial markets, and then, the assumptions will be
extended to include the interactive relationships in national systems of innovation
between and among nations.
Basic Assumptions in Industrial Network Model17
In industrial systems, firms are dependent on each other as members within
the networks of production, distribution, and use of goods and services. Within
the networks, each firm engages in a division of work. This means that a firm's
activities are to be coordinated and coordination is achieved through interaction
among firms in the network. Networks are both stable and changing. They are
stable because individual business transactions among firms usually take place
within the framework of an existing relationship. Those existing relationships are
changing all the time while establishing new relationships through interaction
among the firms in connection with the transactions made within the relationship.
Despite the changing nature of the network relationships, however, most
exchanges take place within earlier existing relationships. Accordingly, a firm's
activities in industrial markets is a cumulative process in the sense that
16The networks notions and methods were introduced by a few social and behavioral
scientists in the first half of the twentieth century to help describe and measure regularities in
social relationships. By the early 1970s, network terms, models and methods were being applied
by a very large number of social scientists in diverse way which include diffusion of innovations
(Holland and Leinhardt 1979, 1). For the detailed discussion of networks paradigm, refer to
Samuel Leinhardt (1977), Peter V. Marsden and Nan Lin (1982). and Barry Wellman and S. D.
Berkowitz (1988).
17This section is adapted from Jan Johanson and Lars-Gunnar Mattsson, "Inter
organizational Relations in Industrial Systems: A Network Approach Compared with the
Transaction-Cost Approach," International Studies o f Management & Organization, Vol. XVII,
No.l (1987), 34-48.
33
relationships are constantly being established, maintained, developed, and broken

in order to give satisfactory, short-term economic returns and to create positions
in the network that will assure the long-term survival and development of the firm.
Because of the cumulative nature of the market activities, the position of a firm in
the network characterizes its relations to others. The firms position is a result of
earlier activities in the network, both by the firm and by other firms, and it
constitutes the base that provides the development possibilities and constraints of
the firm in the network. At each point in time, the firm has certain positions in the
network. Since the development of positions takes time and effort, and since the
present positions define opportunities and constraints for the future strategic
development of the firm, the firms positions in the network is a partially controlled
and intangible, market asset.
Figure 1 shows the basic inter-firm relationships and interaction in the
exchange processes. Inter-firm relationships are characterized by mutual
orientation of the firms. Mutual orientation of the firms implies that firms are
prepared to interact with each other and expect each other to do so. It also implies
that the firms have mutual knowledge about each other and that they respect each
other's interests. Relationships result in investments forming long-lasting bonds
between firms, thus making the firms increasingly dependent on each other. Mutual
interaction is an important aspect of the exchange process.
A lasting relationship emerges if the parties perceive a certain complexity
or heterogeneity in the exchange. The exchange processes can be social, businessoriented, and informational. The social exchange process implies that the
relationships have an important social element in which trust is required. In
industrial networks, business exchange is an important aspect of
this social
34
exchange processes. But the exchange processes have important technical,

logistical, knowledge, administrative, and time elements as well.
The exchange
process is an adaptation process. The parties adapt to each other and influence
each other toward adaptation. Firms can adapt to each other technically by
modifying products, production processes, or routines.
FIGURE 1
RELATIONSHIPS AND INTERACTION IN INDUSTRIAL MARKETS
RELATIONSHIPS
INTERACTION
Mutual Orientation
- Preparedness to interact
- Mutual knowledge
- Respect for each other's interests
Investments
Bonds
Dependence
Exchange Processes
- Social exchange
- Business exchange
- Information exchange
Adaptation Processes
- Products
- Production
- Routines
Source: Jan Johanson and Lars-Gunnar Mattsson (1987), 38.
Up to now, we have discussed the basic features of industrial networks

within the purview of a closed economy. We shall now expand our discussion to
include the international interaction of national industrial systems. In the network
approach, a firms development activities are dependent on the relationships with
other firms, and thus on the network positions of the firm. Since international
expansion is a process by which network positions are established and changed,
international expansion as such influences the further development of the pro35
ducts,
production processes, and marketing behavior.
From a national
perspective, every nation has a role in a system of exchange relationships. This

role is not decided once and for all by the nation, but develops over time through
interaction with other nations. It is continually changing through the interaction
processes, but it is also strictly constrained by the network structure in which
interaction takes place. Thus, the strategic position is more or less determined
given the historical role in the network. This view by no means assumes, however,
that
the characteristics of
the relationships are determined by structural
circumstances. There is always some discretion concerning which relationships to

develop in what respects, and to that extent the view is voluntaristic. On the other
hand, the possibilities for changing relationships through unilateral decisions are
rather limited, as the relationships are created and modified through the interaction
of a number of nations.
Interactive Relationships of National Systems of Innovation
Innovation is also an interactive process. Innovation is, by definition, the
creation of qualitatively different, new things and new knowledge. The creation
and adoption of innovations involve uncertainty and learning process. The
assumption of innovation as an interactive process, is radically different from the
basic Neo-classical assumptions of homogeneously, perfectly, rational agents and
pure markets.18 The concept of national systems of innovation is, therefore,
18The existence of different national systems of innovation requires a radical revision of

the basic Neo-classical assumptions: in Neo-classical world where all agents are perfectly
rational and all transactions take place in pure markets, with anonymous relationships between
buyers and sellers, national borders would play a limited economic role, and, in such a world,
institutional and cultural differences between nationals would not interfere with the economic
process and structural differences would reflect nothing but historical investment decisions.
36
basically different from the traditional theories of technological innovation in the

sense that the former emphasizes interactive exchange relationships among
different national systems . What makes national systems of innovation important
is that the organized markets of the real world may be organized differently in
different national systems and that the behavior of agents, rooted in different
systems, may be governed by different rules and norms.
Because of the existence of different national innovation systems which
are governed by different rules and norms, the concept of national systems of
innovation can be more cogently captured in the interactive network relationships
among different national systems. The causal relationship between the national
system o f innovation and the international networks of innovation is shown in
Figure 2.
The important point to emphasize in the relationship depicted in figure 2 is
that each nation has a strategic niche to exploit according to its position in the
networks and its national industrial activities. The network position is constantly
being formed and changed through the interaction processes of international
diffusion and adoption of technological innovation, but it is also constrained by
the network structure in which interaction among national systems of innovation
takes place. Thus, a nations strategic niche in a national system of innovation is
Bengt-Ake Lundvall. "User-producer relationships, national systems of innovation and

internalization, in Dominique Foray and Christopher Freeman (eds.), Technology and the
Wealth o f Nations: The Dynamics o f Constructed Advantage (London: Printers Publishers.
1993). 277.
37
dependent upon the historical role it has played in the network - that is, the nation's
position in the network is path-dependent.
FIGURE 2
CAUSAL RELATIONSHIP BETWEEN NATIONAL SYSTEM
OF INNOVATION AND INTERNATIONAL NETWORK OF INNOVATION
Strategic
Niches
- pathdependent
------------------------
Interaction
Processes
(Diffusion
and
Adaptation)
Inter-country
Relationships
National
Industrial Activities
Chapter Summary
This chapter has theoretically reviewed the literature concerning the diffu
sion of technological innovation. The traditional Neo-classical theory of innova
tion diffusion was criticized for its unrealistic assumptions about technology and
for overemphasizing individual and firm behavior. As an alternative theoretical
framework, the Neo-Schumpeterian theory of technological diffusion has been
reviewed. The Schumpeterian model has made a qualitative step forward in
explaining the process of innovation diffusion in the sense that the focus of
38
attention on the analysis of innovation difiusion shifted from individual/firm

behavior to the national economy and industry as a whole and that the importance
of institutional aspect was recognized in the process of innovation difiusion.
Despite its theoretical improvement in capturing technological innovation as a
dynamic and systemic process, the Schumpeterian model could not answer the
question regarding the uneven distribution of national capabilities in technological
innovation and difiusion.
As an explanation to the existence of uneven distribution of national tech
nological capabilities and the resultant economic growth, the concept of national
systems of innovation has been developed based on the dynamic nature of
technological innovation and the resultant structural changes. The basic
assumptions of this concept are that the organized markets of the real world are
organized differently in diverse national systems and that the behavior of agents is
governed by different rules and norms as it is rooted in different systems.
The concept of national system of innovation has turned out to be a useful
analytical tool for understanding national differences in innovative capacity.
However, a nations system of innovation cannot exist in vacuum. Rather it
interacts with other national systems of innovation within global networks. The
existing literature on the international aspects of difiusion of technological inno
vations is biased toward either a voluntaristic aspect of agents or a functionalistic
aspect of structure without providing the meso-level concepts to adjudicate
between macro-scale structural forces and micro-level factors.
An attempt was made to develop a new theoretical framework that can
combine the specifics of what is happening to an individual countiy or to a group
of countries at particular places at certain historical times with the global processes
39
that are restructuring social, economic, and political reality.
The international
difiusion of technological innovations is, thus, being captured theoretically in the

network relationships among national systems of innovation. Accordingly, in the
network approach, each nation has a strategic niche to exploit according to its
position in the networks and its national industrial activities, and to that extent, it is
voluntaristic. The network position is constantly being formed and changed
through the interaction processes of
international diffusion and adoption of
technological innovation, but it is also constrained by the network structure in

which interaction among national systems of innovation takes place. Thus, a
nations strategic niche in a national system of innovation is dependent upon the
historical role it has played in the network.
40
CHAPTER HI
INDICATORS OF TECHNOLOGICAL CAPABILITY AND ECONOMIC GROWTH IN
KOREA
Introduction
In a little more than three decades, Korea has emerged as one of the major
exporters of manufactured goods and has become a country to be modeled after by
many developing countries including China. As late as 1961, Korea was typical of
the underdeveloped countries, its per capita GNP stood at less than $100 in
current dollars, and its exports totaled less than $50 million.1 The industrial
structure was also heavily biased toward primary industries where 65 per cent of
the labor force was employed while secondary industries (mining and
manufacturing) employed only 6.9 per cent of the labor force. Since 1962, the Ko
rean economy has achieved phenomenal growth and its per capita GNP in current
dollars has increased from a meager $87 in 1962 to $6,749 in 1992. Koreas
export growth was outstanding: exports increased from $55 million in 1962 to $77
billion in 1992. The share of manufactured goods in exports increased from 27 per
cent to 95 per cent during the same period. At the initial stage, Korean industrial
progress was based on low-technology, labor-intensive products such as textile,
apparel, and plywood. However, increasing competitive pressures from next-tier
Asian developing countries including China and changing patterns in the
international technological system forced Korea to strive hard to clime up the
*In 1961. per capita GNP in current dollar was US$82 and exports totaled US$41
million.
41
technological ladder with greater importance given to the high-tech industries such
as
semiconductors,
computers,
telecommunications,
aerospace,
genetic
engineering, new materials and robotics. Currently, Korea is the third largest
producer of memory chips and has moved into second position behind Japan in
consumer electronics. In 1990, Korea's R&D expenditures as a percent of GNP
and its number of science & technology researchers per 10,000 population almost
approached the level of some of the Western European countries.
Where did this Korean industrial competence come from? Although there
exist various explanations about the factors behind Korea's phenomenal economic
growth, the most important of all may be its technological capability, which is a
combined outcome of various economic, social, and technical inputs.2 However, it
would be difficult for any country to come up with a set of indicators measuring
technological progress. Surely data of this sort in Korea are extremely scarce.
However, available data suggests that a great deal of progress has been made in
fostering technological capability in Korea. This chapter attempts to statistically
delineate the level of technological capability which Korea has acquired in the
past.
In section 2, the stocks of Korea's stock of technological knowledge are
presented. These are measured based both on accumulated R&D and on patent and
technology import.
Section 3 attempts to explain the patterns of technological
change in the Korean economy though input-output analysis. To do this, the

degrees of substitution (R) and fabrication (S) are estimated using 1975-1988
input-output table in 1985 constant prices. The major R & D indicators in Korea
2Linsu Kim, "National system of Innovation: Dynamics of Capability Building in
Korea," In Richard R. Nelson, ed. National Innovation System: a Comparative Analysis (Oxford
University Press: Oxford, 1993), 358.
42
are presented in Section 4. The level of R&D investment and the statistics on
industrial property rights application are the categories used for measuring R&D
activities in Korea. The last section presents the status of Korea's technological
balance of payments.
The Stocks of Technological Knowledge
Technological progress is cumulative and evolutionary. The knowledge and
experience created by past research and development activities continually
accumulate and new R&D activities begin on the foundation of accumulated
knowledge and experience. This accumulated knowledge and experience is called
'technology stock'
and it is used as an index to show the potential of the
technological capability of a nation. Technology stock can be measured using

various methods, but the most commonly known methods are: 1) technology stock
based on accumulated R&D; and 2) technology stock based on patent and
technology import.3
Table 1 and Table 2 show trends in the changes of technology stock in
Korea from 1974 through 1988 and they are measured by using the above two
methods.4
It can be seen that the growth of technology stock in Korea has
been remarkable. From 1974 to 1988, the average growth rate of technology stock
based on accumulated R&D was 25.1 % while technology stock based on patent
and technology import was 11.2 % during the same period.
3These indices were developed by Z. Griliches. See Griliches, Z., "R&D productivity
slowdown," American Economic Review 70 (1980): 343-8 and Griliches, Z, ed. Research and
Development, patents and Productivity (Chicago: Chicago University Press. 1984).
4Young Woo Kim. Tae Yoon Chung and Byoung Moo Park Macroeconomic
Forecasting Model and Technological Innovation (Seoul: Technology and Science Policy
Research Institute, 1991). 17-19.
43
TABLE 1
TECHNOLOGY STOCK BASED ON ACCUMULATED R&D
Year
Technology Stock*
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
Average Growth
242.47
298.81
366.88
467.19
620.68
801.59
989.23
1184.60
1405.68
1705.07
2141.84
2762.83
3596.59
4623.99
5787.81
Rate
Growth Rate(% )
-
23.24
22.78
27.34
32.85
29.15
23.41
19.75
18.66
21.30
25.62
28.99
30.18
28.57
25.17
25.08
Source: Young Woo Kim et al. (1991. 17-19).

unit: billion Won
44
TABLE 2
TECHNOLOGY STOCK BASED ON PATENT AND TECHNOLOGY IMPORT
Year
Technology Stock3
1974
1464.08
1975
1608.39
1976
1785.36
1977
1968.43
1978
2255.61
1979
2523.79
1980
2706.21
1981
2906.36
1982
3148.06
1983
3483.39
1984
3914.31
1985
4380.92
1986
4997.58
5796.67
1987
1988
6734.42
Average Growth Rate
Growth Rate(%)
-
9.86
11.00
10.25
14.59
11.89
7.23
7.40
8.32
10.65
12.37
11.92
14.08
15.99
16.18
11.20
Source: ibid.
unit: billion Won
Technological Change in an Input-Output Framework

Technology embodied in the production structure of a particular economy
can be captured in an input-output analysis in the form of technical coefficient.5
The technical coefficient is viewed as measuring the fixed relationship between a
sector's output and its input. Thus, production in the input-output system operates
under a constant return to scale. However, techniques of production will and do
change over time for a variety of reasons6 and an economy's technical coefficients
matrix will also change over time. The changes in technical coefficients can be
explained from two sides, i.e., row-wise and column-wise. The row-wise changes
can be attributed to the substitution among intermediate inputs (degree of
substitution). This tendency can be represented by a vector of R which will be
greater than unity for expanding products, and less than unity for declining prod
ucts. On the other hand, the column-wise changes can be explained by the changes
in the combination of labor and capital which then affect the value added ratios
(degree of fabrication). In short, changes in capital intensity occur. Column-wise
shifts also reflect changes in labor productivity and shifts in product mix within a
particular sector. With technical progress it is likely that the degree of fabrication
will be liable to change. This tendency can be represented by a vector of S which
will be greater than unity if the degree of fabrication has decreased, and less than
unity if it has increased.
Accordingly, by estimating the vectors of R and S over
5In input-output work, after observing zy. the flow of input from / to j , and Xj, the total
output of j. from the ratio of input to output, zyfXj, denoted a T h i s ratio is termed a technical
coefficient: the terms input-output coefficient ana input coefficient are also used. See Ronald E.
Miller et al. (1985) for detailed explanations.
6For reasons of change, refer to ibid., 267.
46
time, we can ascertain the pattern of technological change in a particular

economy.7
In this analysis, we have used a 1975-1985 linked input-output table, a
constant price table (1985 price) and 1988 input-output table8 to estimate change
in R and S vectors and thus to explain the pattern of technological change in the
Korean economy. The results are reported in Table 3 and Table 4.
The following observations can be made concerning the changes due to
substitution (R): 1) The substitution effect is consistently less than unity in primary
sectors such as agriculture, forestry and fishery (1), mining (2), and lumber and
wood products (5). This indicates that intermediate demand for these sectors
tended to decline after having been substituted by other goods or by economizing.
2) A dramatic substitution effect is observed in energy-related industries. Table 3
shows the calculation results for the second half of the 1970s and the for the
1980s. Needless to say, the first half includes the Second Oil Crisis in 1979. The
1980 input-output table, therefore, represents the structure of the economy
immediately after the Oil Crisis. The length of time was too short for any
significant change in input structure to take place and by 1985 structural
adjustment to radical price change had been under way. By comparing the
estimated values for the 1975-1980 period with those for the 1980-1985 period,
the magnitude of the adjustment becomes apparent.
7The vectors of S and R can be calculated using the RAS method developed by Richard
Stone, et al (1962). The RAS approach was originally developed to update and project technical
coefficients.
8This table was compiled based on current prices and it was transformed into 1985
constant price using a price deflator.
47
TABLE 3
DEGREE OF SUBSTITUTION (R)
Industrial Sectors
1 Agriculture, forestry, and fisheries
2 Mining
3 Food processing
4 Textiles
5 Lumber and wood products3
6 Wooden Furniture
7 Pulp, paper, and paper products
8 Printing and publishing
9 Leather and leather products
10 Rubber products
11 Chemicals
12 Petroleum and coal products
13 Nonmetallic mineral products
14 Iron and steel manufacturing
IS Primary iron and steel products
16 Basic nonferrous metal products
17 Fabricated metal products
18 General machinery
19 Electrical equipment and apparatus
20 Electronic and Communication equip.
21 Transport equipment, motor vehicles
22 Transport equipment, others
23 Precision instrument
24 Other manufacturing
25 Construction
26 Electric power, gas, and water
27 Wholesale and retail trade
28 Restaurants and hotels
29 Finance, insurance
30 Real estate and real estate rent
31 Transportation and warehousing
32 Communication
33 Public administration
34 Public services
35 Business and personal services
36 Office supplies
37 Business consumption
38 Activities not elsewhere classified
75-80
80-85
75-85
85-88
80-88
0.7250 0.8570 0.9415 0.6213 0.8068
0.9218 0.9054 0.6131 0.8347 0.5551
1.1880 1.2182 0.8911 1.4472 1.0855
1.0863 0.9608 1.0962 1.0437 1.0532
0.9999 0.8401 1.1283 0.8400 0.9480
1.3943 1.5804 1.2051 2.2034 1.9044
1.2146 1.2694 1.2133 1.5417 1.5401
1.2275 1.3204 1.1035 1.6208 1.4571
1.1472 1.2264 1.4086 1.4070 1.7276
1.4383 1.1165 1.3334 1.6059 1.4887
1.1014 1.1310 0.9950 1.2457 1.1253
1.0859 0.7460 0.3990 0.8100 0.2976
1.2994 1.0946 1.0010 1.4223 1.0957
1.7300 0.9429 1.0510 1.6312 0.9909
1.2363 1.2400 1.0426 1.5330 1.2929
1.4885 1.2604 1.8927 1.8761 2.3855
1.4412 1.5945 1.2966 2.2980 2.0674
2.0263 1.6052 1.2654 3.2526 2.0312
1.5153 1.3406 1.0578 2.0315 1.4182
1.2664 1.3982 1.4994 1.7707 2.0966
1.4609 1.5756 1.6930 2.3018 2.6676
2.5174 0.7700 0.9285 1.9383 0.7149
1.3453 1.1780 1.3641 1.5848 1.6069
1.5110 0.7033 0.9905 1.0627 0.6966
1.4424 1.4845 1.0127 2.1413 1.5034
1.1360 1.1503 0.7176 1.3068 0.8255
0.8819 0.9093 1.1016 0.8019 1.0017
0.7409 0.8922 0.8325 0.6610 0.7428
1.2182 1.2314 1.2727 1.5001 1.5672
1.7637 1.5242 0.7180 2.6881 1.0944
0.9537 0.9296 0.9630 0.8866 0.8952
1.3879 1.2066 1.0283 1.6746 1.2407
3.4983 0.4619 1.3272 1.6157 0.6130
1.2123 0.9484 1.0613 1.1498 1.0066
1.7629 1.4656 1.1829 2.5837 1.7337
2.6361 1.4055 0.9378 3.7049 1.3180
0.9879 1.1799 0.8684 1.1657 1.0246
0.3256 0.5344 0.6503 0.1740 0.3475
Source: Calculated from 1975 - 1980 -1985 Link Input-Output Tables, 1989 and 1988 InputOutput Tables, 1991, Bank of Korea.
aExcludes furniture
48
In the case of mining (3), the value of R has dropped from 0.92 to 0.91; for
petroleum and coal products (12) from 1.09 to 0.75. We may include iron and
steel manufacturing (14) in this category where the value of R has dropped from
1.73 to 0.94. 3) Another dramatic shift is observed in the machine-producing
sectors. The direction of change is for increased inputs, contrary to energy-related
sectors. We may say that this trend represents the new direction in which the
Korean industry is moving, after overcoming the resource constraints. The shift is
most marked in transport equipment and motor vehicles (21) where the value has
increased from 1.46 in the 1975-1980 period to 1.58 in the 1980-1985 period and
1.69 in 1985-1988 period. Likewise, the value in electronic and communication
equipment (20) has increased from 1.27 in 1975-80 to 1.40 in 1980-85 and 1.50 in
1985-88. 4) An exception among the machine-producing sectors is transportation
equipment other than automobiles (22). The figure dropped from 2.52 in 1975-80
to 0.77 in 1980-85, reflecting a sharp decline in the shipbuilding industry due to
meager demand for ocean transportation of crude raw materials such as oil and
iron ore.
5) Interesting trends are observed in the tertiary industry. Finance,
insurance (29), business and personal services (35), and communication (32) are
becoming increasingly important as inputs into productive activities.
Turning to the degree of fabrication (S), we observe the following changes
as shown in Table 4: 1) In traditional sectors such as agriculture, forestry, and
fishery (1), mining (2), lumber and wood products (5), and wooden furniture (6),
the estimated S exceeds unity. This is an indication of a decreasing degree of
fabrication, or a decreasing value added ratio, and it can be interpreted to reflect
increasing intermediate inputs into these industries.
49
2) In the tertiary industry, we also observe a general trend of declining

value added ratio, or increasing intermediate inputs. This is the case in such sectors
like restaurant and hotels (28), finance, insurance (29), and real estate(30),
transportation (31), public administration (33), public services (34). 3) In contrast,
in the case of the chemical industry and the metal-producing sectors, we generally
observe that the degree of fabrication remains consistently less than unity. This
indicates that there has been rising trends in value added ratios in these industries.
The cases in question include rubber products (9), chemicals (10), iron and steel
manufacturing (14), primary iron and steel products (15), basic nonferrous metal
products (16), and fabricated metal products (17). This is interpreted to reflect a
reduction in intermediate inputs due to automation and economies of scale.
However, in the case of machine-producing sectors, we can observe declining
trends in value added ratios. This may be because of the fact that these industries
are heavily dependent upon imported parts and components. The cases in question
include
general
machinery (18), electrical equipment and apparatus (19),
electronic and communication equipment (20), motor vehicles (21) and other
transportation equipment (22), and to a lesser degree, precision instruments (23).
50
TABLE 4
DEGREE OF FABRICATION^)
Industrial Sectors
2 Mining
3 Food processing
4 Textiles
6 Wooden Furniture
10 Rubber products
11 Chemicals
15 Primary iron and steel products
25 Construction
32 Communication
34 Public services
36 Office supplies
75-80
80-85
75-85
85-88
80-88
1.2789 1.1334 0.9406 1.4495 1.0061
1.2699 1.4615 0.8829 1.8560 1.2904
0.8841 1.0690 0.9849 0.9451 1.0529
0.9312 1.1223 0.9257 1.0451 1.0390
1.1574 1.0533 0.9651 1.2191 1.0165
1.1327 0.9848 0.9765 1.1155 0.9617
0.9189 1.0267 1.0031 0.9434 1.0299
0.9349 1.0761 1.0192 1.0060 1.0968
1.2612 0.8904 1.3656 1.1229 1.2159
0.9296 0.9749 0.9645 0.9063 0.9403
0.9011 0.9985 0.9788 0.8997 0.9773
0.9769 1.0983 0.8197 1.0729 0.9003
1.0265 0.9371 0.9580 0.9619 0.8978
0.9207 0.9453 0.9777 0.8704 0.9242
0.9993 0.9025 0.9857 0.9019 0.8895
0.9664 0.9868 0.9939 0.9537 0.9808
0.8133 0.9574 1.0037 0.7787 0.9610
1.0927 1.0215 0.9544 1.1161 0.9749
0.8785 0.9892 1.0290 0.8691 1.0179
1.0070 1.0475 0.9936 1.0548 1.0408
0.2263 0.9403 1.0282 0.2127 0.9669
1.6466 1.1531 1.1449 1.8987 1.3202
0.8165 0.9567 1.0024 0.7811 0.9589
1.0981 0.9831 0.9802 1.0796 0.9636
0.9381 0.9884 0.9832 0.9272 0.9718
0.9643 0.6777 0.9043 0.6534 0.6128
1.5428 0.9901 0.9710 1.5275 0.9614
2.0814 1.0286 0.9233 2.1410 0.9497
1.1802 1.0113 0.9732 1.1936 0.9842
2.2791 1.5488 0.9260 3.5298 1.4342
1.0814 1.0141 0.9495 1.0966 0.9629
0.5453 1.8422 0.9578 1.0045 1.7645
1.0192 1.3914 1.0384 1.4181 1.4448
1.2864 1.1475 0.9417 1.4762 1.0806
0.8545 1.0105 0.9187 0.8635 0.9284
0.8633 0.8621 1.0000 0.7443 0.8621
0.9775 0.9475 1.0000 0.9261 0.9475
0.8419 2.4227 0.4681 2.0397 1.1340
Source: same as Table 3

aExcludes furniture
51
Summary of Industry Trend in R and S

As reported in Tables 5 an 6, we can classify the industries into four
categories by the trends in R and S. First is the case where R has increased over
the years ( i.e., demand has increased for this sector) and S has decreased (i.e.,
productive efficiency has improved). In the 1975-85 period, typical sectors
belonging to this case include wooden furniture (6), leather and leather products
(9), and primary iron and steel products (15). We observe this favorable
development in electric power, gas and water (26), finance and insurance(29), and,
to a lesser degree, wholesale and retail trade (27) and restaurant and hotel (28).
Traditional sectors such as agriculture, forestry, and fisheries (1) also exhibited this
trend, but the estimated values of R and/or S are less satisfactory. During the
period 1980-88, we observe more industries belonging to this favorable trend.
Industries in this category are textiles (4), lumber and wood products (5), rubber
products, electronic and communication equipment (20), and transport equipment
other than automobiles (22). In service sector, such industries as wholesale and
retail trade (27), finance and insurance (28), transportation and warehousing (31),
and public services are in this category
Second is the case where demand has increased (R is up) but productive
efficiency has dropped (S is up). The case in question during the 1975-85 period
include food processing (3), pulp, paper, and paper products (7), printing and
publishing (8), chemicals (11), fabricated metal products (17), electronic and
communication equipment (20), motor vehicles (21), construction (25), and public
administration. In 1980-88 period, some of the industries have moved to the first
category, which include electronic and communication equipment (20), and public
administration (33). Such industries as leather and leather products (9), iron and
52
steel manufacturing (14), basic nonferrous metal products (16), motor vehicles
(21) and precision instrument (23) belong to this case in the same period.
Third is the case where demand has decreased (R is down) but gains in
efficiency were observed (S is down). The sectors which belong here in the 197585 period, are lumber and wood products (5), nonmetallic mineral products (12),
transportation and warehousing (31), and public services (34). General machinery
(18) and transport equipment other than automobiles belong to this case, but the
estimated values are less satisfactory. In 1980-88 period, however, more industries
have been included in this category and they are mining (2), food processing (3),
wooden furniture (6), pulp, paper, and paper products (7), printing and publishing
(8), chemicals (11), petroleum and coal products (12), general machinery (18), and
construction (25). Service industries such as restaurants and hotels (28), real estate
(30), communication (32), and business and personal services (35) fell into this
case in the same period.
And finally, the case where both demand and efficiency have deteriorated
(R is down, S is up). During the 1975-85 period, this category includes such
industries as mining (2), textiles (4), petroleum and coal products (12). Chemicals
(11), iron and steel manufacturing (14), basic nonferrous metal products (16),
electrical equipment (19) and precision instrument (23) also belong to this
category in the same period, but their estimated values are less satisfactory.
Among the service sectors, communication (32)
and business and personal
services (35) belonged to this case in the 1975-85 period. On the other hand, such
industries as nonmetallic mineral products (13), primary iron and steel products
(15), fabricated metal products (17), and electrical equipment have been included
in this category.
53
TABLE 5
SUMMARY OF INDUSTRY TREND IN RAND S (75-85)
Case II
Case I
Case III
R up
Rup
Rdown
Sup
S down
S down
(X)
2 Mining
X
3 Food processing
4 Textiles
X
S Lumber and wood products3
X
6 Wooden Furniture
X
X
X
10 Rubber products
X
11 Chemicals
X
X
15 Primary' iron and steel products
X
(X)
X
X
(X)
X
X
25 Construction
X
(X)
(X)
X
(X)
X
32 Communication
X
X
34 Public services
36 Office supplies
(X)
X
X
Source: Tables 3 and 4
Industrial Sectors
Case IV
Rdown
S up
X
X
(X)
X
(X)
(X)
(X)
(X)
Note: (
) indicates the cases where general trends are observed but the values are less than
satisfactory.
54
TABLE 6
TABLE 6 SUMMARY OF INDUSTRY TREND IN R A N D S (80-88)
Industrial Sectors

2 Mining
3 Food processing
4 Textiles
6 Wooden Furniture
10 Rubber products
11 Chemicals
15 Primary iron and steel products
16 Basic nonfcrrous metal products
25 Construction
32 Communication
34 Public services
36 Office supplies
Case I
Rup
S down
(X)
Case II
R up
S up
Case III
R down
S down
Case IV
Rdown
S up
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
(X)
X
X
X
X
(X)
Source: Tables 3 and 4
55
Major R & D Indicators

Level of R & D Investment
The level of R&D investment and activities by both government and private
industries is another way to measure the technological development of a nation.
Table 7 shows that the R&D investment increased from $8 million in 1965
to $4.5 billion in 1990. The share of R&D expenditure in GNP also increased from
0.29% in 1965 to 1.91% in 1990. It can be seen that the R&D expenditures have
drastically increased
since the middle of 1970s. This reflects the shift of
government policy from the promotion of the light/mature industries to that of

heavy/technology-based industries and from the assimilation of production
technology to a strong drive for technological innovation.9 Table 7 shows that
there has been structural change in R&D investment. The proportion of R&D
expenditure between the public sector and the private sector was reversed in the
1980s.10 In 1965 the private sector assumed only 10 percent of R&D expenditures
but it assumed more than 80 percent of R&D expenditure in 1990. This means
that during the early phase of industrialization the government took the initiative
in local R&D activities. But as industrialization progressed and Korea lost its
comparative advantage in labor-intensive industries, the private sector gradually
took the leading role in local R&D in order to sustain its international
competitiveness.11 Table 7 also shows that R&D spending a ratio of total sales
increased from 0.36 % in 1976 to 2.07 % in 1990. The electric and electronics
9Linsu Kim (1993). 369.
10Actually, it was first reversed in 1977 when the proportion between the public sector
and the private sector became 47:53.
1*Linsu Kim. op cit. 370.
56
industry spent 4.85 % of sales for R&D activities. However, manufacturer's R&D
spending as a proportion of total sales is still far less than that of advanced
countries.12
TABLE 7
MAJOR R&D INDICATORS IN KOREA
R&D expenditure($ Million)

Funds from govemment(A)
Funds from private sources(B)
A: B
R&D/Manufacturing sales(%)
GNP($ Million)
R&D/GNP(%)
R&D researchers(persons)3
Research institutes
Universities
Companies
R&D researchers per 10.000 population
1965
8
7.2
0.8
90:10
n.a.
2,759
0.29
2,765
n.a.
n.a.
n.a.
1.0
1975
88
59
29
67:33
0.35
20,952
0.42
10,275
5,308
2,312
2,655
2.9
1980
321
186
135
52:48
0.65
55.345
0.58
18,434
4.598
8,695
5,141
4.8
1985
1,298
247
1,051
19:81
1.51
87,703
1.48
41,473
7,154
14.935
18,996
10.1
1990
4,481
717
3,764
16:84
2.07
234,607
1.91
70,503
10,434
21,332
38,737
16.4
Source: Ministry of Science and Technology, Report on the Survey o f Research and Development
in Science and Technology, various issues; Linsu Kim (1993), op cit., 370.
aThe figures exclude research assistants, technicians, and other supporting personnel.
Statistics on Industrial Property Rights

R&D efforts can be awarded with industrial property rights and, therefore,
the statistics on industrial property rights can be used to measure the intensity of
R&D activities of a nation.
12The manufacturer's R&D spending as a proportion of total sales in USA, Japan and
Germany is 3.2%, 3.2% and 4.2%, respectively. MOST, Science and Technology Annals. 1991.
263.
57
Domestic Industrial Property Rights Application

Table 8 shows the trend of industrial property application by domestic and
foreign nationals. The total number of industrial property rights application
increased 1.5 times from 81,922
cases in 1986 to 120,736 cases in 1991,13
showing an annual average growth rate of 8.1 percent.
TABLE 8
TRENDS OF INDUSTRIAL PROPERTY RIGHTS APPLIED BY
KOREAN AND FOREIGN NATIONALS
________________________________________________________(Unit: case. %)
1989
Average Growth
1986
1990
1991
Rate (1986-91)
17.1
12,759
23.315
25.820
28.132
Patents
21,530
22,401
22,654
25.895
2.9
Utility Models
18.731
18.196
20.097
1.4
Industrial Designs
18,769
10.7
28,031
39.832
46.826
46.612
Trade Marks
102.873
8.1
Total
81.922
114.069
120,736
68.300
7.5
63,256
81,713
90,659
Korean Nationals
27.271
18,666
32.356
30.077
10.0
Foreign Nationals
Source: The Office of Patents Administration. Patents Annals, various issues.
The number of cases of patents applied achieved the highest growth rate
during the same period. This reflects the fact that domestic industries have realized
the importance of R&D and actively involved in the development of new products
to improve international competitiveness.
13In 1975 and 1980. the numbers of cases applied were 26.387 and 37,260. respective
ly58
International Application by Korean Nationals

The status of international application for industrial property rights can be
another good indicator o f the level of national technological capability.
TABLE 9
STATUS OF FOREIGN APPLICATIONS FILED BY KOREAN NATIONALS
Country\
Type
83
Australia
Austria
Benelux
Canada
France
Italv
Japan
Sweden
Switzer
land
UK.
USA.
West
Germany
Utility
Models
Patents
86
16
90
34
(0-1)
(0.2)
21
37
(0.1)
(0.1)
15
21
58
(0.1)
(0. 1)
(0.2 )
13
36
112
(0.1)
(0.1)
(0.2)
23
53
(0.1)
(0.1)
Trade
Marks
Industrial
Designs
83
86
90
83
86
3
90
2
(0-3)
(0.2)
83
-
(0.1)
-
1
(0.1)
90
53
(0.4)
(0.7)
22
(0-5)
(0.8)
29
43
(0.7)
(0-7)
13
10
49
37
(0.4 )
(0-5)
(0.7)
(0 .6)
(0.3)
((0.1
-
(0.3 )
(0-5)
(0.4)
2
(0.2)
86
26
31
69
(0.3)
(0.3)
77
74
501
122
117
179
41
40
52
43
96
248
(0.3)
(0.2)
( 1.2)
(9.4)
(9.2)
( 14.4)
(3.1)
(2.9)
(2.7)
(0.3)
(0 .6)
( 1.3)
26
60
(0. 1)
(0-1)
23
44
(0. 1)
(0. 1)
16
52
295
(0.1)
(0. 1)
(0.4)
78
162
227
(0 .2 )
(0 3)
(0.2)
14
47
308
11
15
12
(0.1)
(0. 1)
(0.5)
(0.2)
(0.4 )
(0.8)
(0-2)
(0.3)
11
26
(0. 1)
(0.3)
(0.6 )
22
35
53
53
(0.9 )
(l.i)
9
( 1.6)
(0 .7 )
31
(0.1)
( 1.7)
16
26
(0 .3 )
(0-4)
13
27
(0 .6)
(0.9)
36
58
(0 .3)
(0.3)
172
(0.2)
29
64
(0.5)
(0-8)
Source: ibid.
Note: The figures in parantheses represent percentage
unit: number of cases
Table 9 shows the status of foreign applications filed by Korean nationals.

Though the share of application filed by Korean in each country is minimal, there
has been remarkable growth in terms of percentage increase in the number of
applications filed.
Technological Balance of Payment
The technological balance of payments is similar to the concept of
international balance of payments and it represent a country's overall position in
technology exports
and imports. Accordingly, a surplus in the technological
balance of payments signifies that the country is technologically more developed

than other countries. Table 10 shows Korea's technological balance of payments
position from 1980 through 1990.
TABLE 10
TECHNOLOGICAL BALANCE OF PAYMENTS
Year
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
Source: Ministry o f
Payments(b)a
Receipts(a)3
6.0
11.8
18.2
18.9
16.9
11.3
11.7
10.1
8.9
10.5
21.8
107.2
107.1
115.7
149.5
213.2
295.5
411.0
523.7
676.3
888.6
1.087.0
Ratio(a/b)
0.06
0.11
0.16
0.13
0.08
0.04
0.03
0.02
0.01
0.01
0.02
Science and Technology', Republic o f Korea, Report on the Survey o f
Research and De\>elopment in Science and Technology, 1991,

unit: US$ million
60
It can be noticed that in terms of absolute value, the amount of receipts has
more than quadrupled during the period. However, the ratio between receipts and
payment (receipts/payments) declined after 1984. This may have been a result of
the sharp increase in the number of technology imports since 1984 when the
Korean government changed its policy regarding technology imports.14
Chapter Summary
This chapter has attempted to statistically measure the level of Korea's
technological capability. Even though it is quite difficult to come up with a set of
indicators measuring the technological progress of a country, available data
suggests that a great deal of progress has been made in the technological capability
of Korea.
The first indicator used to measure the technological potential of Korea are
the stocks of technological knowledge which are based both on accumulated
R&D and on patent and technology import. During the 1974-88 period, the
average growth rate of Korea's technology stock based on accumulated R&D was
more than 25 per cent while technology stock based on patent and technology
import was more than 10 per cent during the same period.
Input-output analysis is another measure to ascertain the pattern of
technological change in a particular economy. In this study, we have estimated the
degree of substitution (R) and the degree of fabrication (S) to explain the pattern
14In 1984, the Korean government changed its policy concerning technology imports
from the approval system to the report system. During the period of 1962-1990, a total of 6,944
cases of technology were imported and 4,297 cases (61.9% ) of technology were imported
during 1984 - 1990. Korea Development Bank, The Analysis on the Effects o f Technology
Imports, 1991.23.
61
of technological change in Korea. In the estimation, we have used the 1975-88

linked input-output table, a constant price table based on 1985 price. Both vectors
indicates that the Korean economy has made a fundamental structural change
during the period.
The level of R&D investment by both government and private industry can
also be used to measure the technological development of a nation. R&D
investment in Korea has increased more than 500 times during the 1965-1990
period and the share of R&D investment in GNP has almost reached the level of
some of the advanced European countries. There also has been structural change
in R&D investment during the same period. The proportion of R&D investment
expenditures between the public sector and private sector was first reversed in
1977 and the role of the private sector has increased since then. In 1990, the
private sector assumed more than 80 percent of total R&D expenditure.
The statistics on industrial
p r o p e r ty
rights was also used to measure the
intensity of R&D activities in Korea. The total number of industrial property

rights application in Korea has increased more than 4 times during the 1975-90
period. Though the share of industrial property rights application filed by Korean
in foreign countries is still minimal, there has been remarkable growth in terms of
percentage increase in the number of applications filed.
The technological balance of
payment represents a country's overall
position in technology exports and imports. In terms of absolute value, the

amount of receipts has more than quadrupled during the 1980-90 period, but the
ratio between receipts and payments has declined during the same period due to
the sharp increase in the number of imports since 1984.
62
CHAPTER IV
THE CHARACTERISTIC FEATURES OF THE KOREAN NATIONAL SYSTEM OF
INNOVATION SUPPORTING TECHNOLOGICAL ADVANCEMENT IN INDUSTRY
In this chapter, we shall take the theoretical position of Schumpeter stating

that technological capacity is the main source of competitive strength of firms and
nations. We shall apply the
concept of a national system of innovation by
answering the questions raised at the beginning of this study because it may enable
a country with rather limited resource, to make very rapid progress through
appropriate combinations of imported technology and local adaptation and
development. However, a weakness in the national system of innovation may lead
to abundant resources being squandered by pursuing inappropriate objectives or
employing ineffective methods.1
The national system of innovation is made up of institutions and economic
structures affecting the rate and direction of technological change in society. It
includes not only the system of technology diffusion and an R&D system but also
institutions and factors determining how new technology affects productivity and
economic growth.
In this chapter, an investigation will be made to identify the institutional
features of the Korean national system of innovation which have been conducive
to the efficient evolution of a production system. The analysis will concentrate on
the main features of the system such as: 1) the role of firms/industry in improving
*Christopher Freeman. Technology Policy and Economic Performance: Lessons from

Japan (Science Policy Research Unit: University of Sussex. 1987), 3.
63
production technology and upgrading organizational efficiency to cope with

changes in technology; 2) the role of government in the formulation and
implementation of science and technology policy to provide appropriate
institutional mechanisms; and 3) a social environment conducive to innovation.
The Role of Private Firms in Improving Technological Capability

The Economic Environment and the Characteristics of Korean Firms
The origin of Korean firms can be traced back to the 1920s when Korea
was under Japanese colonial rule, but most of the industrial inheritances from
Japanese colonialism were almost completely demolished during the Korean War.
The national need for reconstructing its industrial base has provided an economic
and business environment for entrepreneurs to grasp business opportunities by
exerting their creativity and the managerial skills which they
gained under
Japanese rule.2 Therefore, it would be appropriate to say that modem Korean

firms were bom in the 1950s. Such large-scale plants as textile, sugar, and flour
milling factories were built in the 1950s and 9 of the top 10 business groups
operating in 1985 started their business activities or had considerable business
foundations in the 1950s.3
The Korean economy can be characterized as being dominated by
"Chaebol", or business conglomerates, the majority of whose member firms are
2Even though it was confined to only a few segments of society, Koreans did gain some
social and economic benefits. Many of these were conducive to future economic growth: the
lasting benefits of technical education, acquisition of new skills and technical know-how.
experience in working with entrepreneurs and in large-scale industries, and a changing habit of
consumption.
3K u Hyun Chung, Growth Strategies and Management Structures o f Korean Firms (in
Korean) (Seoul: Korean Chamber of Commerce and Industry, 1987), 19.
64
monopolistic in their respective markets and which are owned and controlled by
particular individuals or their close family members. This economic phenomenon of
dominance by chaebol started in the early 1960s when the military government
exonerated certain owners of large business enterprises from the so-called illegal
accumulation of wealth and induced them to participate in the industrialization
effort. At the initial stage of industrialization, the military government placed
major emphasis on promoting strategic industries which required huge capacity in
technology, capital, manpower, and organization and, naturally, business groups
were favored over smaller firms. The government accorded the benefits of tax,
finance, and trade policies to the business groups. Thus, the growth of business
groups through diversification attributable to inherent advantages of their business
capabilities was further aided by the growth-first policy of
the military
government.4
The Relative Size of Big Business Groups in Korea
Share of Economic Activity
The formation and growth of conglomerate business groups has had a
strong effect on Korea's economy and on business activity in Korea. Table 11
shows the shares of business groups in manufacturing for the period of 1977-1987.
The top 30 business groups' employment share of manufacturing in 1977
accounted for 20.5 % while their share of shipment was 34.1 % for the same year.
Ten years later in 1987, the top 30 business groups employment share of
manufacturing declined to 17.6 %. On the other hand, their share of shipments in
the same year increased to 37.3 %. One noteworthy fact is that despite the overall
4Kyu-Uck Lee, ed.. Industrial Development Policies and Issues (Seoul: Korea
Development Institute. 1986). 243.
65
declines in the shares of the top 30 business groups in manufacturing during the
1982-1987 period, the shares of the top 5 business groups decreased to a neg
ligible amount during the same period. This means that the increase in the share of
the manufacturing among the top 30 business groups was led by the top 5 business
groups and that, within the top 30 business groups, the gaps between the upper
level business groups and lower level business groups widened.
TABLE 11
THE SHARES OF BUSINESS GROUPS IN MANUFACTURING*
Business
Group
Employment
1977
Shipment
1982
1987
1977
1982
1987
top 5
9.1
8.4
9.9
15.7
22.6
22.0
top 10
12.5
12.2
11.9
21.2
30.2
28.2
top 15
14.4
14.5
14.0
25.6
33.9
31.6
top 20
17.4
16.0
15.1
29.3
36.6
33.9
top 25
18.9
17.1
16.3
31.9
38.8
35.8
top 30
20.5
18.6
17.6
34.1
40.7
37.3
Source: Kyu-Uck Lee and Lee, Jae-Hyung (1990), .28

unit: percentage
Table 12 shows the shares of business groups in shipment by industry in

1987. Within the chemicals, petroleum and coal (35) and the fabricated metal
products, machinery & equipment (38), the top 30 business groups hold dominant
shares of 49.0 % and 49.2 % respectively. These industries not only account for
66
big shares in the manufacturing sector but also they have grown the fastest since
the 1970s. It can be seen that the top 5 business groups have actively participated
in these growing industries. In particular, the top 5 business groups hold 40.9 %
shares out of the 49.2 % shares held by the top 30 business groups in the shipment
of fabricated metal products, machinery & equipment (38).
TABLE 12
THE SHARES OF BUSINESS GROUPS IN SHIPMENT
BY INDUSTRY(1987)11
31
32
33
34
35
36
37
38
39
top 5
4.9
6.3
2.8
5.6
27.4
6.3
9.9
40.9
1.4
top 10
6.0
10.2
6.0
13.3
37.0
19.5
22.0
46.4
1.4
top 15
18.3
13.5
6.0
17.0
40.6
20.9
26.5
47.1
1.4
top 20
22.6
13.5
6.0
17.1
46.2
21.9
31.4
47.8
1.4
top 25
23.8
18.2
6.2
17.1
46.3
23.0
39.2
48.7
1.4
top 30
26.2
20.4
6.2
17.2
49.0
28.9
39.2
49.2
1.5
Source: ibid., .29.

Note: The names of industries by division are as follows: 31-manufacture of Food, Bev erages and
Tobacco; 32- Textile, Wearing Apparel, and Leather Industries; 33-Manufacture of Wood and
Wood Products, Incl. Furniture; 34-Manufacture of Paper, Paper Products, Printing, Publishing:
35-Manufacture of Chemicals, Petroleum, Coal; 36-Manufacture of Non-metallic Mineral Prod
ucts; 37-Basic Metal Industries; 38-Fabricated Metal Products, Machinery & Equipment; and 39
Other Manufacturing Industries.
unit: percentage
67
GTCs and Conglomeration

In 1975, the Korean government introduced the "general trading company
(GTC)" system to promote exports. The GTCs were designed to play the role of
"window" or "representative" of small and medium-sized export enterprises by
taking care of all aspects of their export trade. In other words, a functional division
of labor between export traders and producers was to be promoted.
It was the government's intention to encourage scale expansion of GTCs by
appointing trading subsidiaries of large business groups to be GTCs.5 The govern
ment originally imposed requirements for companies to be designated as GTCs,
such as minimum export volume and minimum number of export products.
Theoretically, trading companies, as commissioned merchants, act as inter
mediaries in export trade transactions even if they have no equity interests in the
concerned manufacturing activities. Alternatively, GTCs themselves can take the
initiative of setting up their own manufacturing ventures to create and exclusively
capture business opportunities. Korean GTCs have adopted the latter strategy in
order to maximize economies of scope. This has resulted in the establishment of
manufacturing firms by GTCs, or in mergers and takeovers of export producers,
thus increasing the concentration of economic and market power in large business
groups.
5Currently there are 8 GTCs. Except for Korea Trading Company, which was
established to promote the exports of small and medium industries, all other 7 general Trading
companies are exporting arms of large business groups. They are: Sam Sung, Ssang Yong,
Daewoo, Hyo Sung, Lucky Gold Star, Sun Kyung, and Hyun Dai.
68
TABLE 13
THE EXPORT SHARES OF GENERAL TRADING COMPANIES(GTC)a
Total Export(A)
Exports of GTC(B)
Shares(B/A)
1975
1980
1985
1990
1991
1992
50.8
175.1
302.8
650.2
718.7
766.3
5.9
60.1
145.4
245.5
303.3
331.0
11.6
34.3
48.0
37.8
42.2
43.2
Source: Ministry of Commerce, Industry and Resources

unit: $100 million
As shown in Table 13, the share of GTCs exports increased from 11.6 %
in 1975 to 43.2 % in 1992. The share reached a peak of 48.0 % in 1985 and
decreased to 37.8 % in 1990. This trend may reflect the increase in the exports of
lower level business groups and in the exports of small and medium industries.
However, since 1990, the exports share of GTCs has been increasing.
The Evolution of Corporate Organizations

The evolution of corporate organization is intimately intertwined with the
patterns of innovation and evolution of industrial structures. As already mentioned
in the previous section, the first phase of the development of modem Korean
industry and technology is centered around the growth of the chaebols. A
chaebol's member firms are controlled directly by a centralized management system
whose top echelon consists of a small number of owner-managers. These ownermanagers are in many cases family members of the founder of the chaebol.
69
Two unique characteristics are derived: first, a chaebol is itself an

independent entity that can mobilize all the human and non human resources of its
member firms in a highly coherent manner; second, its ownership and management
are monopolized by a handful of the founder's family members.6
Chaebol member firms are linked by interlocking directorates and cross
holding of stocks, both of which strengthen the controlling power of the owner or
founder, who usually owns 10-20 percent of the total outstanding shares of the
group's companies as a whole. Table 14 shows the ownership structure of chaebol.
TABLE 14
OWNERSHIP STRUCTURE OF CHAEBOL
(AS OF DECEMBER 1983)
Ratio of ownership within Group

Group
Rank
Cross-holding of stocks
by group's companies
Individual
investment
Ratio of ownership
outside Group
Total
Total
Top 10
49.0
11.7
60.7
39.3
100
Top 30
40.0
17.2
57.2
42.8
100
Source: Ku Hyun Chung (1989), 150.
6In terms of structure, contemporary Korean Chaebol are very similar to the pre-World
War II stage of development of the Japanese Zaibatsu. There, is, however, an importance
difference between Korean Chaebol and Japanese Zaibatsu. Pre-war Zaibatsu controlled thenown banks. Chaebol, on the other hand, are prohibited by government decree from owning more
than 8 percent of outstanding equity shares of major commercial banks.
70
In 1983, the top 10 business groups' ratio of ownership within the groups
was 60.7 % while that of top 30 business groups was 57.2 %. Both the top 10 and
the top 30 business groups' cross-holding ratio of stocks by affiliate companies was
more than 40 %. The high ratio of cross-stock holding by the groups' affiliates
companies means that vertical integration of production may have been achieved
while internal transactions among the affiliate companies within the business
groups may be higher.
Table 15 shows the chaebol ranking of internal transaction ratios from
1986 through 1989.
TABLE 15
INTERNAL TRANSACTION RATIO3 OF CHAEBOL BY RANK
Chaebol
Rank
1986
Top 5
28.25
Top 10
1987
1988
1989
Ratio
(b/a)
Combined
Sales(a)
Internal
Transaction(b)
GTCs Internal
Transaction Ratio*5
25.52 27.71
59.039.0
17.490.5
29.63
49.33
25.94
26.27
24.36 25.55
74.997.6
19.778.9
26.37
45.58
26.33
Top 20
24.17
22.61 24.14
89.418.0
21.839.5
24.42
41.89
23.87
Top 30
23.14
21.98 23.39
95.798.6
22.735.6
23.73
40.24
22.93
Source: Chung. B. H and Y. S. Yang, An Economic Analysis o f Korean Chaebol Sectors (Seoul:
Korea Development Institute, 1992), 71.
aIntemal Transaction Ratio = Amount of Internal Transaction/Amount of Gross Sales in
percentages.
^The figure on the left represents the GTCs internal transaction ratio of purchase from affiliate
companies while the figure on the right is the ratio of sales to affiliate companies.
71
Table 15 clearly shows that the internal transaction ratio among affiliate
companies of business groups has been over 20 %. Particularly, the internal
transaction ratio of GTCs has been over 60% for all ranks of business groups in
the table.
Chaebols and Technological Innovations
The structure of corporate organization of Chaebol as described above
has placed chaebol in an advantageous position to recruit the best human
resources, to identify, negotiate, and finance foreign technology transfer, to obtain
business licenses and preferential financing from the government, to apply
experience gained in one field of business to another, and to venture into new
business with existing businesses providing a cushion therefor.
Chaebol have played a pivotal role in developing high-technologies
industries in Korea since the 1980s. As a strategy to launch into high-technology
fields, Chaebol have aggressively diversified their sourcing of technologies in the
following manners:7 First, several major chaebols have set up outposts in Silicon
Valley, California to tap into state-of-the-art technologies by monitoring
technological changes and to acquire advanced semiconductor and computer
technologies. California also gave another advantage to chaebol by solving the
most obvious obstacle to Korea's high-technology adventures - lack of experienced
scientist and engineers for high-tech industries. California is populated by
thousands of top-notch scientists and engineers who are Korean-Americans.
Leading chaebol have lured away some of the most qualified Korean
scientists and engineers who previously held high ranking positions in such leading
7Linsu Kim (1993), 375-6.

72
US concerns as IBM, Fairchild, Intel, and National Semiconductor. Second,

chaebols have also successfully developed ties with multinationals, which provide
important inputs in developing Koreas high technologies. Multinationals from
advanced countries are looking at Korea to form consortiums or technology
cooperation, knowing that Korea is very weak in basic design and basic science
but has an international competitive edge in manufacturing and process
technologies. Chaebol have also entered extensive licensing ties with foreign high
technology firms. Third, chaebol have fostered closer ties with local public R&D
institutes in the 1980s, more so than in the previous decades. Capabilities available
in the public R&D institutes became relevant to chaebol' efforts to develop hightechnology industries. Fourth, chaebol have also invested aggressively in
developing in-house R&D activities in order not only to absorb, assimilate, and
adapt imported technologies from their outposts in Silicon Valley and from their
multinational partners but also to strengthen their own innovative activities.8
With an established technological network, high-caliber scientific and
engineering manpower, and ambitious R&D investment, chaebol have taken a
leading role in moving toward the technological frontier.
sFor example, Samsung set up 12 new R&D centers in Korea during the 1980s,
including Samsung Advanced Institute of Technology and Samsung Integrated R&D centers. In
1989 alone, Samsung spent $900 million, Hyundai and Lucky-Goldstar spent $600 million each,
and Daewoo spent about $300 million in R&D. These four leading Chaebol accounted for most of
the nation's total industrial R&D in the 1980s. ibid.. 376.
73
Major Sources and Channels of Industrial Technology

Major Sources of Industrial Technology
Lacking technological capability at the outset of industrialization, the major
source of technology for Korean industries has been foreign technology imports.
Table 16 shows the percentage distribution of the major sources of
technology by industry for manufacturing new products. The table is compiled
from data on a survey of 717 firms which have recorded technology imports as of
December 1990.
TABLE 16
PERCENTAGE DISTRIBUTION OF MAJOR SOURCES OF TECHNOLOGY
BY INDUSTRY FOR NEW PRODUCTS3
Industry/sources
Total
Electronics
Electric
Machinery
Chemicals
Textiles
Metal
Ceramics
Shipbuilding
Pharmaceutical
Foods
Large Enterprises
Small & Medium Enterprises
B
12
7
10
9
25
6
9
8
5
0
10
12
11
C
34
28
29
38
34
23
42
56
48
36
14
32
36
D
46
56
56
47
33
55
43
36
42
46
55
49
43
8
9
5
6
8
16
6
0
5
18
21
7
10
Source: The Korea Development Bank. An Analysis o f the Effects o f Technology Imports (1991),
190.
aA: mostly foreign source; B: largely foreign source with partial in-house development; C:
largely in-house development with partial foreign source for core technology; D, mostly in-house
development. All units are percentages.
74
In developing new products,
46% of the firms resorted to in-house
development with partial sourcing from foreign core technologies. 34 % of the

firms developed new products largely with foreign technology while 12 % of them
mostly with foreign source of technology. On the other hand, only 8 % of the firms
depended on in-house development. By industry,
only firms in the textiles,
pharmaceutical, and foods processing sectors showed somewhat higher percentage

of in-house development. Large enterprises tended to be more dependent on
foreign technology than were small and medium enterprises.
Table 17 shows the types of products produced with imported technology
by nation o f origin. The majority of firms imported technology for the production
of finished products. It can be also noticed that the import ratios from the United
States for intermediate products, parts, and materials are higher than those of
other areas while the import ratios of finished products from Japan and EC are
higher than that from the United States.
TABLE 17
TYPES OF PRODUCTS PRODUCED W ITH IMPORTED
TECHNOLOGY BY NATION3
Product/
Nations
Total
USA
Japan
EC
Others
Finished
Products
63
57
64
68
70
Intermediate
Products
17
19
17
16
16
Parts
Materials
Others
Total
9
10
10
5
6
7
9
5
7
6
4
5
4
4
2
100
100
100
100
100
Source: ibid., 207

unit: percentage
75
By industry, 100% of the imports of technology by the pharmaceutical

industry was for the production of finished products, while 70- 80 % of technology
imports by such industries as electric, machinery, textile, ceramics, shipbuilding,
and food processing were for finished products. On the other hand, the ratios of
imports for finished products by such industries as electronics, chemicals, and
metals were lower than other industries. The electronics industry imported more
technology for parts production than all other industries. The import ratios of
technology for intermediate products in the chemical and metal industries were
much higher than all other industries (Table 18).
TABLE 18
TYPES OF PRODUCTS PRODUCED WITH IMPORTED
TECHNOLOGY BY INDUSTRY*
Industry/Products
All Industries
Electronics
Electric
Machinery'
Chemicals
Textiles
Metal
Ceramics
Shipbuilding
Pharmaceutical
Foods
Large Enterprises
Finished
Products
63
58
82
72
44
72
42
70
77
100
78
62
67
Intermediate
Products
17
12
8
10
34
20
31
8
2
0
12
20
12
Parts
9
23
6
13
2
1
8
7
5
0
0
7
14
Materials
Others
7
2
0
1
16
4
18
12
2
0
9
7
5
Source: ibid., 205

unit: percentage
76
4
5
4
4
4
3
1
3
14
0
1
4
2
Major Channels of Learning Foreign Technology

Because the major source of industrial technology for Korean industries
has been imported foreign technology as described in the previous section, we
have to investigate the channels of importing foreign technologies. Table 19
shows the percentage distribution of channels of learning foreign technology by
industry. The table is also based on the survey of 717 firms that have recorded
technology imports as of December 1990.
TABLE 19
PERCENTAGE DISTRIBUTION OF CHANNELS OF LEARNING
FOREIGN TECHNOLOGY3 b c
Industrv/Channels
All Industries
Electronics
Electric
Machinery
Chemicals
Textiles
Metal
Ceramics
Shipbuilding
Pharmaceutical
Foods
Large Enterprises
A
SS
88
90
86
90
91
80
94
90
22
80
89
85
B
62
66
71
66
49
50
61
69
74
50
50
63
61
C
58
57
54
61
53
63
57
50
74
46
67
60
56
D
34
32
24
27
35
31
54
42
16
68
40
38
30
E
18
15
20
18
29
11
20
22
5
5
7
18
19
G
11
11
15
11
10
12
15
8
11
9
10
6
15
3
7
2
2
1
3
0
3
0
9
3
4
2
3
0
10
5
3
0
0
0
14
0
0
2
4
Source: ibid, 191.

aA, Technology Licensing; B, Ov erseas dispatch of in-house technicians; C, Technology consul
tancy. D, Technical information accompanied with equipment & raw material imports; E,
Foreign direct investment; F, Technical information from suppliers; G, inducement of scientists
overseas; H, Others.
^Multiple answers were possible within three major channels.
-Ratio (%)= Numbers of company answered to each channel -s- Numbers of company sampled.
77
According to Table 19, the major channel of learning foreign technologies

is through technology licensing (88% for all industries). The next important
channel of learning is through dispatch of in-house technicians for overseas
training (62%). Learning through foreign direct investment is relatively low (18%).
Strategies of Firms to Acquire Technological Capability9
The strategies of Korean firms to acquire technological capabilities varies
significantly by industry. First, industries using small batch and unit production
such as shipbuilding and machinery focus more on developing capability to design
and manufacture products than on setting up production processes, as they usually
produce highly differentiated products. As a result, large firms in these industries
relied heavily on the formal transfer of foreign technology primarily in the form of
foreign licensing and consultancy for the initial establishment of production system
and for the design of their products. These industries accounted for a
disproportionately large share of Korea's total foreign licensing through the 1970s.
These firms,
however, increasingly exerted their own technological efforts to
strengthen their own capability and in turn to reduce their reliance on foreign
licensing, as they accumulated experience in production and product design.
In contrast, small firms in these industries (plus small-sized firms in the
electronics and automobile industries, where large firms carry out large batch
operations) resorted primarily to their own imitative efforts to evolve organically
over a long period of time, establishing their initial production facilities with
primitive technologies developed by themselves and then gradually upgrading their
production system and product quality through the reverse engineering of foreign
9Most of this section is based on, "Microeconomic Behavior of Korean Firms." in
Linsu Kim (1993). 364366.
78
products and processes. Technology diffusion within these industries flowed

rapidly through the transfer of experienced engineers from existing firms to new
entrants. Particularly, experienced engineers at state-owned enterprises in the early
1950s have moved into the private sectors and played a pivotal role in emerging
private firms.
Second, industries using large batch and mass production systems such as
electronics and automobiles produce less differentiated products. Large firms in
these industries were also dependent on foreign licensing but to a lesser extent than
those with small batch operations. In the advent of an import substitution policy,
local firms entered technical assistance agreements with leading foreign firms to
import packaged technology (including assembly processes, product specifica
tions, production know-how, training local technical personnel, and component
parts) so as to establish the initial production system. The immediate technological
task was the implementation of transferred foreign technology for the assembly of
imported components and parts, whose final products had been tested and proven
elsewhere, requiring only engineering (E) efforts. Most late entrants poached
experienced personnel from existing firms to set up and begin their operations,
resulting in a rapid diffusion of imported technologies.
Then, competition stemming from new entrants, together with increasing
export promotion, called for indigenous efforts to assimilate foreign technology,
thus placing emphasis not only on engineering but also on limited development
(D&E). Capabilities acquired through the assimilation of foreign imported
technology also enabled local firms to develop related products without foreign
assistance through imitative engineering.
79
Third, industries using continuous processes such as chemicals, cement, pa

per, and steel produce the least differentiated products in highly capital-intensive
processes. Since the final product and processing products are relatively wellknown, but the proprietary know-how that lies in the details of the production
process can make a significant difference in the productivity of these industries, the
initial production system of
large chemical, cement and steel plants was
established on a turn key basis by foreign firms. Initial production capability to

operate and maintain such process-oriented plants stemmed largely from extensive
training by foreign suppliers before, during, and after the completion of the initial
production processes. The local firms, however, used deliberate strategies with
considerable efforts to acquire capability, leading to a series of minor
improvements with significant increase in productivity, and greater management of
engineering tasks in the subsequent expansions.
In short, given the scale of investment and lack of experience and capabil
ity, large firms across industries have resorted heavily to foreign sources in order
to ensure the early establishment and smooth start-up of a production system. In
contrast, small firms underwent a long process of imitative reverse engineering, as
they lacked financial resources and organizational capability to identify and
negotiate with foreign technology suppliers.
Nevertheless, both large and small firms deployed deliberate, aggressive
technological strategies to acquire their own technological capabilities through
exerted efforts to assimilate foreign technologies from the very outset. Korean
firms have acquired technological capabilities in piecemeal fashion, as successively
more sophisticated capabilities have been acquired and put into practice. The
process of acquisition has clearly been one of purposeful efforts involving a
80
succession of incremental steps, with production capabilities being developed

somewhat in advance of engineering and innovation capabilities. R&D in the
formal sense of the term was not important for Korea during this stage of
imitating mature technologies. Industries in fact reversed the sequence of R,
D&E: it started with engineering (E) for products and processes imported from
abroad, and then progressively evolved into the position of undertaking substantial
development (D), but research (R) was not relevant to Korea's industrialization
through the 1970s.
The Major Institutional Features of Korean Firms Supporting Innovation System
Human Resource Management Practice
Korea is richly endowed with a reservoir of well-educated and dedicated
labor force. Ninety-eight percent of the populace can read and write, more than 80
percent of the youth complete high school, and the majority of high school
graduates enter college or vocational training. Korea is said to have the highest
concentration of doctorates per capita.
Recruiting and Selection: Chaebol corporations carry out their recruiting
and selection activities twice a year, in June and November. Chaebol companies
prefer to recruit their management trainees from prestigious universities in Seoul.
Non-chaebol companies usually recruit new employees once a year, after the
November recruiting by chaebol business groups. The selection of new employees
by major chaebol companies is very competitive The selection process varies
among companies and it usually involves the following steps: 1) job applicants are
asked to submit the following documents to employers: an application form with a
photo attached, resume, school transcripts, letter of recommendation, army
81
discharge papers (for males), and other supporting documents such as professional
licenses; 2) the personnel departments or a selection committee reviews the
applicant's credentials. The applicants who pass the first screening process will be
asked to take written tests on subjects ranging from English to economics and
other job-related topics; 3) the applicants who pass the second screening process
are invited to have personal interviews with the company's high-ranking officers,
including its president, the executive managing director, the personnel director,
and the department manager. The interview is to assess the personal characteristics
of the applicant. This is the phase in which family, school, and regional ties with
the people in the power structure can play a critical role. Koreans generally
consider such ties as a major asset; and 4) the applicants are then notified of the
outcome of the interview. The successful applicants are asked to take a physical
examination and submit the necessary documents for employment.
Training and Development:
Once new employees are hired, they go
through rigorous training and development programs, which start with extensive
orientation programs. Hyundai business group, for example, has a four-week
orientation program in Seoul and Ulsan, which covers sixty-two subjects in 184
hours. The curriculum includes moral education (36.8%), organizational life and
physical fitness (26.2%), plant visits (21.2%), and basic job knowledge (15.8%).
Hyundai also sends the newly hired employees to remote villages to practice their
salesmanship. Samsung business group has a twenty-four-week orientation and
training program in its Yongin Comprehensive Training Center, which covers a
wide range of subjects ranging from corporate history to technical skills. LuckyGoldstar has a two-week orientation program in its Incheon and Lichon training
facilities, which is then followed by one week of computer education and three
82
weeks of group-life education. In the last week of this orientation, new employees
participate in physical exercise by hiking thirty miles over mountains. Daewoo's
orientation program is composed of eleven days and ten nights in Buchon and
Incheon. Investment simulation, lectures, and plant visits comprise the core of the
orientation program.
Training and development is a continuous process in Korean firms. Korean
firms perceive training and development as their key to increasing productivity and
maintaining international competitiveness. As a consequence, they have established
formal training institutes and provide their employees with continuous training on a
regular basis.
Hyundai,
for
example,
established
comprehensive
manpower
development center in 1980 and reeducated its 21,000 college-educated

employees. Its aim is to enhance international competitiveness through training in
management, technical subjects, foreign languages, and international business.
Hyundai's policy dictates that
college-educated employees take
special
comprehensive education at the training center once every three years. A onemonth long program includes 70 hours of English and 110 hours of job-related
skills. Performance in this training is evaluated through test scores and it is directly
linked to promotion and bonuses. Bonuses of 50 to 450 percent of regular salary
hinge on this performance.
One unique feature of the training and development in corporate Korea is
the emphasis on foreign languages and international business. As their livelihood
depends on foreign trade, Korean firms place heavy emphasis on foreign languages
including English, Japanese, Chinese, French, Spanish, German, Arabic, Malay,
and Indonesian. Foreign languages are taught internally and externally. The
83
Foreign Language University in Seoul is a popular place for off-the-job training in

foreign languages. A group of fifty to a hundred students spends a semester at this
university, usually after work.
Although basic training is done at their internal training institutes, most
companies use universities and overseas assignments as ways of developing an
employee's managerial talents. These companies pay the educational expenses for
those employees who pursue advanced degrees at these institutions - both
domestic and international.
Establishment of R&D and Technical Training Facilities
Establishment of Research Centers:
Since the early 1980s, firms have
increasingly become aware of the need for improving their technological

development capabilities and have begun to establish in-house research centers.
The number of in-house research centers was only 53 in 1981, but it reached 100
in 1985 and 500 in 1988. The number surpassed 1,000 in 1991. Since the early
1980s, the establishment of in-house research centers has been led by large
enterprises. However, starting from the latter part of 1980s, small and medium
firms have actively participated in establishing their own research centers.10
Recently, the number of overseas research center have been increasing. They
are usually as an overseas branch of an in-house research center and are mostly
concentrated in Japan and the United States. Table 20 shows the status of various
overseas research centers operated by Korean firms.
10The ratio of the number of in-house research centers between large enterprises and
small and medium enterprises was 88:12 in 1985 and the ratio was reversed in 1989 to 45:55. As
of the end of 1990, there are 419 research centers run by large enterprise and 547 operated by
small and medium enterprises. Korea Industrial Technology Promotion Association, White
Paper on Industrial Technology ( 1991), 36-7.
84
TABLE 20
OVERSEAS RESEARCH CENTERS OF KOREAN FIRMS
(AS OF JULY 1991)
Name of
Research Center
Japan Branch of Samsung Integrated
Research Center
New Jersey Branch of Samsung
Integrated Research Center
US East Region R&D Center, Korea
Petroleum Corporation
Osaka Branch of Samsung Electronics
Company
Young Chang R& D Institute
TriGem R&D Center

Phoenix Institute, Gold Star Commuunication Company
Tokyo Branch of Central Technology
Institute. Kia Motor Company
Location of
Facilities
No. of
Researchers
Approval
Date
Tokvo. Japan
Sept. 9.1987
New Jersey. USA
Oct. 10.1989
Connecticut, USA
Mar. 10.1990
Osaka. Japan
Jan. 8. 1991
Massachusetts,
USA
15
Jan. 8, 1991
Santa Clara. USA
10
Apr. 4. 1991
Santa Clara. USA
11
Mav 13.1991
Tokyo. Japan
12
Jun. 13, 1991
Source: ibid., 40.
Establishment of In-house Technical Colleges (Graduate School): An inhouse technical college was first established by Ssang Yong Group in 1983 with
the aim of fostering required technical personnel by the group itself and promoting
the technological level of the junior technical college. In the same year, Korea
Electric Technology Company founded a graduate course and in 1990, other
business groups including Daewoo, Hanjin, Samsung, Korea Communication, and
Hyun Dai followed suit. Since then, 18 in-house technical colleges have been
established and are currently being operated. As the classes being offered are nonregular courses, degrees are not awarded, but graduates get special treatment in
85
salary and promotion.11 Table 21 shows the status of in-house technical colleges
(graduate school) established and operated by Korean firms.
TABLE 21
STATUS OF IN-HOUSE TECHNICAL COLLEGES
AND GRADUATE SCHOOLS
Junior Technical College
Technical College
Daewoo Group
Korea Electric Company
Daewoo Group(Attached
to Aju University)
Pohang Iron & Steel
Company
Hyun Dai Electronics
Company
Ssang Yong Group
Hanjin Group
Korea Communication
Company
Daewoo Group(Attached
to Aju University)
Samsung Electronic
(Information systems & Semi
conductor Sectors)
Graduate School
Samsung Electronics (Con
sumer Electronics Sector)
Samsung Electronics (Infor
mation Systems Sector)
Cheil Textiles & Fibers Co.
Hyun Dai Engineering Co.
Daewoo Electronics Co.
Korea Electric Technology
Co.
Korea Electric and Commu
nication Corporation
Source: ibid., 303
u Korea Industrial Technology Promotion Association. White Paper on Industrial Tech

nology (1991), 301-303.
86
The Role o f Government in Supporting National System o f Innovation
The technological capability of a nation determines the successful

industrialization of its national economy.
Depending on the shortage of
institutional frameworks, legal bases and qualified people, various approaches,

differing from country to country, can be devised in developing appropriate
institutions and infrastructures conducive to the development of technology.
Ever since the start of Korean industrialization in 1962,12 the importance
of science and technology has been recognized as a major force behind Koreas
industrialization and economic development. As a result, the development of
science and technology has become an integral part of consecutive five-year
economic development plans13 while the predominant policy objective is the
building-up of infrastructures involving a great variety of institutions and legal
measures for the promotion of science and technology development.
Establishment of Institutional Foundation for Developing Science and Technology
Establishment of the Ministry of Science and Technology
After the successful completion of
the First Five Year Economic
Development Plan, the Korean government felt the need for the central planning
and a coordinating and promotional body in the government.
12This is the first year when the First Five Year Economic Development was launched.
The initial condition before 1962 was meager. From 1959 to 1961, for instance, the GNP growth
rate averaged 3.3 per cent per annum while population growth was 2.9 per cent which leaves a
0.4 per cent net increase and the per capita GNP was under S100 . Also a severe dichotomy
existed within the economic structure, that is, 65 per cent of total employment was in the
primary industries while secondary industries (mining and manufacturing) accounted for only 6.9
per cent The domestic savings ratio to GNP in this period was only 3 per cent. Huyng Sup Choi.
Role o f Various Stages o f Technology Relevant to Developing Countries: a Keynote Address
Prepared for the Third Inter-Congress of the Pacific Science Association, July 18-22, 1977, Bali,
Indonesia, pp. 5-6.
13In parallel with the Five Year Economic Development Plan, the Five Year Plan for
the Promotion of Science and Technology was formulated and implemented.
87
TABLE 22
SUMMARY OF THE MAIN FEATURES OF THE LONG-TERM SCIENCE
AND TECHNOLOGY DEVELOPMENT PLAN
Industrialization
Strategy
Science & Technology

Development Strategy
1960s
1. Develop import-substitute
industries.
2. Expand export-oriented
light industries.
3. Support producer goods
industries.
1. Strengthen science &

technology education.
2. Build scientific technological
infrastructure.
3. Promote foreign technology
imports.
1970s
1. Expand heavy'and chemical

industries.
2. Shift emphasis from capital
import to technology import.
3. Strengthen export-oriented
industry competitiveness.
1 . Expand strategically
important skill training
2. Improve institutional mechanism
for adapting imported technology
3. Promote research applied to
industrial needs
1980s
I. Promote international confidence

in Korean industrial products.
1. Expand facilities for advanced

scientific and engineering man
power.
2. Develop export of technology
and engineering know-how.
3. Promote long-term advanced
research and strengthen
system research.
2. Develop exports of technologyintensive products

3. Expand knowledge-intensive
industries.
Source: Korea Economic Research Center, The Problems o f the Technology Development
Strategies in the 80's and the Policy Proposals fo r the 90's (Seoul: The Korea Chamber of
Commerce & Industry, 1992), 91.
In 1967, the Ministry of Science and Technology (MOST) was established

for that purpose. The first major effort undertaken by MOST upon its
establishment was the formulation of the Long-Term Plan for Science and
Technology Development, covering twenty years firom 1968 to 1986.
88
Table 22 outlines the main features of the plan in terms of
both
industrialization strategy and science and technology development strategy.

Current Organizational Structure Supporting National Science and Technology
Policy
Besides MOST, several other ministries are involved in the development of
science and technology. Specific plans and problems related to a given field in
science and technology are dealt with by the appropriate ministries.
The policies supporting industrial technology - the most important policy in
improving national technological capability - are implemented mainly by both
MOST and the Ministry of Commerce and Industry (MOCI). Table 23 summarizes
the major administrative affairs related to technology handled by MOST and
MOCI. The Ministry of Science and Technology is mostly in charge of
administrative matters related to the promotion of science and technology while
the Ministry of Commerce and Industry is in charge of matters related to the
improvement of industrial technology and to the development of technology
closely connected with industrial policy. On the other hand, the Ministry of
Education is in charge of implementing policy related to securing industrial
technical manpower through training at universities and graduate schools. Other
ministries such as the Ministry of Agriculture and Fishery, Office of Forestry, the
Ministry of Construction, and the Ministry of Power and Resources are also
engaged in spreading the development of technologies through affiliated research
institutes.
89
TABLE 23
MAJOR BUSINESSES OF MOST AND MOCI
MOST
Establishment and coordination of science
and technology promotion policies
Research on the science and technology
assistance system and operation of it.
Implementation of specific R&D projects.
Management of research institutes.
Establishment of policy related to informa
tion systems technology.
Training and education o f science and
technology manpower.
MOCI
* Establishment and implementation of
industrial policy.
Operation of technology import system.
Business related to quality improvement of
manufactured goods.
Business related to patents and standardiza
tion.
Implementing localization of machinery and
parts.
Encouragement of commercialization of new
technology.
Operation of Technology Development
Funds.
Source: MOST and MOCI.
In addition to the administrative organizations described above, the

National Council for Science and Technology, the Deliberation Committee for
Integrated Science and Technology, and the Committee for Science and
Technology Promotion were established and are being operated on a pan-national
level in order to integrate and coordinate science and technology policies. Figure 3
portrays the integration and coordination mechanism of national science and
technology policies.
90
FIGURE 3
INTEGRATION AND COORDINATION MECHANISM
FOR SCIENCE AND TECHNOLOGY POLICY
[ Pan-national Level]
National Council for Science & Technology
Deliberation Committee for Integrated

Science & Technology
[ Cabinet Level]
Chairman: Prime Minster

Members: 15 ministers +Adviser(l)
Coordination Committee
[ Working Level]
Members: Representatives from Ministries

Concemed(17 persons)
o Established as a
constitutional
organization
o Delierate on plans for
intergating and coordi
nating comrehensive
plans, major policies,
and concerned ministries'
affairs related to science
and technology
o Pre-review of agenda
to be delibered
o Review and adjustment
of policies and projects
10 Sub-committees(Deliberation by Sector)
Special Committees at Ministries Concerned

o Deliberation Committee for Industry Development (MOCI)
o Policy Committee for Aero-space Idustry (MOCI)
o Committee for Academic Promotion (MOE)
o Policy Committee for Development o f Alternative Energies(MOPE)
o National Coordination Committee for Communication(MOC)
o Atomic Energy Committee(MOST)
o Policy Deliberation Committee for Basic Science Research(MOST)
Deputy Prime Minister
High-tech Industry
Industrial Policy
Development Committee Deliberation Committee
Economic Ministers'
Meeting
Planning Meeting at
Ministries Concerned
Source: MOST, Science and Technology Annals, 1991.
91
Transition of Science and Technology Policies in Korea

and Its Characteristics
The process of technological development in Korea starting from
Liberation and moving up to the 1980s can be divided into two phases: the
advanced technology importation phase (1960s-1970s) and the advanced
technology absorption phase (1980s). The advanced technology importation phase
can be divided into two periods:
1) the period of establishing institutions for
science and technology in the 1960s and 2) the period of establishing a foundation
for science and technology in the 1970s. The advanced technology absorption
phase in the 80s not only includes strategies for adopting and improving advanced
technologies to meet local market conditions, but it also includes the strategies for
increasing international market shares through mass production and advancing
product quality as well as strategies for applying and developing advanced
technologies. The strategies for developing science and technology in
historical phases can be characterized as
the
dependence-type (1960s), dependence
and imitation-type (1970s), and imitation and defensive-type (1980s).14

Period of Establishing Institutions for Science and Technology (19605)
Industrial policy in the 1960s was to establish a basis for industrialization
through the promotion of both strategic import substitution industries and exportoriented light industries while totally depending on the production facilities and
technologies of advanced countries.. The major activity in the science and
technology sector in this period was to solve problems resulting from applying the
imported technology to the production process and, accordingly, the technology
14Korea Economic Research Center, The Problems o f the Technology Development
Strategies in the 80's and the Policy Proposals fo r the 90's (Seoul: The Korea Chamber of
Commerce & Industry, 1992), 76-83.
92
development strategy was to lay an institutional foundation for science and

technology promotion through establishment of administrative organizations and
legal frameworks, expansion of science and technology education, and
the
importation of advanced technologies. Table 24 summarizes the science and

technology policies of the 60s.
TABLE 24
SCIENCE AND TECHNOLOGY POLICIES OF THE 1960s
Formation of Organizations
Legal Frameworks
Mid and Long-term Plans
Bureau of Technology
Management within Econo
mic Planning Board(1962)
Science and Technology

Promotion Law (1967)
First and Second Five-year

Plans for Technology Pro
motion
Ministry of Science and

Technology(1967)
Science Education Promot

ion Law (1967)
Korea Institute of Science

and Technology(KIST)
(1966)
Law Concerning Vocational

Training (1967)
Long-term Comprehensive
Plan for Science and Tech
nology (1967 -1986)
Forecast of Long-term
Supply and Demand of
Manpower( 1967-1986)
Science and Technology

Information Ccnter(1962)
Law Concerning Engineer

(1963)
Source: Korea Economic Research Center, The Problems o f the Technology Development
Strategies in the 80s and the Policy Proposals fo r the 90's(Seoul: The Korea Chamber of
Commerce & Industry, 1992
As an institution in charge of establishing a comprehensive basic policy for

the promotion of science and technology and responsible for coordinating and
managing the administration o f science and technology', the Bureau of Technology
93
management was established in 1962 within the Economic Planning Board. In the
same year, the Korean Science and Technology Information Center was founded
to assist industry by acting as a window for technology imports, where necessary,
and as an information clearing house in technology transfer. In 1966 the
government founded the Korean Institute for Science and Technology (KIST)15
as an institute for research and applied science (operating in part under contracts
from big industries) to provide innovations in manufactured commodities,
especially in the field of electronics. By establishing the Ministry of Science and
Technology in 1967, the Korean government centralized the functions of
formulating, implementing, and coordinating basic policies and plans as well as the
budgets concerning scientific and technological development.
Various laws were enacted in this period to provide legal frameworks for
supporting the promotion of
science and technology. First, the Law on
Professional Engineers was enacted in 1963 in order to secure technical manpower

required for the efficient implementation of long-term economic development plans
and to improve their capabilities. The Science and Technology Promotion Law
was enacted in 1967 to promote and coordinate matters pertaining to: (a) overall
science and technology policies and plans, including manpower policies and plans,
(b) establishment of systems and policy instruments for implementing such policies
and plans, and (c) budget allocation. The Industrial Standardization Law was
promulgated in 1961 and the Korean Standard (KS) system was implemented in
1963 to promote international commerce and cooperation for science and
technology. In 1966, the Foreign Capital Inducement Law was enacted to promote
15KIST sought to bring leading Korean scientists and engineers residing abroad back to
Korea by offering international-level salaries. As a result, many7 high-level Korean scientists
returned and joined Korea's scientific research efforts. These scientists and engineers also worked
on industrial applications, thereby contributing to the quality of Korean manufacturing.
94
imports of advanced foreign technologies. In addition, as an incentive for

technology imports, tax reductions were awarded on the payment of royalty.
In short, this period can be called the period of establishing a foundation
for research and development. Table 25 summarizes the aspects of industrial
economy and science and technology in this period.
TABLE 25
ASPECTS OF INDUSTRIAL ECONOMY, AND SCIENCE
AND TECHNOLOGY (1960s)
Aspects of Industrial Economy
Aspects of Science and Technology
-Industrial structure based on labor and

technology-intensive light industries
-Promotion of consumer products industries
and import substitution( Textiles, Cement,
etc.)
-Import substitution of intermediate goods(oil
refinery, etc.)
-Formation of social infra-structure
-Imports of capital goods
[Major Manpower]- Simple-skill workers

[Size of Investment]- 0.3% level of GNP
[Technology Transfer]- Import of out-moded
technologies
-Technologies
embedded
in capital goods
[Research & Development] - Imitation of
foreign technologies
[Status of Technology]- Status incidental to
industrial economy
Source: ibid. 78.
Period of Establishing A Foundation for Science and Technology (1970s)

In this period, the industrial structure changed from labor-intensive light
industry to technology-intensive heavy and chemical industry. Accordingly, the
demand for industrial technologies to support the heavy and chemical industry was
95
enormous. However, due to the lack of accumulated technological capability, the

supply of needed industrial technologies was mostly depended upon foreign
sources.
The science and technology policy in this period has been, therefore, to
expand the basis of science and technology based on the institutional frameworks
laid out in the 60s. Table 26 summarizes the characteristics of science and
technology policies in this period.
TABLE 26
SCIENCE AND TECHNOLOGY POLICIES IN THE 1970S
Formation of Organizations
Legal Frameworks
Infrastructures for
Projects Planned
Third and Fourth Five-year
Plans for Science and Tech
nology Sector
Construction of Hongnung
Research Complex
Korea Advanced Science

Institute (KASI) (1970)
Technology Development
Office of Industry Promo

tion (1973)
Technology Assistance
Systems such as tax reduc
tion and financing
Special Research Institutes

(1975-8)
Engineering Services
Atomic Energy Institute

(1973)
Special Research Institutes

Promotion Lawr (1974)
Conception of Dae Duk

Research Complex and
Beginning of Construction
Creation of Environment
for Science and Technology
National Technical Qualification Law (1973)_______
Nation-wide Science Move

ment
Source: ibid., 79.
96
The Korea Advanced Institute of Science (KAIS) was established as a

mission-oriented post-graduate school in selected applied sciences and engineering
to meet the emerging needs of Korean industry. The Technology Promotion Law
was enacted in 1972 to support private and public corporate enterprises in their
scientific and technological development efforts through tax privileges and other
incentives. The Engineering Services Promotion Law was put into effect in 1973
to provide for the strengthening of the capabilities of local engineering firms and
for using them. The National Technical Qualification Law was promulgated in
1973, through a system of examinations and certifications, to promote the status of
engineers and craftsmen and to insure their proper recognition in society. The Law
for Assistance to Special Research Institutes was enacted in 1973 to provide
incentives in legal and financial terms for research institutes in specialized fields of
high priority such as shipbuilding, electronics, communication, mechanical and
materials engineering and energy. Under this law, a total of 12 research institutes
were established in this period. In addition, various financial and tax incentives as
well as support systems16 were provided to promote technological development in
this period. Table 27 shows the characteristic aspects of the industrial economy
and science and technology in the 1970s.
16For supporting technological development with tax privileges, the following incentives
were provided: inclusion of reserve for technology development into business loss (1972); tax
reduction on the investment for new product development (1974); tax reduction or special
depreciation on investment on research laboratory equipment (1976); income tax reduction on
engineering services (1977). For financial support, the following sources of funds were
established: technology assistance fund at the Korea Development Bank (1976); technology
development and quality improvement funds at the Small and Medium Industry Bank; Venture
Capital Funds at die Korea Technology Promotion Corporation (1974) and Long-Term Credit
Bank (1979).
97
Maturity Period of Science and Technology Policies (1980s)

Entering the 1980s, Korea faced entirely different domestic and
international economic environments from those of the 1970s.
The second oil
shock and the resultant world-wide recession put the advanced countries in a
protectionist mood with regard to international trade and technology transfer.
TABLE 27
ASPECTS OF INDUSTRIAL ECONOMY, AND SCIENCE

AND TECHNOLOGY (1970s)
Aspects of Science and Technology
Aspects of Industrial Economy
[Major Manpower]- Skilled technicians and

craftsmen
[Size of Investment]- 0.3% - 0.7% of GNP
[Technology Transfer]- Import of technolo
gies at declining or
mature stages
- Vertical division of
labor relations
[Research & Dev elopment] - Imitation and
reverse engineering
[Status of Technology']- Status supporting
heavy and chemical
industries
-recognized the
importance of
importing core
technologies
-Industrial structure based on technology

intensive heavy and chemical industries
-Promotion of heavy and chemical industries
and import substitution( Textiles, Shipbuild
ing, general machinery, and electronics, etc.)
-Export industrialization of consumer and
intermediate goods
-Initiation of social development
-Inducement of foreign capitals for importing
capital goods
Source: ibid., 81.
98
Under these circumstances, the Korean government has placed strategic

emphasis on technology development
and it has implemented various policy
measures to assist the promotion of science and technology with special attention
being given to the technological capabilities of private firms.
To implement the development of industrial technology at the national
level, the Technology Promotion Expansion Meeting was established in 1982 to
be presided over by President. As a consultative body among the ministries
concerned, the Technology Promotion Meeting was established to coordinate
policy measures related to technology development.
To streamline the control and management of public research institutes
and reduce duplication, in 1981 the government reorganized and merged
16
institutes that had been under the control of several different ministries into 9
large-scale integrated research institutes17 and placed them under the control of the
Ministry of Science and Technology.
Furthermore, various measures such as tax privileges and financial
assistance18 were provided by the government in this period to promote the
development of industrial technologies.
17They are: 1) Korea Advanced Institute of Science and Technolog} (KAIST); 2) Korea
Institute of Energy and Resources (KIER); 3) Korea Institute of Machinery and Metal (KIMM);
4) Korea Electrotechnology and Telecommunications Research Institute (KETRI); 5) Korea
Standard Research Institute (KSRI); 6) Korea Institute of Electronics Technology (KIET); 7)
Korea Research Institute of Chemical Technology (KRICT); 8) Korea Ginseng and Tobacco
Research Institute (KGTRI); and 9) Korea Advanced Energy Research Institute (KAERI).
18The assistance measures through tax system included: tax reduction on technology and
manpower development (1981); reduction of local tax on property for research institutes of
private firms (1981): application of a temporary rate of special consumption tax to products
leading to technological development (1981); income tax reduction on foreign engineers (1981);
Tariff reduction on research equipment (1982); exemption of special consumption tax on
research samples (1982); non-inclusion of profits from stock transfer of new technology
ventures into business profits (1984); and tax privileges to newly established technology-intensive
small and medium firms (1986). The financial assistance measures include: technology
development and venture capital funds at the Korea Technology Development Company (1981):
99
Development of Industrial Technology Through Inducement of

Foreign Technologies
The Transition of Technology Importation Policy
The policy for foreign technology importation in Korea has evolved
gradually from tight restrictions toward lessening those restrictions and increasing
liberalization. The process of policy transition can be broadly divided into three
periods: restriction period (1960-1969); restriction relaxation period (1970-1977)
and; liberalization period( 1978 - ).19
Restriction Period (\ 960-691:
The Law for the Promotion of Foreign
Capital Inducement was enacted in 1960 to actively promote the inducement of

foreign capital. However, the policy tone later became more passive due to
Koreas worsening international position. In 1966, both the Law for the Promotion
of Foreign Capital Inducement and the Law for Payment Guarantee Against Long
term Settlements were merged into the Foreign Capital Inducement Law to restrict
technology importation in a qualitative way.
Despite the restriction, technology importation was greatly increased for
import substitution in key industries and for simple processing technology in laborintensive light industries. In key industries, the major type of technology import
was foreign direct investment in the form of turn-key projects and plant exports. In
light industry, technology was imported in the form of joint-venture for simple
processing technologies or technology licensing.
financial assistance for technology development and quality improvement through National
Investment Fund (1982); technology development funds for small and medium industry at
commercial banks (1983); and technology development funds at the Citizens' National Bank and
the Korea Technology Finance Company (1984).
l9An Analysis on the Effects o f Technology Importation (1989), 13-7.
100
Restriction Relaxation Period f l 970-771: With the full-scale implemen

tation o f policy for the promotion o f heavy and chemical industry, demands for
importing appropriate technologies w ere greatly increased in the same industries.
Accordingly, the government switched its policy for technology imports from
restriction to the encouragement o f foreign direct and joint-venture investments in
order to substitute foreign loans and to take advantage o f the effects o f technology
transfer accompanying the investments. In 1973, "Rules for Adjusting the Ratio o f
Foreign Investment" were established to encourage m ore joint-venture investment
than wholly-owned foreign direct investment. The Foreign Capital Inducement
Law was amended in full scale to include new restrictive conditions on foreign
investment and to simplify the procedures for technology imports. Also, the
Technology Development Promotion Law was enacted in 1972 to support private
and public corporate enterprises in their scientific and technological development
efforts through tax privileges and other incentives. In addition, to help potential
end-users o f foreign technology, the government assisted in the establishment o f
the Technology Transfer Center at KIST and the technology transfer data bank at
the K orea Scientific and Technological Information Center.
Liberalization Period (1978-1:
The
burdens on the economy o f over
extended and, in some cases, duplicated investment in the heavy and chemical
industry w ere increasingly heavy and the need for operating the national economy
under market mechanisms through the liberalization o f economic activities
emerged as pressing issues during this period. M oreover, the importance o f
technological development by the initiative o f private sector w as much greater than
ever before.
101
Under these circumstances,
the government began to
liberalize the
importation of foreign technologies on a gradual basis. Since 1978, seven phases

of liberalization measures have been taken by the government. The first phase of
liberalization measures began in 1978 to divide the procedures of evaluating
contracts for foreign technology importation into three categories: automatic
approval, quasi-automatic approval, and individual evaluation.20 The second phase
of liberalization measures started in 1979 to abolish the quasi-automatic approval
category which would maintain a dual system of evaluation and expand the range
of automatic approval category to include all industries except atomic energy and
defense industries. Also, conditions of approval were relaxed.21 The third phase of
measures were taken in 1980 to expand the range of automatic approval category
to all industries and to relax the conditions for automatic approval.22 The fourth
liberalization measures were enacted in 1982 to simplify the evaluation procedures,
and the fifth liberalization measures followed in 1984 to completely abolish the
individual evaluation method and to change the approval system into the report
20The automatic approval category applies to the contract of foreign technology
importation which meets the following conditions: 1)
for such industries as machinery,
shipbuilding, metals, electric, electronics, chemicals, and textiles; 2) for contract amount of less
than $100,000; 3) for less than $30,000 for royalty in the form of downpayment and for regular
royalty of less than 3% of gross sale or for fixed payment. The individual evaluation category
applies to the contact for the importation of technologies related to industries such as atomic
energy, computer systems, and defense industries meeting with at least one of the following
conditions: 1) for contract period exceeding 10 years; 2) for regular royalty payment exceeding
10 % of gross sales; 3) for downpayment exceeding $1 million. The quasi-automatic approval
category applies to the contract not covered by either automatic approval category or individual
evaluation category.
21Foreign technology import is to be approved automatically when: 1) the contract
period is less than 10 years; 2) the downpayment is less than $30,000; 3) the regular royalty is
less than 10 % of gross sales or less than $1 million in the case of fixed payment.
22The contract is to be approved automatically when the contract period is less than 10
years and the regular royalty is less than 10 % of gross sales.
102
system. With these final measures, complete liberalization of technology imports

was realized in formality.23 The sixth phase of liberalization measures were taken
in 1986 to refurbish systems related to technology importation and to allow
imports for the use of brand names. With these measures, tax reduction on royalty
was curtailed. The seventh phase of liberalization measures began in 1988 to
transfer the management of technology imports to foreign exchange banks except
in some cases of importation.24
Roles and Characteristics of Imported Technologies
In Korea the import of technology started in a formal fashion with the
enactment of the Foreign Capital Inducement Promotion Law in 1962, and the
foreign capital and technology importation that took place in the 1960s during the
process of industrialization played a vital role in Korea's industrial development.
In the process of laying the foundation for industrialization, the country
was lacking both capital and technology. As a result, the imported technology was
in most cases an integral part of investment in all necessary equipment, technology,
and technological services for the construction of an industrial factory. In general,
the importation of foreign technologies in Korea has been made through three
23The Minister of finance holds the right to reject the report for the importation of
technologies as follows: 1) for the use of simple utility design/brand name, and use of exclusive
sales right; 2) for sales of raw materials, parts or accessories; 3) technology imports containing
such unfair condition as export restraint; 4) low-level or out-moded technologies; 5) when
restriction is required to promote domestic development of the technologies; and 6) technology
import restricted by other laws.
24The exceptions are: 1) for the contract having a contract period exceeding 3 years
and for fixed royally payment exceeding $100,000 or 2) for the contract having a contract period
exceeding 3 years and regular royalty payment exceeding 3% of the gross sales (or downpayment
exceeding $50,000).
103
channels: foreign direct investment (FDI), foreign licensing (FL) and capital goods
imports.
Foreign Direct Investment: Foreign investments in Korea started as early
as 1962. Korea's policies concerning direct foreign investment as well as foreign
licensing were, however, quite restrictive in the 60s when technology was not a
critical element and mature technologies could be easily acquired through mecha
nisms other than foreign investments such as reverse engineering.25 During the
first and second
Five-year Economic Plans, the total amount of
foreign
investment was no more than $100 million. But, after 1972 when the government
relaxed its restrictive policy for foreign technology imports in order to discourage
foreign loans and encourage foreign direct investment, foreign investment during
the third Five-year Economic Development Plan (1972-76) amounted to $565
million due to a sharp increase in investment from Japan. During the Fourth Fiveyear Economic Development Plan (1977-81), the rate of increase in foreign
investment was somewhat slow owing to the after- shocks of the second oil crisis.
But, during the Fifth Five-year Economic Development Plan (1982-86), foreign
investments recorded phenomenal growth totaling $1,766 million with 565 cases.26
Table 28 shows the trend of foreign investment in Korea during the 1980s. Foreign
investments have increased sharply since the latter half of the 1980s. However,
after 1990, foreign investment has been decreasing both in the number of
investment cases and invest amount.
25Unsu Kim (1993). 360.

26The Korea Development Bank. An Analysis on the Effects o f Technology Imports
(1991), 37.
104
TABLE 28
TRENDS OF FOREIGN INVESTMENT IN KOREA
(ON APPROVAL BASIS)
1962-
1977-
1982-
1987-
1990
1991
1992
76
81
86
89
Case
1,240
244
565
1,041
295
286
Amount($ million)
1.145
721
1.768
233
3.904
3.447
803
1.396
894
10.174
Total
Source: Ministry o f Finance, Monthly Financial Statistics (November 1993), 77-8.
Foreign Licensing: The second form o f foreign technology importation is

technology licensing which includes the use o f patents rights, trade marks, brand
name, and technical information and data. Like foreign direct investment,
technology licensing was restricted in the 60s and it began to increase from the
latter part o f the 70s thanks to the gradual liberalization policy o f the government
for technology imports.
Table 29 shows foreign technology allowances o f selected countries. From
1962 through the end o f August 1993, a total o f 8,506 cases o f technology
imports have been approved. Among them, 4,234 cases, 49.8% o f technology
imports, w ere from Japan. The United States comes next with 2,289 cases, 26.9 %
o f technology imports. B oth Japan and the United States cover more than 75 % o f
technology licensing which Korea has acquired in this period. One noteworthy
point is that the number o f technology licensing has been decreasing since 1990. It
may reflect the fact that the technological capabilities o f Korean firms have
significantly improved in the 80s o r that advanced countries have been reluctant to
105
transfer technology in order to protect their intellectual property rights from being
imitated by other countries.
TABLE 29
ALLOWANCES OF FOREIGN TECHNOLOGY BY NATION*
Year\Nation
Total
USA.
Japan
Germany
France
Britain
Others
1962-1971
318
74
214
10
19
1972-1976
434
90
280
13
21
24
1977-1981
1,225
302
631
70
39
49
134
1982-1986
2,078
515
1,074
122
82
73
212
1987
638
180
307
35
40
21
55
1988
751
200
354
49
47
20
81
1989
763
244
343
37
41
23
75
1990
738
221
333
55
25
28
76
1991
582
165
276
34
26
27
54
1992
533
163
232
26
18
30
64
1993.1-8
446
135
190
19
16
16
70
8,506
2,289
4,234
470
341
308
864
100
26.9
49.8
5.5
4.0
3.6
10.2
Total
Ratio(%)
Source: Ministry of Science and Technology, Report on the Survey o f Research and
Development in Science and Technology, 1991; MOF, Monthly Financial Statistics, November
1993.
unit: number of cases.
By industry, as of August 31, 1993, more than 65 % of the total cases of

technology imports were made by three industries: oil refinery and chemicals
(16.2%), Electrical and Electronics equipment (25.0), and machinery (26.3) (See
Table 30).
106
TABLE 30
FOREIGN TECHNOLOGY ALLOWANCES BY NATION AND FIELD

(AS OF AUGUST 31,1993)
Ficld\Nation
Agriculture & Livestock
Total
USA
Japan
40(0.5)
13
22
264(3.1)
97
Pulp & Paper
32(0.3)
Textile
Germ.
UK
France
Others
117
10
22
11
15
65(0.8)
19
23
14
Chemical textile
408(4.8)
76
139
10
17
106
59
Ceramic & Cement
230(2.7)
42
137
13
11
10
17
1,375(16.2)
356
700
82
57
58
122
Drug
211(2.4)
74
59
26
11
30
Metal
435(5.1)
82
249
25
27
43
Electronics & Electrical
2,128(25.0)
810
1,028
80
27
32
148
Machinery
2,234(26.3)
386
1,349
157
107
50
185
Shipbuilding
230(2.7)
28
53
28
18
18
85
Communications
122(1.4)
50
44
22
99(1.2)
61
21
Construction
150(1.8)
40
70
27
Others
483(5.7)
144
208
23
32
66
8.506(100)
2.289
4,234
470
308
341
864
Foods
Oil refin. & Chemicals
Electric Power
Total
Source: Ministry of Science and Technology, Report on the Survey o f Research and Development
in Science and Technology, 1991.
3unit: number of cases and the figures in the parentheses represent percentage rate.
In terms of payment for foreign licensing imports, a total of $4,926 million

was paid during the period of 1962-1990. From 1984 to 1990 payment amounted
to $4,095 million or 83.1% of total payments. This was due to the increase of
107
technology imports after 1984 when the government adopted the report system
instead of the approval system for technology imports. During this period, 46.5 %
of the payments went to the United States while Japan received 31.2 % of the
payments.
TABLE 31
FOREIGN TECHNOLOGY ALLOWANCES AND PAYMENTS BY NATION1*
Year\Nation
Total
U.S. A
Japan
Germany
1962-1971
17.0
8.4
5.0
4.5
1971-1976
96.6
21.3
58.7
5.6
1.6
9.4
1977-1981
451.3
159.2
139.8
14.0
14.3
124.1
1982-1986
1,184.9
602.7
323.7
49.0
34.7
174.8
1987
523.7
239.9
181.4
18.6
25.1
58.7
1988
676.3
330.0
214.7
22.1
47.9
61.6
1989
888.6
415.7
273.9
52.8
39.9
106.3
1990
1.087.0
514.1
341.4
59.3
29.9
142.3
Total
4,925.5
2,291.3
1,538.6
224.0
193.4
678.2
100
46.5
31.2
4.5
3.9
13.8
Ratio(%)
France
Others
1.0
Source: Ministry of Science and Technology, Report on the Survey o f Research and
Development in Science and Technology, 1991.
unit: US$ million.
The major type of
technical licensing was the use of patent rights
representing almost 50 % of all technical licensing during the period of 1980-91.

Technical licensing involving the use of brand names accounted for 23.3% in the
same period. However, technical licensing involving the simple use of brand
108
names has been increasing since the latter half of the 80s due to allowances made
by the government in July, 1986 for technical licensing involving the simple use of
brand names.
TABLE 32
TYPES OF TECHNICAL LICENSING IMPORTED*
81
84
86
88
89
90
81-90
247
437
517
751
763
738
5,214
* Accompanied with
patents
132
(53.4)
191
(43.7)
255
(49.3)
325
(43.3)
365
(47.8)
333
(45.1)
2,52
(47.0)
* Accompanied with
brand name
66
(26.7)
96
(22.0)
108
(20.9)
183
(24.4)
189
(24.8)
157
(21.3)
1,213
(23.3)
* Brand name alone
29
(11.7)
38
(8.7)
55
(10.6)
110
(14.7)
95
(12.5)
70
(9.5)
591
(11.3)
Total Technical Licensing
Source: ibid., 29.

Note: 1) The figures in parentheses represent percentage rate
2) Total technical licensing includes technical information, data, and consul
tancy.
unit: number of cases.
Capital Good Imports: Another form of technology acquisition is capital

good importation. Korea has acquired more technology from advanced countries
through the importation o f capital goods than through the other two forms of
technology acquisition. This may be because the government policy was biased in
109
favor of the importation of foreign capital goods and against the development of a
rudimentary local capital goods industry as a way to strengthen international
competitiveness of the capital-intensive industries. Such a policy led to massive
imports of foreign capital goods, which became a major source of learning through
reverse engineering.27
Table 33 shows the trends of capital goods imports in the 1980s.
TABLE 33
TRENDS OF CAPITAL GOODS IMPORTS
Capital Good Imports3

Capital Goods/Total Imports (%)
80
82
84
86
88
90
5.125
6,233
10,106
11,340
19,033
25.451
23.0
25.7
33.0
35.9
36.7
36.4
Source: The Korea Development Bank, An Analysis on the Effects o f Technology Imports
(1991), 37.
unit: US$ million.
In short, Korea restricted foreign direct investment but promoted instead

technology transfer through other means such as capital goods imports and
technical licensing. Table 34 summarizes the three forms of technology importa
27Linsu Kim (1993). 361.

110
tion during the 80s.
The table shows that the proportion of foreign direct
investment to total importation of foreign technologies was less than ten percent.28
TABLE 34
SUMMARY OF FOREIGN TECHNOLOGY IMPORTS
IN THE 1980S*
1980
1982
1984
1986
1988
1990
143
189
422
354
1.283
803
116
213
411
676
738
6.233
10.106
11,340
19,033
25.451
8.337
10.741
12.105
20.992
26.992
A/D
2.3
3.9
2.9
6.1
3.0
B/D
1.4
2.0
3.4
3.2
2.7
C/D
74.8
94.1
93.7
90.1
94.3
Foreign Direct Investment (A)

Technical Licensing (B)
Capital Goods Imports (C)
Total (D)
5.125
Source: Tables 28, 31, and 33.

unit: US$ million
Scientific and Technological Manpower Management

In the 1960s and through the first half of the 1970s, industrialization of
Korea was led by the export-oriented light industries based on the abundance of
low-wage workers who emigrated from rural areas. However, investment in the
technology-intensive heavy and chemical industries that started in the latter part of
28In contrast, the proportions of foreign direct investment to total foreign imports in
both Singapore and Taiwan were 91.9 % and 45% in 1987, respectively. Linsu Kim (1993). 360.
Ill
the 1970s through the 1980s created structural changes in the nation's industrial
economic system. Thereafter, the large pool o f low-skilled workers no longer be
the key advantage. The manufacturing sector o f the economy was in great demand
for high-skilled technicians. At the same time, absorption o f
workers from
declining industries became another policy task to be tackled by the government in

this period. Under these circumstances, the Korean government has established
various institutional mechanisms to promote the development o f scientific and
technological manpower. This section evaluates the characteristic features of the
manpower development system in Korea.
Characteristic Features of the Manpower Development System

The overall manpower development mechanisms o f the Korean govern
ment can be divided into tw o broad categories: mechanism for m anpower forma
tion in which various ministries are jointly o r separately involved; and mechanism
for manpower distribution administered by the Ministry o f Labor mostly through
vocational training. Figure 4 portrays the mechanisms for manpower development
in Korea.
112
FIGURE 4
MECHANISMS FOR MANPOWER DEVELOPMENT
Manpower Policy Deliberation

Council at EPB
Central
Coordination
Korea Development Institue
Formation of
manpower
Distribution o f
manpower
School
education
Training o f
advanced
manpower
Vocational
training
Vocational
Stabilization
Ministry of
Education
Ministry of
S& T
Ministry of
Home Affairs
Ministry of
Labor
Korea
Educational
Development
Institute
Ministry of
Defense
Korean
Institute of
Science &
Technology
Ministry of
Justice
Central Institute
for Vocational
Stabilization
[Vocational Training
Corporation
rocational Training
lesearch Institute
Source: Young Bum Park, et al.. The Industrial Technical Manpower and Policy Directions:
Case Study o f Korean Manufacturing Sector (Seoul: KEET, 1987), 37.
The formation of manpower is implemented by various ministries. The

Ministry of Education is in charge of manpower development through school
education. Training of technical manpower through vocational training is handled
113
by the Ministry of Labor while the development of advanced manpower is carried

out by the Ministry of Science and Technology. The Ministry of Home Affairs is in
charge of training manpower at farming and industrial areas. The Ministries of
National Defense and Justice are also participating in the manpower formation.
The Ministry of National Defense is overseeing vocational training for military
servicemen while the Ministry of Justice is providing vocational training to inmates
at the penitentiaries.
On the other hand, matters related to the distribution and coordination of
the supply and demand o f manpower are managed by the Bureau of Vocational
Stabilization at the Ministry of Labor. The overall coordination of businesses
related to manpower development is handled by the Manpower Development
Section at Economic Planning Board. Finally, major policy matters that can affect
all industries are implemented after deliberation by the Manpower Policy
Deliberation Council Meeting which is composed of the ministers from the
ministries concerned.
National Technical Qualification System:
The types of manpower
involved in the science and technology sector can be divided into three categories:
scientists, engineers, and craftsmen. The social recognition and status of engineers
and craftsmen have been, however, very low in Korean society compared with the
prestige given to scientists holding Ph.D. degrees mainly due to the Confucian
value system o f paying the highest esteem to scholars.
Thus, the technical position in the workshop, whether a technician or a
craftsman, was not popular position at all. This unproductive value system became
a major obstacle to securing qualified technicians and craftsmen essential for
industrial development. Accordingly, the Korean government has introduced the
114
national technical qualification system to satisfy the industrial sectors demand for
engineers and craftsmen by testing them using uniform criteria, and giving
preferential socio-economic treatment to those who obtain qualifications. The
qualification system is being operated and administered according to the National
Technical Qualification Law enacted in 1973. Before the enactment of the law,
technical qualification tests have been administered by ten different ministries.29
Figure 5 depicts the system of technical qualification test. Currently, the
national technical qualification test is offered for 717 titles in 22 technical fields
within the engineering group, 19 technical fields within the craft group, and 6
technical fields within the service group as shown in Table 35. As of the end of
1992, more than 12 million people hold technical titles and out of them, 3.2
million people are either technicians or craftsmen (Table 36).
29The technical qualification test originally started with the enactment of the Law on
Vocational Training in 1967. Under this law. the testing system could be administered either
by the office of Labor or by other organizations designated by the administrator of the Office of
Labor. Accordingly, the qualification tests were given by 10 different ministries including the
Ministry of Science and Technology for 26 technical titles based on 19 different laws. Ministry of
Labor, The Development Process and Changes o f Titles o f the National Technical Qualification
Test (1993). 50.
115
FIGURE 5
SYSTEM OF TECHNICAL QUALIFICATION TEST
o 4 year college + (9)

o Junior colege +(11)
o 20 years of work
experience
Professional
engineer
Master
craftsman
o Industrial master
college
o 16 years o f work
experience
(7)
(9)
o 4 year college
o junior college + (2)
o 10 years of work
experience
o Junior college
o High school + (4)
o 7 years o f work
experience
o 2 years o f vocational
training
( 11)
Class I
engineer
Class II
Engineer
Class I
craftsman
~/T'T
(3)
(3)
o Junior college
o High school + (4)
o 7 years o f work
experience
o 2 years of vocational
training
Class II
craftsman
No limitation
Assistant
craftsman
No limitation
Source: Ministiy of Labor, The Development Process and Changes o f Titles o f the National
Technical Qualification Test (1993), 82.
Note: The figures in parentheses represent years of woik experience
116
TABLE 35
TECHNICAL QUALIFICATION TITLES
Classification
Engineering group
Technical field
22 Technical fields
Class
Professional Engineer
Class I engineer
Class II engineer
Titles of Qualification
269 titles
Craft group
19 Technical fields
Master craftsman
Class I craftsman
Class II craftsman
Assistant craftsman
413 titles
Service group
6 Technical fields
Master technician
Class I technician
Class II technician
Assistant technician
35 titles
Total
717 titles
Source: Ministry of Labor, The Development Process o f National Technical Qualification System
and the Changes in Test Subjects, 1993.
TABLE 36
TECHNICAL TITLE HOLDER IN ENGINEERING
AND CRAFT GROUPS
Classification
Engineering Group
Craft Group
Professional Engineer
Class I Engineer
Class II Engineer
Sub-total
Master Craftsman
Class I Craftsman
Class n Craftsman
Assistant Craftsman
Sub-total
Total
Number of Title Holder

Male
Female
7,588
21
253,699
17,293
29.427
353,335
46.741
614.622
732
0
97,590
2.112
2,251,033
333,059
246.100
8.693
2.595.455
343.864
3.210.077
390.605
Source: ibid., 83 (Calculated from Table 5-3).

^mit: person
117
Development of Advanced Scientific and Technological Manpower: As

Korean industrialization progressed and with the promotion of the heavy and
chemical industries in the latter part of the 1970s, Korea faced a severe lack of
advanced technological manpower. To overcome this bottleneck in the supply of
manpower, Korea recruited overseas scientists and engineers by offering them
competitive salaries and other fringe benefits. Furthermore, Korean scientists were
sent overseas training (Table 37).
TABLE 37
INDUCEMENT OF OVERSEAS KOREAN SCIENTISTS
AND POST-DOCTORAL TRAINING
1978-1990
Number of Amount in
million
persons
Won
1. Post-Doc. Training
1990
Number of Amount in
Persons
million
Won
1,232
12,253
209
2,334
- Overseas
1,144
11,852
178
2,200
-Domestic
88
401
31
134
- Permanent3
743
1,955
36
78
- Temporary3
437
538
74
123
38
74
10
16
* Scientists sent abroad
1,448
982
268
175
* Foreign scientists invited
1.328
671
187
79
2. Inducement of Scientists Overseas
- Renowned foreign scientists
Source: Korea Industrial Technology Promotion Association. White Paper on Industrial Techno
logy { \9 9 \\ 301.
aKorean scientists abroad
118
The inducement of overseas scientists and engineers and the training of

Korean scientists at renowned institutions in advanced countries has been managed
by the Korea Science Foundation. It is noteworthy that most of the scientists and
engineers induced from abroad are Koreans. During the period of 1968-1990, a
total of 1,843 expatriate scientists and engineers have been invited back to Korea
either permanently or temporarily (Table 38).
TABLE 38
INDUCEMENT OF OVERSEAS KOREAN SCIENTISTS
68-85
86
87
88
89
90
Total
Research Institute
282
58
84
36
39
13
512
University
266
64
59
41
34
20
484
33
55
581
124
152
85
73
36
1,051
316
21
24
28
19
21
429
42
12
22
17
108
119
31
52
255
477
32
61
47
93
82
792
1.058
156
213
132
166
118
1.843
Classification
Permanent
Industry
Sub-total
Temporary
Research institute
University
Industry
Sub-total
Total
Source: MOST, Science and Technology Annals. 1991.

unit: number of scientists.
119
Social Environment Conducive to Innovation
In the previous sections, we have discussed the roles of private firms and
government in improving technological capability in Korea. A country's
technological capability, however, can be most efficiently improved only when its
society as a whole can create an environment favorable to technological innovation
and diffusion. This section will, therefore, discuss the striking features of the
social environment in Korea that may have been conducive to innovation and
diffusion.
Social Movement for Creating A Climate Conducive to Innovation
Kwahakwha Undone (Science Movement!
A country's science and technology can grown deep roots only when its
soil and climate are favorable to their growth, and only with such roots can they
grow enough to contribute to technological development and the resultant
economic growth.
A climate favorable to the development of science and technology has been
a major policy goal for laying a solid foundation for science and technology from
the early stage of industrialization in Korea. As a result, the public's understanding
of science has increased and the importance of scientific and technological
development for the achievement of economic development plan goals, including
the promotion of the heavy and chemical industries, has been increasingly
recognized. The government, with the cooperation of the academic and industrial
communities and the mass media, launched a nation-wide Science Movement
(Kwahakwha Undong) in the late 60s designed to apply scientific principles to all
levels o f national life.
120
The Ministry of Science and Technology incorporated this nation-wide

movement into its annual program to create a favorable science/ technology
climate. It provided basic guidelines for scientific programs for all government
ministries and agencies and coordinated them within the framework of the science
movement. The main objective of the movement was to create an environment in
which the general public could apply scientific principles to daily living, and
develop a scientific approach to thinking and living with increased recognition and
understanding of science and technology. It also was aimed at promoting a
rational, efficient and creative national characteristic which could be easily adapted
so that scientists and technologists could contribute their knowledge and skill to
rural development and to the diffusion and popularization of science and
technology throughout the country.
The Saemaul /New Community') Movement
A fundamental change occurred in the early 1970s in the Korean
government's policy toward rural development. The core of this change was the
beginning of the Saemaul movement in the winter of 1971.30
30The Saemaul movement is a Korean model of a community development movement
with the ultimate goal of developing a strong nation through the elimination of poverty and the
construction of a dynamic society. The main features of the Saemaul movement can be
summarized as follows:
1). The initiative for the movement came from the president and government leadership.
All levels of government - central and local- were involved in one way or another, and ev ery
rural village was affected by the movement. Such massive scale of participation and government
support was probably unprecedented in the history of community development.
2). The Saemaul movement was designed and implemented around the individual
village as the basic unit of community life, characterized by the pursuit of common traditional
interests.
3). The movement does not differ much from other community developments efforts in
pursuing material betterment of rural society, but it does differ greatly from others in that it has
combined education and enlightenment with material goals.
4). The general procedure elsewhere in launching community development programs
has been to adopt an ideology and formulate a plan with objectives and strategies prior to actual
121
With government support and assistance, massive-scale investment projects

were undertaken for the improvement of physical infrastructure and farm income.
Efforts were also directed at influencing the agricultural communitys ways of
thinking and their lifestyle by means of a series of educational campaigns. The
agricultural community was mobilized to participate in community development.
As a result, the rural infrastructure and environment were greatly improved, and
farm-household incomes were substantially increased. Accordingly, during the
1970s the Saemaul movement helped to transform almost every aspect of rural
Korea.31
Social Zeal for Education
Due to exceptionally high public and private concern for education,
educational development in Korea has taken place earlier and more rapidly than
development in other sectors. The rapid economic development in the 1960s
through the 1980s would not have been possible without this high level of
development in the education sector.
At the time of liberation, however, the general level of education among
Korean people was very low and 86 percent of the population above 15 years of
implementation. But in the case of the Saemaul movement, action preceded the development of
an ideology and appropriate strategies.
5). A wide range of development activities characterize the Saemaul movement At the
central level, almost all of the government's rural development programs have been organized
under the Saemaul label. Lee-Jay Cho and Yun Hyung Kim (eds.), Economic Development in
the Republic o f Korea: A Policy Perspective, East-West Center (1991). 3-13.
31Coming into the 1980s, the movement had transformed itself into a pan-national
nature to include both rural and urban section of Korean society. Despite the positive
contribution of the movement in the formation of national consensus, it had been criticized for
its bureaucratization in the implementation process and nepotism in the late 80s. With the
embarkation of a civilian government, the movement has virtually receded into the background
in the 90s.
122
age had received no formal education. Moreover, industrial technical manpower

was almost nonexistent.32 But continuous educational effort since the liberation
has increased the proportion of the educated in the population.33 Therefore, it was
from the period after 1962 that Korea had a relatively abundant stock of educated
human resources34
The accumulation of educated manpower laid the foundation for rapid
economic growth after 1962. The export-oriented pattern of economic growth
during this period required more skilled labors, technicians, engineers, managers,
and entrepreneurs. As shown in Table 39, educational development, especially in
secondary and higher education during this period, further enhanced the position of
human wealth in Korea.
32After liberation, most industrial plants stopped production activities, mainly due to the
evacuation of Japanese entrepreneurs, managers, and technicians. It has been noted that the
Japanese owned about 94 percent of business establishments in 1940, and the proportion of
Korean engineers and technicians employed in manufacturing, construction, and utilities in 1944
was only about 2.0 percent of the total technical manpower. C. R. Frank, K. Kim and L. E.
Westphal, Foreign Trade Regimes and Economic Development: South Korea (New York:
National Bureau of Economic Research, Columbia University, 1975), 6.
33When, in 1948, the Republic of Korea government came into being, the National
Assembly was elected, and the Constitution promulgated, one of the first legislative acts of the
National Assembly was to enact the Education Law. The Education Law set forth the basic
direction and objectives of education in this country. A fundamentally Western-oriented
educational system was brought in and despite cultural incompatibility, the system took root,
helped as it was by the sudden upsurge in demand for higher education.
34Yung Bong Kim, "Education and Economic Growth," in Chong-Kee Park (ed.)
Human Resources and Social Development in Korea, ( Seoul: Korea Development Institute,
1980), 239-43.
123
POPULATION, AGED 14 AND OVER

BY EDUCATIONAL ATTAINMENT*
Years of School Completed
Year
Total
None
1-6
1944
14,189
12,303
1,608
1960
14,831
6,468
5,347
1970
18,943
4,444
1980
21,300
1985
25,280
7-9
10-12
13-14
15 & Over
Unknown
248
22
1,428
1,134
175
207
71
7,433
3,396
2,621
361
687
3,298
6,839
5,848
6,591
361
1,622
2,847
5,704
6,494
9,571
805
2,707
Sources: Economic Planning Board, Population and Housing Census o f Korea, 1960, 1970,
1975, 1980, and 1985.
unit: 1,000 persons
Rapid educational development in Korea may trace its root in the social
milieu in which, under the distinctive behavioral characteristics of its people,35
35The geopolitical environment, traditional cultural values, and various religions in
Korea have influenced the formation of distinctive behavioral characteristics of Koreans: 1) the
family plays the most important role in Korean society. Koreans learned to perceive the family as
the only means of protection when the country was too weak to protect them in times of foreign
invasion by powerful neighbors such as China and Japan. This experience was further reinforced
by the Confucian culture, which stressed filial piety and loyalty of family members to their elders.
To Koreans, enhancing family prestige is an important obligation. Individuals are motivated to
strive for career success in order to enhance their family prestige. It is an unforgivable sin for
anyone to disgrace his or her family name; 2), for the same reason that the family is important to
Koreans, other primary groups such as relatives, friends, and community play an important role.
In addition to the family, these informal groups which are based on blood relations, schooling,
and regionalism play an important role. The essence of these relationships is trust and loyalty and
the violation of these norms is perceived to be a cardinal sin; 3) Koreans tend to abide by the
established norms. They respect and observe these norms and they do not tolerate those who
violate them. Among these norms are respect for authority and the acceptance of a hierarchical
order in the society. They respect those who have a higher position in an organization, treat their
subordinates with personal care, and maintain trustworthy relationships with peers. These norms
124
education is perceived as a means to enhance family prestige while individuals are

given opportunities to achieve personal career success through education and
promotion.
Chapter Summary
In this chapter, we have analyzed the characteristic features of the Korean
national system of innovation supporting technological advancement in industry
from the perspectives of firms, government, and society as a whole.
The analysis is based on the assumptions that technological capability of a
nations industrial sector is the major factor of its economic growth and that the
national innovation system in terms of its adaptability to the changing techno
logical system of a global nature determines the rate and direction of techno
logical change in the nation.
The big business conglomerates, chaebol, have played the leading role in
developing and improving industrial technologies in Korea. The organizational
structure of chaebol has placed them in an advantageous position to recruit the
best human resources, to identify, negotiate, and finance foreign technology
are fostered by the Confucian culture, which stresses the importance of loyalty to the king,
obedience to superiors, and trust between friends. In this hierarchical society, one is either the
boss or someone's subordinate; 4). within these cultural boundaries, Koreans are allowed to
pursue individual interests to achieve personal success through education and promotion.
Education is perceived as a means to achieve personal career success, which in turn creates the
family prestige. Providing a good education for their children is the supreme obligation of
parents. Korean parents sacrifice cveiything they have to provide a good education for their
children; 5) the Korean society resembles an open society in which anyone can succeed in one's
career or venture if one is capable and hardworking. Living in a racially homogeneous society,
everyone has an equal opportunity to succeed in life; and 6) Koreans have developed an ethos
split between individualism and groupism. They are fiercely independent and competitive in
pursuing personal success through better education and promotion, but they are expected to be
dedicated members of many social groups and organizations at the same time. See Chan Sup
Chang, Human Resource Management in Korea, in Kae H. Chung and Hak Chong Lee (eds.),
Korean Managerial Dynamics {Pragen New York, 1989). 195-205.
125
transfer, to obtain business licenses and preferential financing from the govern
ment, to apply experience gained in one field of business to another, and to venture
into new business with existing businesses providing s cushion therefor.
Because of the lack of technological capability at the onset of industriali
zation, the major source of technology for Korean industries has been foreign
technology imports. The major channel of learning foreign technologies has been
through technology licensing, and the next important channel of learning has been
through dispatching in-house technicians for overseas training. Learning foreign
technologies through foreign direct investment has been relatively low in Korea.
The important institutional features of Korean firms for supporting
industrial innovations can be characterized as possessing: 1) efficient human
resource management practice on the part of chaebol corporations, in which
emphasis is on in-house training and development; 2) the establishment of R & D
and technical training facilities with the recognition of the importance of in-house
R & D capability.
The Korean government has also played an important role in laying the
ground-work and providing support for improving the national system of
innovation. By establishing the Ministry of Science and Technology in the 1960s,
the government has initiated the formulation of a long-term plan for science and
technology development. Various government ministries and organizations have
been involved in formulating and implementing science and technology policies.
The government has also positively participated in the development of industrial
technology through the inducement of technologies which evolved from restriction
to general liberalization of importing technology.
126
The Korean government has vigorously pursued a scientific and

technological manpower management policy by establishing various institutional
mechanisms to promote the
development of scientific and technological
manpower.
A social climate favorable to the development of science and technology
has been a major policy goal for laying a solid foundation for science and
technology from the early stage of industrialization in Korea. A pan-national
movement for the promotion of science was launched by the government in the
late 1960s. As an attempt to improve the physical infrastructure and income level
of rural areas, large-scale investment projects were undertaken by government
initiative in the early 1970s under the name of Saemaul Movement, which led to
the transformation of almost eveiy aspect of rural life in Korea.
The social zeal for education has become another important factor in the
rapid absorption and diffusion of industrial technologies in Korea. To be sure, the
rapid accumulation of educated manpower laid the foundation for rapid economic
growth.
127
CHAPTER V
INNOVATION SYSTEM OF A FIRM BUILDING UP TECHNOLOGICAL CAPABILITY
THROUGH LEARNING AND IMPROVEMENT: THE CASE OF
SAMSUNG ELECTRONICS COMPANY
Introduction
Technology is the principal means by which firms compete. Building up
competitiveness through technological mastery is a goal for firms as well as for
nations. Such mastery involves a series of steps:1 1) production engineering, or the
operation of existing plants; 2)
project execution, or the establishment of new
production capacity; 3) manufacturing of capital goods, embodying technological

knowledge in physical equipment and facilities; and 4) R&D, the specialized
activity to generate new technological knowledge. The technological capability of
a firm is, therefore, built up in a cumulative manner following the steps described
above.
The cumulative aspect of the process of technical change signifies that
interactive learning is at the center of the process of
technical change.2
Technological innovation is a learning process, or processes, which are interactive

and interdependent. There are several forms of learning new technology, and they
constitute a hierarchy that usually serves to indicate technological capacity itself as
well as, more indirectly, the degree of dependence on external sources of
1Edward J. Malecki, Technology and Economic Development: the Dynamics o f Local,
Regional and National Change (New York: John Wiley & Sons, 1991), 147.
2Charles Edquist and Bengt-Ake Lundvall. "Comparing Danish and Swedish System of
Innovation," In Richard R. Nelson, ed.,. National System o f Innovation: A Comparative Analysis
(Oxford: Oxford University Press, 1993). 267.
128
technology.3 The first form of learning is learning by doing advocated by

Kenneth Arrow.4 Arrow attempted to explain how productivity increases as a
result of production and attributed it to a learning by doing phenomenon.
Rosenberg5 further delves into the learning aspect of a production process and
suggests that a production process involves not only learning by doing - steady
improvements in productivity but also learning by using - incremental increases in
understanding the design and performance of a product and the machinery with
which it is produced.
The second form of learning is learning by operating or learning by
changing.6
It involves explicit effort and investment in the acquisition of
technological capacity. The learning by operating is a variant of learning by doing

or learning by using and it represents gaining experience in technical mastery
through enhancements to operating capacities. Learning by changing involves
gaining confidence in manipulating technology and making improvements on
equipment and techniques (learning by improving) subsequent to gaining experi
ence with them.
A third form of learning is learning by training.
This learning process
involves monitoring and recording the performance of technology. System

performance feedback can generate understanding about why certain things works
3Malecki, op. cit. 146.
4Kenneth Arrow. The economic implications of learning by doing.
Economic Studies 29 (1962), 155-73.
Review o f
5Nathaniel Rosenberg, Inside the black box: technology and economics (Cambridge.
MA: Cambridge University Press, 1982), 120-140.
6M. Bell, Learning and the accumulation of industrial technological capacity in
developing countries. In M Fransman and King, K. eds.. Technological capability in the Third
World (New York: St. Martin's Press, 1984). 187-209.
129
and others do not. People can be trained to operate machinery and to produce
items - the how of technology - without necessarily learning why.7
The fourth form of learning is learning by hiring. This form of learning
involves creating technological capacity through the recruitment of technical
personnel. These recruits may be newly trained professionals from local institutions
or highly qualified technicians from abroad.
The fifth form of learning is learning by searching. The learning process
involves rudimentary search procedures for identifying minor problems in products
and processes. Some of the problems are easily solved, but others remain unsolved
and are entered into the firms agenda. Thus, further research is required and it is
carried out with an explicit allocation of resources for non-production tasks,
usually R&D. This form of learning is costly, but it can serve to alter the capacity
for technological change within a firm directly.8
There are number of ways in which firms utilize technology as a basis of
competition. The path or trajectory a firm chooses will be based to a large degree
on its accumulated knowledge or its level of technical mastery. Firm's strategy can
be offensive, defensive or imitative.9
7Malecki, op cit, 147-8.
8Esben S. Anderson and Bengt-Ake Lundvall, "Small National Systems of Innovation
Facing Technological Revolutions: An Analytical Framework. In Christopher Freeman and
Bengt-Ake Lundvall, eds., Small Countries Facing the Technological Revolution (New York:
Pinter Publishers, 1988), 23-26; Malecki, op cit., 148.
9A firm with an offensive strategy maintains a world-class research capability to be able
to keep abreast of virtually any dev elopment that a competitor unveils. Offensive R&D is aimed
at being first to market with innovations. Especially in research-intensive sectors, such as
pharmaceuticals and semiconductors, being first to innovate is a common strategy. On the other
hand, firms with defensive strategy are able to react rapidly when a competitor firm unveils a
new product, introduces a lower-cost version of a relatively new product, or may be known to be
on the verge of new discoveries in some fields. Firms that tend towards defensive R&D, or
"technological followership. also must maintain a sizable research and engineering presence,
and may be pioneers in lowest-cost product design and manufacturer. A third approach to
130
The innovation system of a firm is closely connected with the level of

technical learning and the searching and selection of a technological strategy to
maintain the firms competitiveness.
In this chapter, Samsung Electronics Company, a representative Korean
firm, is chosen as a case study to investigate how its system of innovation has
been adapted over time to the changing technological environment and to examine
how it has improved its technical competency.
In the following section,
a brief explanation is given as to why Samsung
Electronics Company was chosen as the subject of case study. Section three is
concerned with the growth path of Samsung Electronics Company. The growth
path is divided into seven phases and each phase is seen from the perspectives of
technical learning and institutional adaptation. Section four evaluates Samsung
Electronics major institutional features supporting its innovation system. The fifth
and final section summarizes the chapter.
technological strategy is simply imitation of the technological moves o f more innovative firms.
An imitative strategy will usually entail a somewhat greater degree of engineering expertise,
oriented towards low-cost manufacturing processes, and relatively little actual scientific research
capability, at least in comparison with firms in either the offensive or defensive categories. See
Malecki, op. cit.. 186-9.
131
Why Was Sam Sung Electronics Company Chosen?

Samsung Electronics Co.(SEC) is Koreas largest integrated electronics
manufacturer having a diverse line of products, from semiconductors, information
systems, and computers to consumer electronics (see Table 40). In 1992 SEC
achieved $7.8 billion in sale with $4.6 billion in exports.10
In the semiconductor field, Samsung Electronics first made its mark in
1983 with the development of 64K DRAMs. In 1990 SEC was one of the world's
first companies to come out with a 16M DRAM, securing SEC's position among
the worlds leading memory chip makers in terms of both market share and techno
logical sophistication.
The company is exporting an electronic switching system, known as Time
Division Exchange or TDX, to several countries, including the Philippines, the
Commonwealth of Independent States, Hungary, Nicaragua, and Poland. SEC has
also developed switching systems for cellular telephone systems. The company
manufactures a wide range of telecommunications equipment such as digital, cellu
lar, and satellite transmission systems, as well as fiber-optic communication sys
tems.
In the computer field, SEC offers a full line of products, from super-micro
computers and 486 PCs to 32-bit notebooks and pen-based PCs. In computer
peripherals, the company has developed an optical-magnetic disk, in addition to
hard and floppy disk drives. In the monitor field, SEC has the worlds highest
market share of 11%.
I0These figures represent nearly 16% of the Group's sales and 46% of the groups
exports.
132
In the consumer electronics business, SEC has grown into a powerful

force, maintaining significant global market shares for products such as VCRs,
color TVs, and microwave ovens. SEC is also gaining global attention for its
development of technologically innovative products. These include one of the
worlds first home service robots and a high-speed color video printer.
TABLE 40
MAJOR PRODUCT LINE-UP OF SEC
Business Sector
Audio & Video Business
Consumer Electronics Business
Computer System Business
Telecommunication System
Business
Memory Devices Business

Micro Devices Business
Product Line
TV. LCD Projector, VCR, Camcorder, Component
Audio, CDP. MD, DCC, LDP, MOD, CD-I, CDROM
Refrigerator, Microwave Oven, Air Conditioner,
Washing Machine. Vacuum Cleaner
Mini Computer, Micro Computer, Desk-Top PC,
Lap-Top/Note PC, Pen Base PC, Palm-Top PC, Net
work System, Work Station, Optical Filing System,
Teleconference System, CTS. BAS
TDX, Modem, MUX, PAD, Facsimile, TypewTiter,
Copier, Key Phone, Pager, Car Phone, Hand-held
Phone, Optical Communication System, Optical Fi
ber
DRAM, SRAM, EEPROM, MASK ROM, Specialty
Memory, TPH. TFT. LCD. CIS
Discrete. MOSIC, Linear IC, ASIC, Logic IC, Micro
Component DSP
Source: Public Relations Office. Samsung Electronics. Creativity and Innovation (1993). 47
Already a technology leader in Korea, the company is winning recognition

throughout the world as a result of its technological innovation and new product
development. SEC invests more than 8% of annual sales in research and develop
ment. This commitment to developing the latest technology is also demonstrated
133
by the fact that around 9,000 personnel, or 20% of the work force, are engaged in
research and development. These researchers conduct research at six research
centers in Korea, and various R&D centers in the US. and Japan, as well as in
overseas design centers.
The company is also concentrating on securing the latest technology
through licensing agreements with world leaders and the establishment of joint
venture manufacturing facilities (Table 41).
SEC has concluded technology licensing agreements in the fields of
computers, semiconductors, HDTV, satellite communications, and fiber optic
communications with companies such as Hewlett-Packard, General Electric,
Toshiba, and General Instrument. SEC is building a joint venture semiconductor
plant in Portugal with Texas Instrument. Korea DNS is another important joint
venture that will produce sophisticated equipment used in making semiconductor
chips. The joint venture partner is DNS of Japan.
In terms of overseas operations, SEC manufactures color TVs, VCRs,
microwave ovens, and refrigerators in factories in eleven countries around the
world. The company is also building joint or wholly owned factories to manufac
ture switching systems and VCRs in the Commonwealth of Independent States.
SEC operates a computerized video manufacturing system, which links the com
panys overseas operations, the Head Office, production lines, and component
suppliers. This system allows the company to provide customers with the products
they want and where they want them.11
"Office of the Executive Staff of Samsung Group.

Samsung Group, 1993), 68-69.
The World o f Samsung (Seoul:
134
TABLE 41
SEC'S GLOBAL PARTNERS
Country
U .S. A.
Japan
Name of Partner
Line of Business
Samsung Coming Co. was established in 1973 as a

joint venture. It makes glass for TV picture tubes,
ceramics for integrated circuits, and parts for VCRs. It
is also building plants in China and Malaysia.
Samsung Medical Systems was established in 1984 in a
General Electric
joint venture. It sells and services GE high-tech medical
equipment in South Korea. It plans to produce less
costly versions of GE equipment there for sale in Korea
and to export.
There's an agreement in principle to cooperate with
General Instrument Samsung Electronics in developing high-definition
television (HDTV).
A joint venture called Samsung Hewlett-Packard mar
Hewlett-Packard
kets the American companys products in Korea, some
of which are made in Korea for H-P by Samsung Elec
tronics.
With Samsung, it is jointly developing a palm-top com
Motorola
puter on which users can write with an electronic pen
and send messages via radio.
The two companies are jointly building a semiconductor
plant in Porto. Portugal.
Texas Instruments
It has an agreement to obtain Samsungs technology for
developing new generation 16-megabit computer mem
Oki Electric
ory chips.
It is working with Samsung Electronics to develop ad
Toshiba
vanced memory devices under an eight-year agreement
for sharing technology.
Corning
Source: Louis Kraar, How Samsung Sacrifice Immediate Profits, the Korean Giant Pours $2.5
Billion a Year into Training, Research, and Factories That No Longer Make Just Copycat Prod
ucts, Fortune, 3 May 1993. 19.
135
It was only in 1970 when SEC started its own business for the production
and sales of radios and black and white TVs on consignment. In less than a quarter
of century, SEC has a grown into the largest single firm in Korea and one of the
leading makers of memory devices that developed the worlds first 64-megabit
Dynamic Random Access Memory (DRAM).
The rapid pace of building up
SECs technological competence demands a thorough investigation in terms of its

learning trajectory and its technological strategies, and the characteristic features
of SECs innovation system.
The Growth Path of SEC Through Learning and Institutional Adaptation12
The remarkable growth SEC has shown in the past twenty-five years can
be said to have been made possible by building up technological competence
through learning and efficient institutional adaptations. This section covers the
brief history of the growth path of SEC from its inception in 1969 to the present.
The period is divided into seven periods: Start-up period (1969-1971), foundation
growth period (1972-1974), expansion and high growth period (1975-1979),
structural
adjustment
and
technology
development
period
(1980-1985),
semiconductor business period (1983-1986), overseas-orientation period (19861987), and globalization period (1988 and onwards). Each period is seen from the
perspective of institutional changes in relation to technological changes.
12This section is based on the Twenty Years History o f Samsung Electronics Company
published by Samsung Electronics Company in Korean in October 1989. For convenience, it will
be referred as Twenty Years History o f SEC.
136
Start-Up Period (1969-1971)

Establishment of SEC. Samsung-Sanvo and Samsung-NEC
Samsung Electronics company was founded in January 1969 as an affiliate
of
the Samsung Group.13 The establishment of SEC was made with the
entrepreneurial initiative o f Byung Chull Lee,
the founder of the Samsung
Group.
After one and half years of complete retreatment from the forefront of
management,14 Byung Chull Lee reinstated himself as chairman of
Samsung
Corporation, Tong Yang Broadcasting System, and the Choong Ang Daily
Newspaper. He established a development department within Samsung Cor
poration and formed a task force team to do survey and research on possible new
projects including electronics and their feasibility. After six months of preliminary
survey and study on multiple candidates for new ventures, the task force team at
the development department recommended electronics as the most prospective
project field.
13Saxnsung Group began in 1938 as a small company with some 40 employees. The
company grew rapidly by engaging in trade with partners in Manchuria and Beijing and later by
venturing into small scale manufacturing. By 1948, its operation expanded to include Southeast
Asia and the United States. After the Korean War, the company expanded its manufacturing
capacity by constructing affiliates companies. In 1953, the Cheil Sugar Refinery' was built as the
first large-scale plant in Korea; in 1954, Samsung ventured into the wool processing business;
and , in the latter part of the decade, Samsung branched out into the banking business. In the
1960s, Samsung further expanded and diversified its business fields: it entered the life insurance
and department store businesses in 1963; a paper plant was built in 1965; and, in 1967, a
fertilizer plant with an annual production capacity of 330,000 tons was completed; it was the
largest plant of its kind at the time. Thus, by the latter part of 1960s, Samsung had evolved into a
conglomerate. The World o f Samsung (1993), 4.
14 In September 1966, Byung Chull Lee resigned as chairman of the Samsung Group
after he announced that the fertilizer company, when completed in 1967, would be donated to the
government. Samsung Group was involved in a smuggling incident in the process of importing
capital goods for fertilizer plant construction. Some believe that the smuggling incident was
manipulated for political purposes by the military regime of Park Chung Hee.
137
Being a late-starter in the electronics sector,15 the most important tasks for
initiating a new project were 1) to acquire market and 2) to obtain technology. The
final conclusion reached by the task force team was to start producing consumer
electronics such as TV and audio equipment and later gradually enter into
producing industrial electronics. In addition, the acquisition of necessary
technology was to be made through technological cooperation with foreign
companies. After various factors were taken into account, the task force team
recommended Japanese companies as technical partners.16
In November 1968, Samsung signed a memorandum of understanding with
Sanyo Electric of Japan17 to establish a joint-venture company to produce radio
and TV sets. Samsung also negotiated a joint-ventureship with NEC to produce
vacuum tubes, Braun tubes and communication equipment.
15The electronics industry in Korea got off the ground in 1958 when components were
imported for the domestic assembly of vacuum-tube radios. The first radio exports were achieved
in 1962. In the following years, domestic manufacturers mushroomed, hoping to tap the vast
potential of the growing home market. Since 1965, local development of electronics parts
became active and, particularly, the production of integrated circuit (IC) by foreign invested
companies made it possible for the domestic industry to diversify its products for the domestic
and overseas markets. With the start of TV assembly under technical assistance from a
Japanese company in 1966, Gold Star Company began to produce 19" BAV TVs with technical
assistance from Hitachi of Japan. Thereafter, the Korean electronics industry gained momentum
for growth. In 1967, 28 companies joined in the electronic business and another 22 companies
joined in 1968. Twenty Years History o f SEC, 98-106
16The task force team made several working level contacts with such renowned
electronic companies as Zenith and Warwick of the United States. Matsusita, Sony, NEC and
Mitsubishi of Japan, and Grundig and Telefunken of Germany. They concluded that, in terms of
access to market, technological cooperation with US companies would be advantageous, but the
disadvantage resulting from geographical distance and language barrier would be greater than
the advantages, ibid., 114-5.
17In the selection of a joint-venture partner, Sanyo Electric of Japan was chosen without
much difficulty due to the long-time relationship formulated between chairman Lee and Japanese
financial circles. The joint-venture with Sanyo was arranged by Dr. Inaba, a renowned economic
commentator and long-time friend of Mr. Lee. ibid., 115-6.
138
In January 1969, Samsung Electronics Company was officially founded as

the major holding company of the joint ventures with Sanyo and NEC as well as
the initiator of future electronics projects within the Samsung Group. The next
year after its inception, SEC's activities mainly focused on the following areas:
successful completion of joint-venture negotiations with Japanese counter-parts;
acquisition of government approval on joint-venture projects; establishment of
joint-venture companies and support for them; and, at the same time, purchase of
land to construct the Samsung Electronics Complex including plants, and the
acquisition and training of technical manpower.
In March 1969, SEC entered into a joint-venture agreement with Sanyo
Electric of Japan18 to produce radios, TVs and other electronics goods, and in
18 The conditions ofjoint-venture agreement were as follows:
1). Conditions for establishment of joint-venture company: (a) capital ratio between
Korea and Japan would be 50/50 (Samsung -50 %; Sanyo Electric-40 % and Sumitomo Trading
Co.- 10 %); (b) Initial authorized capital would be US$5 million, which would be increased to
US$12 million at the time of completion of plant construction and initiation of operation; (c)
Sanyo Electric of Japan would provide the new company with experience, technology,
information, data and know-how necessary for the production of products; (d) The new company
would produce TV sets. Radio sets, stereos and tape recorders in the finished product sector.
Germanium, silicon transistors, ICs in the semi-conductor sector, and speakers, electrolytic
condensers, tuners, etc.; and (e) As special conditions, both parties could not be engaged in
manufacturing and assembling of similar products in Korea, overseas sales would be made to
the buyers designated or approved in advance by Sanyo Electric, domestic sales would be made
to Samsung or the agents designated by Samsung, and the machinery, equipment and raw
materials to be used by the new company would be supplied by Sanyo at internationally
competitive prices.
2) For technical assistance from Sanyo: (a) The join-venture company would be the
exclusive user of patent rights, technical information and data; (b) Sanyo Electric would supply
to the new company the facilities, machinery and equipment, and raw materials at
internationally competitive prices; (c) Sanyo Electric of Japan would provide warranty for the
products of the new company; (d) On the exports products of the new company, either Sanyos
brand name or brand names designated by the buyers should be used; (e) On the products for
domestic sales, the brand name of 'Samsung-Sanyo should be used and the phrase 'Manufactured
in Korea under license from SANYO' should be attached; (f) The new company would pay to
Sanyo a royalty of 3 % of the amount corresponding to the ex-work prices of the products
agreed upon less import and other duties; and (g) The contact period would be 3 years and it
could be extended one more year. Ibid.. 122-3.
139
September it joined with NEC of Japan19 to produce vacuum tubes, Braun tubes
and display discharge tubes.
In June 1969, SEC submitted to the Korean government an application for
approval of a joint-venture company with Sanyo Electric of Japan. The jointventure project with Sanyo seemed to be easily approved since, on the 19th of the
same month, the government announced an Eight-year (1969-1976) Basic Plan for
the Promotion of the Electronics Industry.20 However, due the strong protest from
existing companies, the government approved the application in September 1969
with a special condition that all products produced by the joint-venture company
would be exported21
Technological Learning Through Training and Operating
In an effort to become an international integrated electronics maker in a
short period of time by acquiring process technology for producing products
19The agreements for joint-venture and technical assistance were signed on September
13, 1969. The conditions of the agreement were as follows: l)equity ratio would be 50:40:10 for
SEC, NEC and Sumitomo of Japan, respectively; 2) the total amount of investment would be
US$3.5 million; and 3) all products produced from the new company would be exported. Ibid.,
122.
20During the Second Five - Year Economic Development Plan period ( 1969-1971). the
Electronics Industry Promotion Law was promulgated in January, 1969 to stimulate not only
Korean exports with special tax privileges, but also investments from abroad. Thereafter, many
supporting measures to develop the electronics industry have been devised on many directions.
Especially the Government had designated 1976 as the year of the Korean electronics industry to
meet the US$ 1.7 billion (at 1975 constant prices) export target by 1981: A significant
development in the Korean electronics industry. Ibid., 104-6.
21Originally. Samsung agreed with Sanyo Electric of Japan that out of products to be
produced by the joint-venture company, 15% of TV and radio sets would be supplied
domestically, and 85 % of TV and radio sets, and 100 % of other products would be exported.
Due to this special condition, Samsung had to renegotiate the joint-venture agreement with
Sanyo. At firs t, Sanyo demanded cancellation of the contract but later accepted the condition
that all products produced by the join-venture company would be exported on the conditions that
1) the size of the plant to be built would be considerably reduced, and 2) the rights of
production and sales of the products would belong to Sanyo. Accordingly, the original condition
to increase the authorized capital up to US$12 million could not go into effect Ibid., 126-7.
140
ranging from materials to parts and components, consumer electronics and indus
trial electronics equipment and eventually producing them domestically, SEC set
up three basic principles for implementing the electronics project. They were: 1)
maximization of an electronics complex, 2) vertical integration of the production
process, and 3) early acquisition of technological capacity.
At the early stage of the project, more than anything else it was important
for SEC to acquire technological capacity. The easiest way of achieving this goal
would have been to scout technical manpower from existing companies (learning
by hiring). Instead, SEC adopted an intra-company development strategy of
training and fostering technical manpower. Accordingly, SEC publicly recruited
137 candidates for overseas training at the joint-venture partner companies. After
completing three months of Japanese language training and another two months of
preparatory training, the first team of 63 trainees (composed of 32 men and 31
women) were dispatched in September, 1970 to receive technical training at NEC
of Japan on manufacturing Braun tubes, vacuum tubes and display discharge tubes.
The second team of 24 trainees were dispatched in November, 1970 to Sanyo
Electric in Tokyo to receive training on radios, condensers, speakers, coils and
high-voltage transformers. The third team of 19 trainees were sent to Sanyo
Electric of Tokyo to receive training on semi-conductors and TVs.
The construction of the Samsung-NEC plant started in January, 1970 and
was completed in July, 1970. In the meantime, a trial production of vacuum tubes
was attempted in May, 1970 with the 63 trainees who had completed technical
training at NEC of Japan in February, 1970. The commercial production of
vacuum tubes began in July, 1970. For the production of display discharge tubes,
seven trainees were sent to Japan in June, 1970 for two months of technical
141
training and the commercial production began in September, 1970. Finally, for the
production of
Braun tubes, nine additional trainees were sent to Japan for
technical training and the commercial production began in December, 1970.

Samsung-NEC was renamed as Samsung Electron Devices Company in March,
1974.
With the experience and know-how accumulated from manufacturing
Braun tubes (learning by operation), the company could successfully develop a
quick-start Braun tube in January, 1975 becoming the third in the world and the
first in Korea to do so. The company expanded into the computer sector in 1978.
Currently, it ranks first in the world in the exports of Braun tubes for Black and
White TVs.
The construction of the Samsung-Sanyo plant started in May, 1969 and
was completed in March, 1970. Trial production began in May, 1970 and the full
operation was possible from November, 1971. To prepare for the commercial
operation of the plant, 463 shop floor workers ( 75 men and 388 women) were
hired in March, 1970 and they were trained by the 43 trainees who had returned in
early March after completing technical training at Sanyo Electric of Japan.
Organizational Changes to Secure Technological Capability
At the initial stage of the project, SECs plan of operation focused on
establishing joint-venture companies with Sanyo and NEC. Later SEC would take
exclusive charge of domestic sales of the joint-venture products with the purpose
of enhancing Samsungs image among consumers until it could acquire and
accumulate
technology and experience necessary for producing on its own.
However, domestic sales of joint-venture products were impeded by the protests
142
of existing companies and, therefore, SEC adopted a method of production and

sales on a consignment basis for products such as TVs, electric fans and
refrigerators. At the end of 1971, the restriction on the domestic sales of the jointventure products was partially lifted and SEC began to sell them domestically.
From the 2nd half of 1970, SEC launched a preliminary market survey for
producing various electrical and electronics products by itself including desk-top
electronics calculators.
As a strategy to acquire production technology and
eventually to produce the products on its own, SEC concluded technical licensing
agreements with Japanese companies in 1971 for the production of desk-top
electronics calculators, audio equipment, TVs and TV parts. As part of this plan,
25 trainees were sent to receive technical training in Japan (See Table 42).
TABLE 42
TECHNICAL IMPORTATION AND TRAINING (1971-1972)
Project
Technical Importation
Company
Date of Contract
Dispatch of Trainees
(Number/Period)
Desk-top calculator
CASIO
Mav 29. 1971
7/Sept. - Dec.. 1971
CRT Bulb/Mount
SONY-SHDBITA
June 6, 1971
4/Jan.- Feb.. 1972
Cone Paper
SIGMA CO.
July 20. 1971
3/June - Aug.. 1972
Tuner
SANWA ELECTRIC
Dec. 27. 1971
7/Mar. - Aug.. 1972
Audio Equipment
STANDARD RADIO
TV
MITSUBISHI
8/Aug. - Nov.. 1972

.
3/June - Aug.. 1972
Source: Twenty Years History o f Samsung Electronics Co., 140.
143
Foundation Growth Period ('1972-1974')

The period of 1972-1974 entailed the growth of a foundation by
reorganizing the overall operating system covering production and management,
by initiating the development of products on its own, by specializing the
production of parts and materials, and by penetrating into the field of semiconduc
tor manufacturing.
Vertical Integration of Production System
After having established joint-venture companies and completing construc
tion o f their plants during the first two years of its inception, in 1972 SEC
launched a new project aimed at building its own production facilities covering 13
consumer electronics including TVs, desk-top calculators, home stereos, electric
fans, refrigerators and electric heaters. In the implementation of the new project,
however,
SEC confronted many difficulties in terms of setting up investment
priorities, maintaining interdependency among different sectors, and acquiring an

appropriate level of
technical competency. Accordingly, SEC changed its
operational policy in 1972 toward becoming a set maker centered on consumer

electronics products such as TVs, audio equipment, refrigerators and air
conditioners while other new projects were transferred to its affiliate companies.
This policy change was put into practice in 1973: the cone paper manufacturing
project was transferred to Samsung-Sanyo Electric; the tuner manufacturing
project was transferred to Samsung-Sanyo Parts which was newly established in
March, 1973 as a joint-venture company22; the CRT mount assembly project went
It was founded based on the joint-venture agreement concluded on March 15. 1973
between Samsung Electronic Company and Sanyo Electric Co. and Sanyo Electric Trading Co. of
Japan. The construction of its plant started in May 1973 and was completed in October 1973. In
that month, it started producing major TV parts such as VHF-tuner, coil, high-voltage
transformer and electrolytic condenser by having moved manufacturing facilities from both SEC
144
to Samsung-NEC; the plastic and wooden cabinet manufacturing project went to

Se Dai Synthetics Co.; and the Braun tube manufacturing went to SamsungComing Co., a joint-venture company which was newly established in December,
197323
On the other hand, Samsung Electric Co. which was established as the
manufacturing arm of SEC in September, 1971 merged into SEC in March, 1973
to streamline inefficiencies resulting from a dualistic system of production and
sales.
Renegotiation of Joint-Venture Agreement and Conclusion of New Technical
Licensing Agreement
Both the joint-venture agreement and the technical licensing agreement
concluded with Sanyo Electric of Japan were originally signed on March 5, 1969
and May 20, 1969, respectively and they went into effect for three years from
August 18, 1972 to August 17, 1972. At the expiration of the original agreements,
both agreements were automatically extended temporarily for one more year under
the original agreements. However, when the joint-venture company began full
operation and, in particular, when SEC started producing products which directly
and Samsung-Sanyo Electric. In March 1974, its name was changed into Samsung-Sanyo Parts,
which was renamed as Samsung Electronic Parts Co. and Samsung Electron-Mechanics Co. in
1977 and 1987 respectively. It has grown into the largest electronic parts manufacturer in Korea,
and has developed magnetic heads for stereo tape recorders and FBTs for large-screen TVs. The
company is advancing into news media fields by developing cable broadcasting equipment, such
as CATV tuners, converters and satellite tuners, LNB, and SVR. Ibid., 151-3 and 160-2.
23It was established based on the joint-venture agreement between SEC and Coming
International Inc. The major elements of the agreement were: 1) equity ratio between the two
partners would be 50/50; and 2) for the first three years, the management right of the company
would be entrusted upon Coming International Inc. The construction of the plant started in
April, 1974 and was completed in April, 1975. Samsung Coming is now the world's third
largest maker of TV glass with an annual production capacity of 30 million color glass units.
Since 1984, the company's own R&D center has developed glass powder to glass rods used to set
metal parts in electronic gun, glass ceramics, and ultra-thin glass. It has also become involved in
developing high-tech materials such as MLP and Color filter. Ibid.. 162-6.
145
competed with those of Samsung-Sanyo company, the relationship between SEC

and Sanyo Electric of Japan fell into a nose-dive. Subsequently, Sanyo Electric did
not cooperate in providing technical information and data, and it charged higher
prices in supplying parts and raw materials to Samsung-Sanyo Electric. Under
these deteriorating circumstances, in December, 1972, SEC initiated a negotiation
with Sanyo Electric for the normalization of relations
and it succeeded in
exchanging a memorandum of understanding for the normalization of relations

with Sanyo Electric in February, 1973.24
Under this memorandum of
understanding, both parties concluded a separate agreement on technical

assistance, and Samsung-Sanyo Parts Co. was established as a joint-venture
between SEC and Sanyo Electric. Due to the normalization of their relationship,
the technical licensing agreement originally signed on May 20, 1969 could be
extended for another three years from August 18, 1972 to August 17, 1975. In
addition, SEC concluded a separate agreement with Sanyo Electric in August,
1973 on technical assistance for the production of cooling appliances such as
refrigerators and air conditioners.
24The major elements of the memorandum were as follows: 1) Sanyo Electric of Japan
would provide technical assistance to SEC for the production of TVs for domestic sales, b u t in
practice, a separate contract would be concluded between SEC and Samsung-Sanyo Electric Co
regarding the sharing of production, prices, technical assistance and payment of royalties; 2) in
SEC's production of radios and tape recorders, Sanyo Electric of Japan would provide technical
assistance through Samsung-Sanyo Electric; 3) for consumer electronics such as refrigerators,
further negotiation would follow after confirming the result of mutual trust in the production of
radios and tape recorders; and 4) SEC would fully cooperate with Sanyo Electric of Japan in the
operation of the electronic parts company to be established by Sanyo Electric of Japan or by
joint-venture with a third party when it would be built in the SEC's complex and even when it
would produce the same products produced by either SEC or Samsung-Sanyo Electric. Ibid., 1513.
146
Technological Innovation Through Learning hv Imitating
With the construction of its own production facilities and realignment of

organizational structure, SEC concentrated its efforts on the development of its
electronic products. These efforts were carried out through reverse engineering
(learning by imitating) and functional improvement of the products (learning by
changing).
Development of B/W TV. When SEC took over the TV plant that was
originally built and being operated by Samsung Corporation,25 it also inherited the
manpower and experience of the Electronics Department at Samsung Corporation
so that it could actively engage in the development of its own B/W TV models. In
December, 1972, a technology development department was established to
concentrate on learning how to make TVs by disassembling imported TVs. From
June through August 1972, three trainees were sent to Mitsubishi Electric of Japan
to receive technical training. After returning, they successfully developed a 19"
B/W console TV (Model SW-T506) in January 1973 with the help of TOSEC.26
In April, 1974, a 12" B/W TV (using a vacuum tube) was developed. Thereafter,
various models were developed.27
Development of a 'no frost type refrigerator and air conditioner. Until
April, 1974, SEC had been manufacturing and selling refrigerators on consignment
In August 1971, Samsung Corporation, the export-arm of the Samsung Group,
completed the construction of a plant for the production of black and white TVs. In November of
the same year, it succeeded in the development and trial production of 17" all-transistor BAY
TVa. During the 1971-73 period, it produced and exported 5.000 sets of TVs to the USA under
a OEM (Original Equipment Manufacturing) contract with Mitsubishi of Japan. Ibid., 154.
Tokyo & Samsung Engineering Co. (TOSEC). It was an SEC's subsidiary established
in Tokyo in 1971 in order to expedite the selection and purchase of equipment and parts for the
new projects, and it was closed in 1973. Ibid., 143.
27In 1974, SEC produced eight models of 12" TVs. two respective models of 14" and 17"
TVs, and four models of 19" TVs. Ibid.. 154.
147
with a company that had a technical licensing agreement with Sanyo electric of
Japan. However, due to the ever increasing domestic demand for refrigerators,
SEC decided to produce them on its own. After studying the feasibility of a
technical licensing agreement with Matsusita Electric, Sanyo Electric of Japan, and
General Electric of USA, SEC selected Sanyo Electric of Japan. In August, 1973,
a technical licensing agreement with Sanyo for cooling appliances was signed.28
Seven people were sent to Sanyo electric of Japan to receive technical training in
February, 1974.
The first refrigerator model was developed and produced in
March 1974, and an air conditioner was developed in May, 1974.

Development of A Manual Washing Machine: In October, 1974, SEC
developed a sample washing machine patterned after the pulsator type manual
washing machine developed by Sanyo in the early sixties, SEC started to produce
it in December, 1974.
Development of A Desk-Top Electronic Calculator: SEC concluded a
technical licensing agreement with CASIO of Japan for a desk-top electronic
calculator in May, 1971. The plant was completed in August, 1972 and the CASIO
model DX-44 was first produced in November, 1972. SEC started the
development of its own model for desk-top calculator in the fall of 1973 and
succeeded in producing it in April, 1974.
28The conditions of the agreement were: 1) SEC would import from Sanyo Electric
technology on manufacturing refrigerators, room air conditioners and show cases for them 4
years; 2) SEC would pay to Sanyo a royalty of 3% of the net sales. Ibid.. 155.
148
Venturing into the Semi-conductor Field through the Acquisition of Korea

Semiconductor Company
In December, 1974, SEC purchased 50% of the shares of Korea Semi
conductor Company (KSC) which was then in a financial trouble29 and actively
ventured into the semiconductor field. KSC succeeded in December, 1974 in the
trial production of standard C-MOS logic and, subsequently, in the trial produc
tion of chips for electronic calculators. In 1975, KSC launched an all-out effort to
develop C-MOS/LSI items for LED (light emitting diode) electronic wrist watches
and it succeeded in September 1975, thus making Korea the worlds fourth
producer of C-MOS/LSI products.
Expansion and High Growth Period (1975-1979)
For SEC, the period between 1975 and 1979 was a period of expansion
and high growth that was made possible through heavy investment in production
facilities for the localization of major parts and by continued investment in product
development.
Localization of Major Parts and Investment in Plants
For the localization of major parts, SEC invested more than 40 billion Won
in the construction of plants for compressors and motors.
MKorea Semiconductor Company was established as a joint venture between Korea

Engineering and Manufacturing (KEMCO) and Integrated Circuit International Inc. (ICII) of
the USA in January, 1974 by investing US$1 million on a 50/50 basis. The plant was completed
in October 1974. However, due to the aftermath of the first oil shock in 1973, the prices of raw
materials skyrocketed and normal operation was impossible. In addition, excessive investment in
the early stage and the delay in the production of large scale integration (LSI) products put
Korea Semiconductor in a severe financial crunch. SEC took over the 50 % share invested by
KEMCO and in December, 1977 acquired the 50% share held by ICII. ibid. 166-8.
149
Construction of A Compressor Plant: Since 1972, the domestic demand

for refrigerators has been increasing sharply and it has become one of the major
products of SEC. Accordingly, SEC set up the compressor team at the Planning
and Research Department to carry out a study on the possibility of localizing
compressor manufacturing. The team made a preliminary survey and feasibility
study for the project. It also contacted various internationally renowned companies
such as General Electric, Westing House, Tecumseh, and Kelvinator for technical
assistance. The team concluded that importing technology from Kelvinator of USA
would be most appropriate for SEC given the fact that Kelvinator was the first
company ever to develop a refrigerator and was also the original designer of the
concord type small compressor. In January, 1975, SEC signed a technical licensing
agreement with Kelvinator. Under the contract, SEC sent two technicians to
Americold Co., an affiliate of Kelvinator, to receive technical training for one
month. The construction of the compressor plant started in October, 1975 and
was completed in June, 1976. The plant started normal operation in February,
1977.
Construction of A Motor Factory: Electric motors used for electric fans,
washing machines, and refrigerators were supplied by an outside company at the
initial stage of SEC. In 1975, however, SEC decided to produce them on its own
by building a motor plant in order to meet the ever increasing demand for
diversified motors. The construction of the plant started in August, 1975 and was
completed in November of the same year. In January, 1978, the second plant was
completed.
150
Construction of A Metal Plate and Painting Plant.: The painting plant

which was originally built in September, 1973
could not fully cover the
processing needs with its existing capacity due to the ever increasing demand for
consumer electronics. Consequently, SEC built new a plant for metal plate and
painting in August, 1975, and the painting plant once was again expanded in
November, 1975.
Construction of Automated Plants for color TVs and Refrigerators: Ex
ternal factors such as the Korean governments announcement of its plan to allow
color TV broadcasting in the 80s, SECs increased shares of color TV export
quotas to the US, and the sharp increase in wages forced SEC to invest in the
automatization of a color TV plant. In October, 1978, SEC started building an
automated color TV plant which was completed in October, 1979. In February,
1979, SEC also constructed an automated plant for refrigerator s.
New Product Development and Product Diversification
The major technical achievement in this period was the development of
color TVs. This was made possible by the technical experience and capability SEC
had internally accumulated through the production of black and white TVs.30 For
the production of color TV, SEC sent a research team to USA to contact RCA for
negotiating the use of patent rights31 and, on June 17, 1974, SEC concluded an
30The development of the quick start Braun tube in December, 1974 and its mass
production in February by Samsung Electronic Tube was a turning point for SECs TV project.
SEC adopted the technical innovation achieved by its affiliate immediately and initiated the
development of an energy saving TV. SEC succeeded in the development of it in April 1975 and
started trial production in June of the same year, ibid., 191.
31The research team concluded that adopting the NTSC method patented by RCA would
be advantageous because it had been adopted by over 30 countries including the USA, Japan and
several East Asian countries, ibid.. 193
151
official agreement with RCA for the use of patent rights.32 After the agreement
with RCA was approved by the government, SEC launched an effort in August,
1975 to develop a color TV by forming a development team composed of five
technicians. After one year of trial and error, the team succeeded in the trial
production of two 14" color TV models in June, 1976. In early 1977, SECs TVs
acquired such safety standard marks as UL, FCC and DHEW of USA,
CSA
(Canadian Standard Association) of Canada, and FTZ (Femmelde Technishes

Zentralant) of West Germany.
Another important technical achievement in this period was the develop
ment of both hot-line type refrigerators in February, 1976 and show cases for
foods and beverages in February, 1975. The refrigerator acquired the KS (Korean
Standard) mark in February, 1976, UL mark of the USA in July, 1977, the JIS
(Japan Industrial Standard) mark in March, 1979, the SAA (Standard Association
of Australia) mark in August, 1979 and the CSA mark of Canada in October,
1979.
Other important technical achievements for new product development in
cluded LED display chip for wristwatches in September, 1975, a cash register in
June, 1976, a digital clock radio in November, 1977, a micro cassette in October,
1978, a micro wave oven in November, 1978, a card-type super-mini electronic
calculator in April, 1979, a automatic vending machine in May, 1979, and VTRs in
May, 1979.
32The conditions of the agreement were: 1) the contract period would be 5 years; 2) the
payment of royalty would be 1.8 % of the net sales, ibid.. 194
152
Organizational Changes
Refurbishing the Management System and Introduction of Office Auto

mation: Sine 1974, SEC production has sharply increased in volume as its product
line has diversified. The increase in the amount of sales has also been massive. This
steep increase in production and sales forced SEC to disintegrate and refurbish the
multi-layered planning and controlling functions of the company. Accordingly,
SEC introduced in September, 1975 the business sector system in which the
diversified and multi-layered functions of the company were divided and
decentralized by establishing autonomous profit centers. Each profit center was
given decision making power in planning and controlling its business activities.33
During the period of 1976-1979, there were 14 organizational changes.34 In
October, 1976, by way of
ensuring management by objective, the budget
controlling accounting system was introduced. In addition, mini-computer Eclipse

C/300 Models were imported
for office automation from Data General Inc. of
USA in April, 1976 and the Management Information System was established
within the company in 1979.
Merger of Samsung-Sanyo into SEC to Become the Largest TV Maker: In
April, 1977, Samsung Electric Co. (formerly known as Samsung-Sanyo Electric
Co.) was merged into SEC to integrate the dual system of TV production into a
33Before the organizational change, there were 8 departments, 2 offices. 24 sections. 6
regional branch offices, and 3 overseas branches. They were reorganized into 5 business centers
(management electronics, consumer electronics, parts, and sales), 7 departments, 3 offices, 24
sections, 7 regional branch offices, and 3 overseas branches, ibid., 213-215.
34These frequent changes were made to operate the business sector system in an
efficient way. By the end of 1979, the organizational structure of SEC was composed of 9
business centers, 1 research institute, 3 special management offices , 9 business sectors, 57
departments, 21 offices, 189 sections, 10 overseas branches, and 1 regional branch office, ibid..
261.
153
single production system under the control of SEC. In 1978, SEC became the
largest domestic TV manufacturer holding 40% of the domestic market and in the
same year it also became the largest TV maker in the world with an annual
production capacity of 2 million units of B/W TVs, surpassing Matsusita Electric
of Japan.
Strengthening the Overseas Business Sector and Expanding Overseas
Branch Network: SECs first entry into the overseas market started in 1971 when
it exported black and white TVs to Panama and, since then, it has recorded
remarkable growth in exports. To support its exports activities, SEC increased the
number of its overseas branches and by the end of 1979, the number of overseas
branches stood at ten.35
In the organizational change of February, 1979, the
Overseas Business Center was established for the effective management and
control of the export department and overseas branches.
Establishment of An Integrated Research Institute: To integrate the
research and development activities which had been separately carried out by each
business sector, in December, 1979, SEC established an integrated research
institute.
Company-Wide Diffusion of Quality Control Campaign
In 1972, SEC launched a quality campaign in order to upgrade product
quality and cut down production costs. This campaign was implemented in a
separate manner by each business sector. With the absorption of Samsung Electric
in 1977, SEC decided to spread the campaign company-wide under the name of
total quality control (TQC). 1977 was designated as the year of establishing
35In 1976, SEC had overseas branches in New York, Tokyo and Frankfurt. In 1977, 4
more overseas branches were established in Chicago, Toronto, Panama and Singapore. A Los
Angeles branch and a Kuwait branch were established in 1978. A branch in Taiwan was also
established in 1979. ibid.. 245.
154
organization for TQC movement and various QC circles and ZD (Zero Defect)
groups were integrated into the Saemaul circle. At the same time, education for
QC techniques was given to all employees including staff members. In 1978, the
quality control section in each business center was elevated to the status of
department, and various events and presentation meetings were held to familiarize
employees of the company with the concepts of statistical quality control and
PDCA (Plan, Do, Check, Action). SEC also consulted and provided education on
quality control to supporting companies.
Structural Adjustment and Technology Development Period (1980-1985)
The second oil-shock of 1979 dealt a severe blow to the domestic
electronics industry and SEC was not an exception. By 1980, was in the red.
However, due to the efforts o f expediting technological development, improving
productivity, and reducing production costs, SEC's operation returned to normal
and recorded a surplus once again in 1981. Since then, SEC has recorded high
growth.
During this period, SECs management policy was centered on
improvement of productivity, technological development, improvement of

product quality, and reduction of production cost and, with the beginning of
research and development activity at the integrated research institute, these
management objectives were rooted deeply into all the production processes and
management activities of the company. SEC
also succeeded in product
diversification through active importation and the development of cutting-edge

technologies. During this period, the share of exports out of gross sales surpassed
50 % for the first time, setting a tone for pursuing an export and overseas-oriented
growth strategy.
155
Another remarkable development in this period was SEC's full-scale entry

into
the
telecommunication
business through
its
take-over
of Korea
Telecommunication Company and merger with Samsung GTE into Korea

Telecommunication.36
Merging Absorption of Samsung Semiconductor Company and Take-over of
Korea Telecommunication Company.
Merging Absorption of Samsung Semiconductor Company (SSCk SEC
was concentrating on the vertical integration of its parts supply system. However,
in the case of semiconductor chips, only a small quantity was supplied by its
affiliate, Samsung Semiconductor Company, and most of them were imported.
Moreover, major semiconductor manufacturing countries such as the USA and
Japan were becoming reluctant to supply semiconductor chips for fear of reverse
engineering.
To cope with these unfavorable circumstances, SEC decided to absorb
Samsung Semiconductor company and, by combining SSCs accumulated
experience in semiconductor production with SEC's high quality R&D personnel,
to develop semiconductor chips for electronics products.
The first semiconductor for electronics goods selected to be developed was
s chroma integrated circuit (IC), the core part for color TVs.
Starting from
February, 1980, SEC began an R&D project and succeeded in the development of
a chroma IC in November, 1981.37 With the development of a chroma IC, SECs
^Before this, SEC absorbed Samsung Semiconductor Company to be operated as a
semi-conductor business sector in January, 1980. It was transferred to Korea Telecommunication
Company in October, 1982 to be renamed as Samsung Semiconductor and Communication
Company in December of the same year, ibid., 273.
37For the development of chroma IC. a total of 1.5 billion Wons (US$30 million) was
invested and 95 researchers (84 from SEC and 11 from overseas) were employed, ibid.. 274.
156
technical level in producing semiconductor could be upgraded to that of large scale

integration (LSI).38
At the same time, a Semiconductor R&D Institute was established in
January, 1982 for expediting the development of new semiconductors including
very large scale integration (VLSI) technology. To improve the production
technology of semiconductors, SEC also concluded technical licensing agreements
with ITT o f USA and Sharp of Japan.
Take-over of Korea Telecommunications Company (KTC): SEC took
over KTC in March, 1980 from the Korea Development Bank (KDB).39 After the
take-over o f KTC, Samsung GTE ended the joint-venture relationship with GTE in
June, 1980 and Samsung GTE was merged into KTC in September, I980.40
With
the
merger
of
Samsung-GTE
and
KTC,
the
Samsung
Telecommunication Technology Institute41 was established in January, 1982 to

build a foundation on which to become an integrated communication equipment
maker in a short period of time.
38Large Scale Integration. A semiconductor technology that can integrate up to 100,000
transistors or resistors in one chip.
39In May, 1979, the Government announced a major policy change in the
telecommunication industry: 1) privatize KTC, a public corporation financed entirely by KDB;
2) maintain two types of electronic switching system (ESS) by importing from other sources to
prevent system suppliers from monopolistic price-setting tricks. Twenty Years History o f SEC.
276-7.
Under the joint-venture agreement between SEC and GTE for the establishment of
Samsung-GTE, SEC was to get the consent of GTE for the take-over of KTC, and, under the
technical assistance agreement between KTC and BTM. technology transfer from BTM to KTC
was prohibited as long as GTE's share of Samsung-GTE was 49%. Accordingly, Samsung-GTE
ended its joint-venture relationship with GTE and later it was merged into KTC. ibid. 277.
This Institute originated from the Samsung-GTE Communication Research Institute
founded in February. 1979. In January, 1980, it was merged into SEC's Integrated Research
Institute and, two months before the merger with KTC. it was restored as research department
within Samsung-GTE. ibid., 278.
157
Establishment of An Integrated R&D System
Since its inception, SEC has been placing much importance on

technological development by establishing technology development teams within
each business headquarter or business sector. As a result, SEC succeeded not only
in developing its own models of electronics products and improving product
quality, but also in developing VTRs, micro wave ovens, bipolar linear IS and LSI
with its own technology.
At the same time, SEC decided to establish an Integrated Research
Institute to purse research and development in a more synthetic and efficient way
to upgrade its technological capability and become on of the worlds leading
electronics manufacturers.
The construction of the institute was completed in December, 1979 and it
was officially opened in April, 1980. With the opening of the institute, all R&D
functions that had been dispersed in each business sector were integrated into the
institute.42
One noticeable result from the opening of the integrated research institute
was the sharp increase in the number of industrial property right applications and
registrations since 1980 as shown in Table 43.
42Initially. the institute was composed of one department (Technology Management)

and four research project teams (TV. Audio, Consumer electronics, and Parts), and in July, 1982.
it was reorganized and expanded into 3 business centers, 5 departments. 8 research project
teams, 1 office and 2 sections. The research personnel was also increased from 58 employees at
the beginning to 1.791 in 1982. ibid.. 282-3.
158
TABLE 43
TRENDS OF INDUSTRIAL PROPERTY APPLICATION AND REGISTRATION*

Classsification
Patent
1973
-77
0
1978
1979
1980
1981
1982
1983
14
(1)
14
(1)
13
(3)
18
(3)
8
(1)
19
(4)
27
(5)
15
(3)
42
(3)
57
(6)
8
(1)
49
(6)
57
(7)
26
(8)
342
(26)
368
(34)
35
(3)
588
(30)
623
(33)
Utility
Design
Total
1984
107
(7)
1,304
(48)
1.411
(55)
1985
269
(14)
2.001
(179)
2.270
(193)
Source: The Twenty Years History o f SEC. 285. 381.

Note: The figures in the parentheses are the number of registration.
aunit: number of cases.
Imports of New Technologies and Development of High-tech Products

New Technology Imports: During the 1980-1985 period, SEC was very
active in importing new technology. Table 44 shows the major technical licensing
and assistance agreements that SEC concluded during that period.
TABLE 44
TECHNICAL LICENSING AND ASSISTANCE AGREEMENT
(1980-1985)
Date of
Agreement
Jan ., 1980
July 2. 1980
July 8, 1982
Supplier of
technology
Sanyo Auto
matic Vending
Machines Co.
of Japan
Philips Co.
of
Netherlands
Philips Co.
of
Netherlands
Contents of
Technology
Manufacture of bottle and
cigarette vending machines
Conditions of
Agreement
Contract period: 5 years:
Royalty: 3 % of net sales
Manufacture and sales of

optical system video disc
player
Use of Patent right for pro
ducing Digital Compact Disc
Svstem
Contract period: 10 years.
Contract period: 10 years
159
TABLE 44 CONTINUED
Nov. 12. 1980
Sept., 1982
Mar. 30, 1983
Aug. 15,1983
Oct. 14, 1983
June 16, 1984
June 16, 1984
Sept. 28,
1984
Oct. 8,1984
Dec. 19,1984
Compagnie
Francaise De
Television
(CFT)
JVC of Japan
Use of patent right for manu

facturing SECAM (Sequential
Coleur A Memmoire) type
color TV receiver
Use of patent right and brand
name for manufacturing VTR
Contract period: 5 years:

Royalty: 0.75% of the in
voice price.
Contract period: 5 years;

Export products with VHS
mark attached
Toshiba Co. of Technical
information, Contract period: 5 years;
Japan
technical assistance, use of Royalty': downpayment of
patent right for manufactur US$ 110,000 plus 3% of
ing air conditioners
the sales price(5% if
annual sales exceed 3,000
sets)
SONY Co of Non-exclusive use of patent Contract period: 5 years:
Japan
right for magnetic tape re 10 million Yen for techni
corder
cal data plus 2% of gross
sales
Sanyo Auto Technical assistance in manu Contract period: 10 years;
matic Vending facturing 14 different types of Royalty: US$275,000 in
Machines Co. vending machines
cluding blue print fee of
of Japan
US$5,000
for
each
machine and 3% of ship
ment prices
Toshiba Co. of Use of patent right, technical Contract period: 3 years.
Japan
information, and technical
assistance for Japanese Word
Processor
Toshiba Co. of Use of patent right and supply Contract period: 5 years;
Japan
of technical information for Royalty: downpayment of
20 million Yen and 50
washing machines
Yen per machine
Ikegami Com Technical and management
Dispatch of technician to
munication of assistance for imports,
SEC; Technical training
Japan
assembly and domestic sales
of SEC's technicians at
of video equipment
Ike-gami. Use of 'SAM
SUNG IKEGAMI brand
name for products
Technical assistance for pack Contract period: 2 years
Raymond
Eisenhardt & ing materials such as box, and 3 months; Consult
Son Inc. of cushion and PE-bag.
ancy fee: 174 million Won
USA
Sanyo Electric Use of patent right for micro Contract period: 5 years:
of Japan
wave oven
Royalty: downpayment of
US$100,000 and US$ 100
per set
160
TABLE 44 CONTINUED
May 8, 1985
Matsusita Co.
of Japan
Award of licensing, supply of

technical data regarding spe
cification, blue print, process
control, and dispatch of tech
nicians to SEC, and training
of SEC's technicians for
manufacturing Magnetrons
Contract period: 5 years;

Royalty: downpayment of
60 million Yen plus 6 mil
lion Yen per model ex
ceeding the first models
adopted, and 70 Yens per
unit
Source: ibid., 286-7 and 371-76.
Development of High-tech Products: During 1980-1985, SEC developed

various high-tech products. Among them, some were commercialized, but some of
them were developed only to demonstrate SECs technical capability to customers.
Table 45 shows the major new products developed during this period.
TABLE 45
MAJOR PRODUCTS DEVELOPED DURING 1980-1985
Area
Video
Equipment
Period of
Development
Feb. 1980Nov. 1981
Aug. 1981Aug. 1982

Jan. 1982Sept. 1982
Sept. 1978Oct. 1981
O ct 1983
Aug. 1982O ct 1983
Products
Remarks
Chromance
& This IC was developed by the research
Luminance Sig team in the Semiconductor Business Sector
nal Processor 1C with close cooperation of the Integrated
for color TV
Research Institute. The research team was
composed of 84 technicians from SEC and
11 technicians from overseas.
105 Channels
Used Pulse Code Modulation PCM) sys
Cable TV
tem. Developed to export to Philips Co. of
Netherlands
Panorama Screen Developed for both Korea Electronics
Show and Seoul International Trade Fair
(SITRA) held in 1982
Video Disc
Developed with the technical assistance
Player
from RCA of USA
8m m VTR
Developed first in Korea and second in the
world after SONY of Japan
Front Loading
Improved Top Loading VTR Deck
VTR Deck
161
TABLE 45 CONTINUED
Consumer
Electronics
Audio
Equipment
News
Media
Equipment
Computer
& Its Peri
pherals
Basic
Materials
May 1984Sept. 1984

Aug. 1984Nov. 1985
Camera-cum
VTR
Digital TV
Mar. 1983SepL 1983

July 1983July 1984
Mar. 1982Apr. 1983
Aug. 1983Oct. 1984
Jan. 1984Nov. 1984
Jan. 1981Sept. 1982
Micro Wave
Oven With TV
Dryer
Electric Clothing Dryer
Induction Cooker
Developed first in Korea
Voice Recogniz
ing Telephone
Answering
Phone
Compact
Disc
Plaver
Recognize user's voice and dial
Mar. 1984Oct. 1985
Teletext
Dec. 1983Mar. 1985

Jan. 1981Feb. 1983
Satellite Broad
casting Receiver
Personal Com
puter SPC-1000
Jan. 1982Dec. 1982
Micro Computer
Jan. 1981June 1982

Jan. 1982Dec. 1983
June 1982Dec. 1982
Monitor
June 1979Aug. 1983
Used VHS-C tape instead of standard tape
Line Printer &

Low-Cost Printer
CRT Terminal
for Korean,
Chinese and
English
Developed central control unit software

and Switching mode power supply using
digital TV IC of ITT, USA
Attached 5" color TV to micro wave oven
N.A.
Developed through reverse engineering of
a Philip's model
Developed through reverse engineering of
a Japanese Videotext. Also developed
decoder of North America Broadcasting
Teletext Svstem
Developed with technical cooperation of
Yonsei University
Developed by the research team of the
Integrated Research Institute
Imported Micro Computer from Altos in
the form of Semi Knock Down and
assembled for trial purpose
Developed and produced for export on
OEM basis to IBM and Atac
Developed to enter the domestic printer
market
Developed for Korean and Chinese Word
Processing
This core part for Micro Wave Oven was

initially developed in April, 1980 with
technical assistance from American
Microwave Inc., but, due to the lack of
line-up equipment and know-how, full
production was delayed. In August, full
production began with technical assistance
from Amperex Inc.
Magnetron
Source: ibid.. 287-291 and 376-381.

162
Establishment of An Overseas Business Foundation
Establishment of Overseas Production Subsidiaries: Since 1973, SEC

export of B/W TVs had been growing rapidly and it was mostly concentrated in
the North American market. With the start of color TV exports in 1977, SEC's
dependency ratio on the North American market reached up to 85 %.
At the same time, most of the advanced countries including the United
States began to tighten import restrictions against export products from the newly
industrializing countries. In particular, color TVs manufactured in Korea faced
import restrictions in the form of voluntary export restraints.
Under these circumstances, SEC decided to establish overseas production
subsidiaries both in Europe and North America in an effort to avoid import
restrictions and non-trade barriers, and to gain access to advanced technologies.
In March, 1982, SEC established Samsung Electronica Portuguesa Sari., a
joint-venture company with Emacet of Portugal and MRI o f the United Kingdom.43
Samsung International Inc. (SII) was established in August 1983 as a
production subsidiary in the New Jersey, U.S.A. The construction of SII's plant
began in January, 1984 and was completed in December, 1984.44
43The total amount of investment was US$ 4.7 millions and the capital ratios among the
partners were: 55 % for SEC, 35 % for Emacet, and 10 % for MRI. In addition to capital
investment SEC supplied production technology in return for royalty payments of 3% of the
gross sales. SEC also took full responsibility for supplying parts and 50 % of them were supplied
from Korea. Emacet provided lease rights for plant and manpower and, in return, it gainded
distribution rights in Portugal, Spain and the African colonies of Great Britain MRI was given
distribution rights in Great Britain. Production in the plant began on September 23, 1982. ibid..
345-347.
44The estimated investment amounted to US$ 25 million. The paid-in capital of USS 2
million was fully invested by SEC, and the plant had annual production capacity of 360.000 sets
of color TVs. ibid.. 431.
163
Establishment of Overseas Sales Subsidiaries and Expansion of Branches:

In June, 1982, Samsung Electronics GmbH was established in Frankfurt, West
Germany as a sales subsidiary with the purpose of expanding sales network in
Europe and securing market shares for SEC's own brand products.45
In November, 1984, SEC established Samsung Electronics United
Kingdom, Ltd. (SEUK)46 for the purpose of securing a market base in North
European region for the sales of color TVs produced at SEC's Portugal
manufacturing subsidiary.
During the 1980-1985 period, more overseas branches were established
and, by the end of 1985, the number of SEC overseas branches stood at twenty.
The Growth Period o f Semiconductor Business (1983-1986)

In early 1980, Samsung Semiconductor Co. was absorbed into SEC as one
of
SECs Business Sectors of SEC to ensure complementary development
between the electronics and semiconductor businesses. However, due to the

difficulty of
importing needed technology and the low level of technical
development, SECs business activity in the semiconductor fields was limited to

the production of chips for electronics wristwatches, transistors, and low-density
ICs.
SEC's full participation in the semiconductor business was initiated by the
entrepreneurial mind of Byung Chull Lee, the founder and chairman of the
45The paid-in capital was DM 2 millions. At the time of opening, there were 7
employees, 4 from SEC and 3 employed locally, ibid., 339.
^SEUK was founded by elevating SEC's London Branch to the status of subsidiary.
ibid.. 418.
164
Samsung Group, to establish semiconductor production as the Samsung Groups

major line of business.47
The Semiconductor Business Sector within SEC was absorbed into KTC in
October, 1982 and the name of KTC was changed into Samsung Semiconductor
& Telecommunications Co., Ltd. (SST) in December, 1982.
Implementation of A New Semiconductor Project
Feasibility Study: A task force was formed in September, 1982 within the
Semiconductor Business Sector of SEC to carry out market research and feasibility
studies on the semiconductor project. The task force completed its final report in
the middle of October of the same year. Based on the recommendation made by
the task force in its report on the feasibility of a semiconductor project, Mr. Lee
ordered to pursue a new semiconductor project in the field of memory devices in
conjunction with the existing semiconductor project48
Selection of
Memory Device Types:
Even though the basic policy of
SST's new semiconductor project was centered around memory devices,
the
selection of memory devices was yet to be decided because there were numerous
types of memory devices such as DRAM, SRAM, MASK ROM, EP ROM and
EEP ROM.
"Realizing that the semiconductor business was slow' in growth compared with other
related business sectors, Mr. Lee made a visit in March, 1982 to the semiconductor and
computer plants of Hewlett Packard Company of the United States, and also contacted people at
IBM and GE to find out that electronics industrys future depended on the development of the
semiconductor sector. In February, 1983, Mr. Lee made public his plan to invest in a
semiconductor project ibid., 546-547.
48The world market size of memory devices in 1982 was estimated to be approximately
US$ 3.2 billion constituting about 21 % of the total world semiconductor market (US$ 14.5
billion) and its share was expected to increase up to over 30 % by 1988. Moreover, the technical
aspect of memory devices would make it possible for late-comers like SST to compete
internationally once it acquired process technology for manufacturing memory devices, ibid..
549.
165
DRAM and EEP ROM were initially selected after compiling technical data
and consulting with specialists. However, in the process of
project
implementation, a decision was made to develop and produce DRMs.49

Establishment o f An Overseas Subsidiary
After tapping into a broad range of opinions from
specialists, both
domestic and abroad, SST decided to set up a subsidiary at Silicon Valley and, at
the same time, to build a
large scale plant for semiconductor products in Korea
would be the most efficient way of implementing the new project given the major
obstacles to be overcome.30
In early 1983, SST successfully induced four Korean scientists who were at
the time working at the renowned semiconductor companies in the USA to
participate in SSTs semiconductor project. With the help of these four scientists,
SST established Samsung Semiconductor & Telecommunications International
Inc. in July, 1983.31 The name of the company was changed into Tristar
Semiconductor Inc. in August of the same year and it was renamed Samsung
Semiconductor Inc. (SSI) in 1985. The major functions of the subsidiary were: 1)
develop new VLSI products and technology, and on-site technical training of
49At the time of the decision, the market size of SRAM and EEP ROM was less than 50
% of the memory market. Therefore, securing enough market share to maintain production
capacity was a difficult task given the technical level of SST. Ibid.. 550-551.
^First. SST was only able to produce LSI for consumer electronics and the level of
SST's technical competency was not mature enough to develop and produce high-density VLSI.
Second, the United States and Japan, the major semiconductor producers, became more
protective about technology transfer. Third, due to the ever worsening competition between the
United States and Japan in the field of semiconductors, the export of semiconductors to US
market was getting more difficult. Forth, highly skilled technical manpower needed to develop
and produce semiconductors was lacking domestically, ibid.. 551.
31The total amount of investment was US$ 6 million, ibid.. 552
166
domestic technicians; 2) act as the export arm of SST; and 3) collect up-to-date
technical information.
Development of New Products and Technologies
TABLE 46
DEVELOPMENT OF NEW MEMORY DEVICES
Development
Period
May 1983
Nov. 1983
Name of
Product
64KDRAM
Remark
Mar. 1984Oct. 1984
256K DRAM
Sept. 1983July 1985
256K DRAM
July 1983July 1984
16KEEP
ROM
Mar. 1983Aug. 1984

Feb. 1985Mav 1986
Mar. 1985Sept. 1986
Sept. 1985July 1986
VTR IC
A 64K DRAM development team was formed with 20

technicians including two Korean scientists at SSI.
Technical licensing agreement was signed with Micron
Technology of USA in June, 1983 for the supply of chip
design technology. The development of 64K DRAM was
attempted by the assembling the 3,000 64K DRAM
supplied by Micron Technology. After more than 40 days
of trials and errors, 64K DRAM was successfully
developed as the third in the world after the United States
and Japan
A 256K DRAM development team was formed with 15
technicians at SST in March, 1984. With the technical
assistance from Micron Technology, the team succeeded
in developing 256 K DRAM in October. 1984
Technicians at SII started development of 256K DRAM
in September, 1983 separately from SST and succeeded in
it in July, 1985. In terms of mass production and sales
adaptability, it was judged to be better than a domestically
developed DRAM and later it became the major product
of SST
Developed under the technical guidance of two Korean
scientists at SSI. It was at the same level of technical
sophistication with the 64K DRAM
Four core ICs for VTRs were 100 % localized
Voice -Syn
thesized IC
256K SRAM
Developed by using linear predicting coding method, it

can synthesize a voice up to 40 minutes
Developed with domestic technician team of 40 people
1MRAM
'1 Mega RAM Project Team was formed within the

Semiconductor Research Institute. The team was
composed of 5 teams of 48 technicians. It was developed
third in the world after the United States and Japan
Source: ibid.. 558-562

167
With the establishment of SSI in Silicon Valley, California, SST began the
development of DRAM devices in May, 1983.
Starting with the successful
development of a 64K DRAM in November, 1983, various DRAM devices were

developed. Table 46 shows the various types of DRAMs developed during the
1983-1986 period.
Overseas-Orientation Period (1986-1987)

In this period, the electronics industry in Korea witnessed remarkable
growth both in production and exports due to the sharp rise in domestic and over
seas demand, as well as the active investment in facilities to support the increased
demand. In 1986, the production of electronics industry increased 45.6% from the
previous year and exports showed an increase of 65.3% amounting to US$6.7
billion.
On the other hand, pressure from the United States to appreciate the
Korean Won and to open the domestic market became stronger. The abrupt rise in
the value of Won put the domestic industry in a financially difficult situation.
Moreover, import restrictions against Korean products were imposed not only by
the US but also by European countries. Accordingly, various kinds of non-tariff
barriers against TVs, VTRs, and Electronic Ranges were imposed. Anti-dumping
litigation threats were increasing heard from the industries of the advanced
countries producing goods
which
competed
against
Korean products.
Domestically, frequent labor strikes and demands for wage hikes became another
burdensome factor.
To actively cope with the changing environment in both the domestic and
international markets described above, Samsung Electronics concentrated its
168
efforts on improving export competitiveness and reducing production costs. As a

measure to strengthen export competitiveness, SEC switched its export products
from low-priced standardized electronics goods to high-quality goods or such
high-priced high-tech products as computers, office and factory automation
machines, and news media equipment. In addition, a new building was added to
the integrated research institute and an in-house technical college was opened to
strengthen its R&D efforts. In addition, overseas branches of the research institute
were established in Tokyo, Japan and Santa Clara, USA to acquire advanced
foreign technologies.
As a measure to maintain price competitiveness by reducing production
costs, factory automation and localization of parts were pursued . Factoiy
automation was implemented under the leading role of a production technology
research center, and localization of the parts was carried out by the nine executing
committees formed by product lines under the co-sponsorship of cooperation
companies.
In this period, SEC expanded its overseas networks of sales subsidiaries
and branches, and completed a plant in Great Britain. In technology exports, SEC
exported TV manufacturing technologies to Indonesia, Brazil, and the Dominica in
1986, and, to the Philippines in 1987.
The period of 1986-87 can thus be described as a period for SEC to have
concentrated on technological development and production of high-tech products,
and to have prepared for transforming itself into an overseas-oriented company.
169
Alignment of R & D Strategies and Organizations
The basic goals of R&D activities during this period were: 1) to pursue
technical self-reliance; 2) to secure consumer confidence in SEC products through
perfect design and quality; 3) to actively develop basic parts and materials and
strategic exports items; and 4) to continue to upgrade the technological level of
SEC products.
To accomplish these basic goals, SEC pursued the following strategies:
Increase in R&D investment and Technical Manpower: During the 198687 period, SEC invested more than 80 billion Won (US$100 millions) in R&D
equipment, and technological cooperation with domestic research institutes and
universities. For securing top-notch technical manpower, SEC hired experienced
and inexperienced technicians. The technical manpower at SEC increased to 1,688
in 1987 from 1,524 in 1986 as is shown in Table 47
TABLE 47
TECHNICAL MANPOWER AT SEC
Classification
Researcher
Research Assistant
Total
Class 1
Class 2
Class 3
Sub-Total
Class 4/5
1986
Company
Research
Overall
Institute
14
35
99
35
747
230
881
279
643
122
1.524
401
1987
Research
Institute
37
16
89
29
290
940
1.066
335
622
115
1.688
450
Company
Overall
Source: ibid.. 455.

unit: number of persons
170
Construction of A New Research Building: In April, 1987, a new research

building was completed. This building was equipped with such high-tech
equipment and facilities as an EMI Chamber, an Anecoic Chamber, a CAD/CAM
Room, a Micro-processor Development Room, a Custom IC Room,
and an
Inverter Voltage Regulator Room.

Establishment of Overseas Branches of the Research Institute: In May,
1987, overseas branches of the research institute were established in Tokyo,
Japan and Santa Clara, USA in order to obtain information about high
technologies and to learn core technologies and, at the same time, to contribute to
the development of industrial machinery and high-tech consumer electronics
products on the spot.
The Santa Clara Branch employed six personnel including local employee
and they engaged in R&D in the fields of computers, office machines, and
information and communication. The Tokyo Branch was composed of ten people
including one locally hired and they engaged in R&D in the fields of industrial
robots machinery, consumer electronics, and product design.
The major tasks of these overseas branches were: 1) selection and
execution of R&D subjects; 2) proposition of R&D subjects based on the
information gathered on the spot; 3) purchase and forwarding of the samples
(products and parts) for R&D; 4) gathering of technical information and data; and
5) supporting the selection of technical licensing companies.
171
Establishment of An In-house Technical Graduate School:
In January,
1987, an in-house technical graduate school was founded in order to train and
foster technical manpower
and to strengthen the capability of technological
development. In November, 1986, the first group of 71 students were recruited

in the three departments of mechanical instrumentation engineering, electronics
and communication engineering, and computer engineering. The period of educa
tion is two years for six semesters and, to graduate, students must take eight
subjects. After graduation, they are placed in R & D sectors as special researchers.
Technical Licensing Agreement
During the 1986-87 period, SEC concluded five cases of technical licensing
agreements: three with US companies, one with Japanese company, and one with
an Italian firm (see Table 48).
Overseas Investment in Technology Development: In January, 1986, SEC
concluded an agreement with Micro Five Corporation of the USA by investing
US$950,000 for joint-development of computer technology. With this investment,
SEC took over 36.4% of Micro Five Corporation stock. In June, 1986, SEC made
an additional investment of US$200,000 and, in May, 1988, by investing an
additional US$1.25 million, SEC had virtually taken over Micro Five Corporation
by securing 99.8 % of its shares and by replacing members of the board of
directors with SEC people.
172
TABLE 48
TECHNICAL IMPORTATION (1986-1987)

Date of
Agreement
July 31,1986
Oct. 6, 1987
Oct. 16, 1987
Dec. 8, 1987
Dec. 28. 1987
Supplier of
Technology
Contents of
Technology
Conditions of
Agreement
Contract period: 2 years; Royalty:
l)For MS-DOS-downpayment of
US$ 120,000 and US$ 13 per unit
MS-DOS and GW- for the portion exceeding 9,230
Microsoft
Corporation of BASIC software
units, 2) For GW-BASIC - down
USA
payment of US$ 250,000 and US$
30 per unit for the portion
exceeding 8,333 units
Phoenix Inc. ROM-BIOS
Contract period: 5 years: Royalty:
of USA
technology
US$250,000
Supply of technical Contract period: 3 years; Royalty:
information and data, downpayment of 50 million Yens
Toshiba Co. of non-exclusive use of and technical information fee of
Japan
patent right, and 25 million yens per model, annual
technical consultancy fixed payment of 10 million yen,
for manufacturing Hi- plus US$ 2.1 per set as royalty
Fi Digital VTRs
Use of patent right, Contract period: 5 years; Royalty:
supply of technical 2% of the gross sales for 3 years
Comport Inc. information and data,
of USA
technical consultancy,
and technical training
for production and
sales of Hard Disc
Driver
Technical assistance Contract period: 8 years; Royalty:
Beretta of Italy for
manufacturing 130 million Lira
and sales of Gas
Boiler and its parts
Source: ibid., 461-462.
173
Development o f High-Tech Products
During the 1986-1987 period, various types of new products ranging from
video equipment, audio equipment, consumer electronics and industrial equipment
and materials were developed as shown in Table 49.
TABLE 49
DEVELOPMENT OF NEW PRODUCTS (1986-1987)
Area
Video
Equipment
Audio
Equipment
Consumer
Electronics
Period of
Development
Nov. 1984 Apr. 1986
Aug. 1985Aug. 1986
Feb. 1987Sept. 1987
Feb. 1987Oct. 1987
June. 1986Apr. 1987
Apr. 1987Dec. 1987
Apr. 1985Feb. 1986
May 1987Dec. 1987
Sept. 1986Dec. 1987
Dec. 1985Nov. 1986
July 1986Mar. 1987
Products
Remarks
Digital TV
45" Project-ion
TV
Digital Video
File System
Teletext
Various functions such as picture in picture,

on screen displav. and remote control
All functions remote controlled. Started
production in December, 1986
First in the world to be developed
Both English and Korean can be typed
Satellite
Broadcasting
Receiver
Hi-Band VTR
Developed under an OEM contract with an

American buyer
Compact Disc
Plaver
Digital Audio
Tape Recorder
High-Speed
Laser tape
Copier
HumiditySensor Micro
Wave Oven
Auto Selection and All Auto Repeating

functions and attached LED Level Meter
Double Reed Solomon that can detea error
Adopted Super-VHS system
Super-Mini
Micro Wave
Oven
First in the world to be developed
First in Korea to be developed and second

in the world after Japan, one-touch auto
cooking, 12-hour programmed cooking
functions, and self cleaning coating.
60 % smaller than existing micro wave
ovens
174
TABLE 49 CONTINUED
Industrial
Equip, and
Materials
Oct. 1986Aug. 1987

Sept. 1986Sept. 1987
Jan. 1984May 1985
Electronic
Dish Washer
Vacuum
Cleaner
Automatic
Parts Injector
Micro software program and hardware

circuit developed bv SEC itself
Easily convertible into stick-type, handytvpe and tank-tvpe
Automatic insert of more than 40 different
types of parts into PCB
Feb. 1986Feb. 1987

Aug. 1986Mar. 1987
Aug. 1986Aug. 1987
Sept. 1986Oct,. 1987
Coal Sheer
First in Korea to be developed
Plasma
Monitor
BarCode
Scanner
Portable Type
Writer
First in Korea to be developed
Dec. 1986Nov. 1987

May 1986Jan. 1988
Plane Paper
Copier
Broadcasting
Equipment
May 1986
Mono- Crystal
Ferrite
Reads such bar codes as UPC of USA, EAN

of Europe and JAN of Japan
Types 5 languages such as English, French,
German, Italian and Spanish, and
memorizes up to 1,800 characters
Copies mono-colors, started development
through OEM sales for Korea Xerox
Developed through business cooperation
agreements with Ikegami for camera.
Shibasoku for color monitor, and Soy for
camera/VTR.
A core part for VTR Head. Developed
second in the world after Japan, started full
production in August 1987
Source: ibid., 463-70.
Expansion of Overseas Networks of Production Subsidiaries. Sales Subsidiaries.

Branches and Service Centers
Establishment of An Overseas Production Subsidiary: In October, 1986,
Samsung Electronics Manufacturing United Kingdom Co. (SEMUK) was
established in the City of Billingham, U.K. for the manufacturing of micro wave
ovens and VTRs. The total amount of investment was US$ 5 million. Full
operation of the plant started in November, 1986 with 500 local employees.
Expansion of Overseas Sales Subsidiaries: In September, 1987, Samsung
Electronics Canada Inc. (SECA) was established by elevating the Toronto Branch
175
to the status of subsidiary and, at the same time, Samsung Electronics Australia
Pty Ltd. (SEAAU) was founded in New South Wales by elevating the existing
Sydney Branch to the status of subsidiary.
Expansion of Overseas Branches: During the 1986-87 period, five more
overseas branches were opened separately in Milano, Italy; Sao Paulo, Brazil;
Bangkok, Thailand; Paris, France; and Madrid, Spain.
Expansion of Overseas Service Centers:
Since 1975, when SEC first
established an overseas service center in New York, the overseas network of

service centers had been continually expanded. By the end of 1987, eight service
centers were being operated directly by SEC and worldwide there were six
warehouses for parts and 4,191 service agents.
Globalization Period (1988 to the Present)
SEC has led the growth of the electronics industry in Korea in such diverse
sectors
as consumer
electronics,
information
and communication,
and
semiconductor components, SEC has also led the development of technology,

production, sales, exports, and the opening of overseas markets and expansion of
overseas production facilities. To be sure, since 1984 SEC has ranked first in the
Korean electronics industry. In November, 1988, SEC became the largest single
enterprise in Korea by absorbing Samsung Semiconductor Company. Furthermore,
to accelerate overseas production and diversification of export markets, it set up
color TV plants in Mexico and Thailand.
Consolidation of Business Sectors
The merger of Samsung Semiconductor with SEC was realized as a part of
the transformation strategy of the Samsung Group based on the long-term
176
development plan toward 2000 advocated by Kun Hee Lee in his inauguration
speech as chairman of the Samsung Group on December 1, 1987.
Around the time of merger, both the global electronics industry and the
world economy had been undergoing rapid change and structural reorganization
due to technological innovations in microelectronics and the protective trade
policies of the advanced countries. The information industry, which was centered
around the semiconductor and information and telecommunication sectors, was
becoming systematized toward producing more complex and multi-functional
products and it was adopting technical levels which went beyond the production
of a single product based on a simple technology.
Many Japanese electronics makers were enjoying the advantages resulting
from the integrated production
of consumer electronics, semiconductors and
industrial electronics controlled and operated by a single company. Moreover,

labor-intensive and standardized consumer electronics which Korea had been
producing were being challenged by tough competition from next-tier NICs due to
higher production costs resulting from an overvalued Won currency and wage
hikes as well as stiffer trade barriers coming from advanced countries in the
international market. Therefore, it had become imperative for the domestic
electronics industry to switch to high value-added and high-tech products.
With the consolidation of three business sectors, SEC could retain in-house
technology for designing custom ICs that were the prerequisite for developing
multi-functional and high value-added consumer electronics products. Moreover,
from the standpoint of the semiconductor and communication sectors, SEC could
diversify its product line by developing next-generation semiconductors for
consumer electronics products. Furthermore, the technical experience gained by in
177
the development of semiconductors and computers could be combined and used in

a more efficient way.
The advantages resulting from the merger were: 1) SEC could concentrate
on the development of high value-added products and thus maximize profits by the
integration and use of highly-qualified technical manpower; 2) SEC could more
easily adapt to increasing competition in the continually changing international
trade environment, and improve marketing capability by unifying overseas business
networks; and 3) SEC could expedite and aggressively participate in the
development - a crucial and lucrative high-tech sector.
Technology Importation and New Product Development
Imports of Advanced Technology after 1988:
In May, 1988, SEC
concluded an agreement with Donald Herbert Technology & Micro Peripheral Inc.
(DHT/MPI) of the USA to import technology related to the design and
manufacturing of printer body, and printer head. With the technical assistance from
DHT/MPI, SEC produced and exported 100,000 printers annually.
To manufacture and sell hard disc drivers, SEC concluded agreements with
Comport Inc. of USA entailing in-paid capital and technical assistance. Under this
agreement, SEC invested US$ 750,000 to participate in the management of
Comport, to jointly
share technology and patents, and to give the rights of
manufacturing and sales. The production of HDD began in September, 1988 and
they were supplied to Comport.
In January, 1988, SEC signed a technical assistance agreement with
Toshiba of Japan to manufacture VTRs. At the same time, both parties agreed to
178
establish two joint-venture companies in Seoul for the production and sales of
finished VTRs and VTR Heads.
The Information and Communication Business Sector of SEC concluded an
agreement with Sanyo Electric of Japan for the manufacturing and sales of
electronics copiers. Under the agreement, Sanyo Electric of Japan was to supply
technical consultancy about research, development, and manufacturing as well as
oversee the domestic sales of electronics copier for six years.
Development of New Products:
By applying the R&D results and
technical experience accumulated over the past years to such diverse sectors as
consumer electronics, industrial equipment, information system and telecommuni
cation, and semiconductors, since 1988 SEC has developed and commercialized
various new products having new functions. In particular, the development of
highly sophisticated semiconductors was the most noteworthy achievement in this
period.
Table 50 summarizes the chronology of semiconductor development from
1987 to the present.
Other recent accomplishments on the R&D front include development of
Samsungs pen-based PC, G$ facsimiles, RISC workstations, Super-VHS VCRs,
and the worlds fastest CPV.
179
TABLE 50
CHRONOLOGY OF SEMICONDUCTOR DEVELOPMENT AFTER 1987

Period of
Development
Mar. 1987
Oct. 1986Feb. 1988
Products
IC for Industrial
Equipment
4 M RAM
Feb. 1987May 1988
2 Micron Bipolar
Process
M y 1987Sept. 1989
Super-speed 256K
SRAM
Nov. 1988
1M SRAM
June 1987Dec. 1988

May 1989
Aug. 1990
256K EEP ROM
May 1992
Oct. 1992
4M SRAM
64 DRAM
4M MASK ROM
16MDRAM
Remarks
61 different types of semiconductors for communication
industry were developed and produced.
Developed by the Semiconductor Research Cooperative
established in October 1986 by a consortium of domes
tic semiconductor producers(SEC, Goldstar, Hyundai)
and Electronics and Telecommunication Research Insti
tute. SEC completed a 4M RAM plant in 1989.
With this process, the production of digital TV, highperformance VTR, and high value-added communica
tion and aero-space products is possible
Semiconductor for micro computer, mini computer,
work station, word processor, facsimile, radar, voice
recognizing device, and signal processor, etc.
Semiconductor for portable computer, car phone, multi
function telephone, terminal, facsimile, various com
puter, OA equipment, and military equipment.
Semiconductor at the same functional level of 1M DRAM. Developed by SEC's own design and technology.
A semiconductor memory device capable of holding 16
million bits of data on a single chip. SEC became the
first company in the world to ship commercial samples
of 16M DRAM.
A semiconductor chip which holds 68 million cells of
CMOS configuration. First in the world to be developed
Source: Twenty Years History o f SEC, 661-665; Creativity and Innovation. 18 and 46.
Rapid Progress of Overseas Business and Market Diversification

Expansion of Overseas Production Facilities: In June, 1986, the SSIs
production plant was completed in Silicon Valley, California to develop and
produce high-tech products.52
52A total of USS 34 million was invested in the plant The plant has a monthly
production capacity of 5.000 pieces of 5 wafers, and it has the technical facilities for developing
180
In March, 1988, Samsung Mexicana, S.A. De D.V. (SAMEX) was estab

lished in Tijuana, Mexico as a subsidiary of Samsung International Inc. (SSI),
USA to produce color TVs. The plant, having an annual production capacity of
600,000 units of color TVs, was completed in October, 1988. It also produces TV
chassis supplied to SSI.
To cope with the import restrictions of the advanced countries including
the USA against Korean consumer electronics products and to strengthen market
penetration in Southeast Asia, SEC established the Thai-Samsung Company in
Thailand as a joint-venture with Saha Pathana Inter-holding Co., Ltd. of Thai
land.53 The plant began full operation in August, 1989. It manufactures such elec
tronics products as color TVs, VTRs, refrigerators and cassette players. 50% of
the products are sold in Thailand and the remaining 50% are exported.
To secure a production base to tap into the European markets after the for
mation of EC in 1992, a VTR plant with an annual capacity of 120,00 units was
completed in 1990 in Barcelona, Spain.
As a measure to secure a bridgehead to penetrate into the Middle East,
Africa, and Eastern European countries, a color TV plant with an annual produc
tion capacity of 200,000 units was established in Izmir, Turkey in December, 1989
as a joint-venture with IES Group (Samsung -51%: EES- 49%) of Turkey.
In February, 1989, SEC signed a joint-venture agreement with the Maspion
Group of Indonesia to manufacture refrigerators. The name of the joint-venture
and producing high-density and high value-added semiconductor products having over 4M
DRM devices. ASIC, and Logic, ibid., 668.
53The ratio of investment was 51% (Samsung) and 49% (Saha). The conditions of
agreement were: 1) Samsung would provide technology, machinery and equipment, management
and allow the use of its brand name; 2) Saha would supply land, leasing rights of the plant and
manpower, and 3) total amount of investment would be US$ 9 million, ibid., 626.
181
company was P.T. Samsung and the total amount of investment was US$7.4
million (Samsung-50 %: Maspion-50%). The plant began operation in January,
1990 with an annual production capacity of 100,000 units carrying the Samsung
brand.
As a strategy to advance into the Eastern European market, a joint-venture
company was established in May 1989, with the Orion Company of Hungary with
a total
investment of US$ 5 million (Samsung-50%: Orion-50%) for the
production of 100,000 color TV sets.

Since 1990, more overseas production subsidiaries have been established.
As of July, 1993, SEC operates offshore manufacturing plants in twelve countries,
producing a wide range of products from color TVs to semiconductor chips
Expansion of Overseas Network of Sales Subsidiaries and Branches: In
1988,
five overseas sales subsidiaries
and seven overseas branches were
established in an effort to diversify markets and to expand overseas sales networks.

In the case of sales subsidiaries,
Samsung Electronics France S. A.
(SEF)54 was established as a joint venture with the KED Group in France in
October, 1988, Samsung Information System America (SISA) was established as
an independent organization to integrate and control sales and marketing of
information and communication equipment in the United States and, in December,
the Hong Kong and Tokyo branches were elevated to the status of sales
subsidiaries. In 1989, the Panama branch was also elevated as sales subsidiary.
Since 1990, the overseas network of sales subsidiaries has been expanding and, as
of July 1993, SEC runs 18 sales subsidiaries worldwide.
54The total amount of investment was 5.7 million French francs and the investment ratio
was 34 % for Samsung and 64 % for KED. With the opening of this subsidiary. Samsung's Paris
Branch was absorbed into the joint-venture company, ibid.. 628.
182
In the case of overseas branches, the Buenos Aires branch was established
in March, 1988 and export operations related to business related to Argentina and
Uruguay originally handled by the Santiago, Chile branch were transferred to it.
The Johannesburg, South Africa branch was established and all export activities in
Africa originally handled by SEUK were transferred to it. The Vienna, Austria
branch took over export operations in Austria and the Eastern European region
originally handled by SEG, while the Taiwan branch took over the export business
in Taiwan originally handled by the Hong Kong subsidiary. SEC's overseas
branches have continued to grow in numbers as well as in the regions they
represent and, as o f July 1993, SEC operates 37 overseas branch offices.
The Major Institutional Features of SECs Supporting Innovation System
This section evaluates the major institutional features of SECs supporting
innovation system that have become the contributing factors to the rapid technical
mastery and the resultant growth that SEC has achieved in the past 25 years.
SEC's innovation system may be said to have been centered around the learning
and searching process. SECs main institutional features to support this learning
and searching process are categorized into four areas: human resource
management, R&D system and technology development training, user-supplier
interaction, and diversification and globalization.
Human Resource Management
Emphasis on Employee Education
The management guidelines of the Samsung Group is based on an
emphasis on human resources. This corporate philosophy is being pursued
through employee education. Samsung has set the following four educational
183
objectives in its development of human resources: 1) the establishment of a solid

spiritual foundation and a steadfast dedication on the part of the Samsung
employee; 2) enhancement of business management capabilities and professional
expertise crucial for carrying out job responsibilities; 3) developing the drive and
adaptability needed to meet changing corporate environments; and 4) the nurturing
of a wholesome social participant, both cultivated and enterprising.55
In order to realize these objectives, the educational program for Samsung
employees is divided into three sectors: business management capability, knowl
edge of professional expertise, and mental attitude.56
This education is systematically provided to all levels of the corporate
structure; from new recruits to top management. Different points are emphasized
for different levels of management.
Introductory Education for Recruits. In 1957, Samsung became the first
Korean company to hold open entrance examinations. Ever since, it has hired
highly qualified personnel on an annual basis. But more than just hiring qualified
personnel, the group has focused on developing employees into even more
accomplished people. Thus, the introductory education given to new recruits is
being emphasized under the firm belief that strict guidance in the early stages
allows an employee to accomplish much in his or her company and social life.
55Office of the Executive Staff of Samsung Group, The World o f Samsung (1990), 38.
^The development of business management skills centers on increasing the efficiency
in management of work and the individual. The education seeks improvement in the areas of
leadership, human interaction, creativity, communications, objective management, decision
making ability, strategy formulation and performance. Professional expertise is the individual's
ability to perform job responsibilities, which is the basis for improved productivity. That ability
relates to various systems, including those for sales, production, technology and management.
Mental attitude refers to the basic principles and virtues desired in the Samsung employees, as
well as the basic ethics needed by members of society, ibid.
184
Through strict education, the company's management philosophy and goals are
taught and a solid set of values, work ethics, and national perspective are instilled.
In addition, a basis is laid for a healthy mental attitude and strong decision
making ability so that, by understanding and incorporating Samsung's management
philosophy and spirit, employees can believe that the individual's development is
the company's development, as well as that of their country.
The education of new recruits lasts about one year. During the first month
of their employment, all personnel participate in a common introductory education
program. After they have been assigned to their respective affiliates, three months
of basic education about their job is conducted. During this period, the recruits are
introduced to the management situation of their respective company and are given
on-the-job training. They are also required to enhance their basic knowledge of
foreign languages, data processing and management accounting. During the next
she or seven months, the recruits receive on-the-job training in their respective de
partments from senior employees, and acquire the knowledge, skill and basic out
look needed for their jobs.
The Main Features of the Samsung Groups Educational Program
Educational System: Samsung Groups education function is divided into
two operational sectors. The Human Resources Development Center handles the
Groups general education, including instruction in basic principles of planning,
management and execution, and education carried by individual affiliates.
The Center plans and manages the introductory education for recruits and
the education program for management and executives. It also performs the stra
tegic role of advising individual affiliates on new educational programs and sys185
terns. Each affiliate conducts educational programs that are distinguished by busi
ness line and function.
The Groups general educational program deals with both business man
agement and technical training. Business management education is again divided
into education according to level and function, and includes language training and
special education.
The Samsung Group operates a foreign language dormitory that conducts
intensive instruction in two languages, English and Japanese. Employees undergo
three months of live-in language education that enhances their conversational abil
ity and teaches them the culture, customs, and negotiation methods of a foreign
society. The course imparts the knowledge needed by the overseas employee
through discussions, presentations, and seminars.
In the case of foreign employees, the company offers instruction that aims
to increase their understanding of Korea and Samsung in order to create a sense of
belonging and unity. Foreign employees working in Samsung subsidiaries in
English-speaking regions and in Japan are taught Samsung's history, management
methods and global strategy as well as Korean culture. They also visit Samsung
offices in Korea and tour Koreas historical sites.
Method of Education:
Spiritual education is the basis of all Samsung
Groups educational programs. The intent is to instill the personal values critical to
leading a productive life in society. Another characteristic of Samsung's instruction
is its commitment to actual application. Therefore, all functional and management
level education focuses not only on theory but also on practical knowledge that
186
can be used in the workplace. Teachers include experienced managers from

Samsung as well as distinguished professors from other outstanding institutions.
Education Facilities: In its pursuit of human resource development, the
Samsung Group operates five training centers for management education and one
center for technology education in Korea. The Group's advanced training facilities
can educate 2,000 people simultaneously.
In order to meet a growing demand for education, the Samsung Group
plans to establish seven additional training centers for management education and
two for technology instruction. At that time, Samsungs education facilities will be
able to accommodate 4,200 people daily. Also, the number of instruction sessions
available to a Samsung employee each year will increase from five to eight.
Characteristic Features of SEC's Education and Training
Educational Organization and Structure:
In addition to the in-house
educational program for all Samsung employees planned and managed by the
Human Resource Development Center of Samsung Group, SEC operates separate
educational and training programs in its business sectors. Each business sector
within SEC has set up an organization to exclusively handle their own educational
and training programs.
SECs educational programs are centered around On-the-Job Training
(OJT) and Self Development Program (SDP). It also offers Off-the-Job Training
(OFF-JT) at the functional and management level, sectoral training, and special
training. Figure 6 shows the structure of SEC's educational system.
On the Job Training: As part of introductory training, new recruits are
placed individually or by group for OJT under the supervision of senior employees
187
in the departments they are assigned. OJT focuses on the knowledge and basic
skill needed for the job and lasts about six or seven months.
FIGURE 6
THE STRUCTURE OF SEC'S EDUCATIONAL SYSTEM
Individual OJT
OJT
Group OJT
Spiritual Education
General Capability
Correspondence
Basic Business Skill

Business Management
SDP
Foreign Language Test
Group Test
Company Test
Introductory
Functional and
Management Level
Training
Capability Improvement
Promotion
R&D Technlogy Sector
Production Technology Sector
OFF-JT
Sectoral Training
Overses Business Sector

Domestic Business Sector
Management Business Sector
Organizational Development
Foreign Language
In-house Graduate School
Special Training
General Education
Supplier Education
Special Education
Others
Source: ibid.. 815
188
Self Development Program: Every employee is encouraged and sometimes

forced to improve their basic knowledge of job-related subjects and foreign
languages by taking correspondence courses and tests of foreign language skills.
Foreign language skills are particularly emphasized. Employees receive three
months of live-in language education at the foreign language dormitory operated
by the Group. After a three month session, they are given a test and the test
results are reflected in the job evaluation for promotion.
Off the Job Training: Functional and management training focuses on
improving the professional expertise of employees at all levels. Introductory
training is for newly recruited employees. Both capability improvement and
promotion training are provided for employees who are eligible for promotion to
upper level positions including programs for managers and supervisors.
The sectoral training concentrates on enhancing employees abilities in their
respective fields of works. For example, R&D education is given to enhance the
R&D capability of personnel engaged in R&D. Based on the year of employment
and level of position, training is divided into four training categories: introductory
training, basic training, application training, and advanced training.
Production technology training is divided into three areas covering
automation technology, manufacturing core technologies, and management
technology. It is given to employees in the production sector in order to improve
productivity and factory automation. In addition, three levels of quality control
education - introductory, applied, and advanced - are provided to all employees
according to their years of employment and level of expertise.
189
Business management training is composed of labor and management

education, management accounting education, computer and office automation
education, and personnel management education.
Overseas business training is aimed at providing employees engaged in
overseas sales activities with overseas marketing techniques and professional
knowledge related to export and import procedures including foreign languages.
Domestic business training is focused on improving sales techniques, market
research techniques, and other techniques related to high-quality after service.
R & D System and Technical Training
SEC's Organizational Structure of R&D
Samsung Electronics has 12 R&D centers worldwide, including six R&D
centers in Korea that deal exclusively with each of four major business areas:
computer systems, consumer electronics, semiconductors, and telecommunication
systems.
SECs R & D activities are organized and carried out under a three-tiered
research strategy as is shown in Table 51.
Research into basic or core technologies is carried out by the Samsung
Advanced Institute of Technology (SAIT).57
57The centerpiece of Samsung Group's R&D efforts revolves around SAIT. In support of
SAIT are 23 company-sponsored research centers throughout Korea. Overseas, the Group
operates 10 research corporations and 12 other research facilities to rapidly collect information
on new technologies and accurately assess the needs of overseas consumers. In 1992, the group
began construction of Samsung's Taedok Research Center in the Taedok Science Town, outside
Taejon. Some refer to the area as Koreas Silicon Valley, Committed to using the same worldclass research facilities to advance the fields of aerospace, environmental protection, and
precision devices, Samsung is investing $400 million into the new facility, which is scheduled for
completion by the year 2000. Following completion, the mechatronics and electronics research
facilities near Suwon and the instrumentation and heavy industry research laboratories near
Changwon, will be combined with the aerospace and chemical research centers already located in
Taedok. The year 2000 will see the complete integration of Samsungs R&D activities for its
190
Application technology and mid-term projects are pursued by research

centers associated with the company's four business sectors. Research teams
attached to each division unit assist in developing and fine-tuning manufacturing
and production technologies.
TABLE 51
SEC'S THREE-TIERED R&D SYSTEM
Samsung Electronic Company

Integrated Research
Centers
Role
Research
area
Establishment of technologcal foundation for

growth of company
Strengthening of co
operation with SAIT
New products develop
ment and commerciali
zation on a short and
mid-term basis
Research Team and

Design Office attached
to Business Sector
Maximization of com
pany's profit
Samsung Advanced Institute

of Technology
Establishment of technologi
cal foundation for the
growth of the Group
Technical supports to affili

ate companies
Commercialization of Development of new prod
new products on a shot- ucts on a mid and long-term
term basis
basis
Diversification of mod
els, Improvement of
functions, and cost
reduction of existing
products
Development of core tech

nologies, bottle-neck tech
nologies, and new materials
and parts
Source: ibid.. 837.
core business areas of electronics, engineering, and chemicals. The World o f Samsung (1993).
29.
191
This 'three-tiered' R&D organization integrates company research activities

ranging from basic science to new processes and improved manufacturing
techniques, the result of which is a consistent flow of new and better products.
Evolution of SEC Integrated Research Centers
In late 1970s, SEC consolidated and systematized the R&D activities that
had been progressing independently in each business sector in order to centralize
the control and operation of R&D. In December, 1979, Samsung Electronics'
Integrated Research Institute was established to carry out SEC's R&D activities in
a centralized manner. In the middle of the 1980s more research facilities and
personnel were added to the institute. With the merging absorption of Samsung
Semiconductor Company in November, 1988, SECs R&D organization was
restructured into three Integrated Research Centers: Integrated Research Center
for Consumer Electronics, Integrated Research Center for Information Systems
and Computers, and Integrated Research Center for Semiconductors.
Integrated Research Center for Consumer Electronics: Originally
established as an integrated research institute in 1980 in an attempt to integrate
SEC's
R&D activities, it was restructured into a research center to engage
exclusively in research related to consumer electronics, this research center is

composed of four research divisions in charge of developing core technologies
and parts, three laboratories assisting technological development, and five
administrative divisions including one overseas branch.
As of 1990, the number of personnel at the center totaled 699 and 85% of
them (591) were involved in Research. The percentage of R&D investment to
sales of consumer electronics sector reached 2.8 & in 1990. Table 52 shows the
growth-trends of R&D manpower and investment at the center.
192
Integrated Research Center for Information Systems and Computers: This

research center originated from the Samsung-GTE Research Center in February,
1979. In January, 1980, it was merged into the Samsung Integrated Research
Center. In July, 1980 it was separated from the Samsung Integrated Research
Center to function as development department within Samsung-GTE, and in
January, 1982 it became the Communication Technology Research Center. With
the merging absorption of Samsung Semiconductor and Communication Company
by SEC in November, 1988, the research center was restructured and expanded as
an Integrated Research Center for Information Systems and Computers. The
research center has 10 research divisions and two supporting divisions.58
TABLE 52
R&D MANPOWER AND INVESTMENT AT
SECS CONSUMER ELECTRONICS RESEARCH CENTER*
Classification
1988
1989
1990
R&D
Researcher
375
450
591
Manpower
Technical assistance
75
90
108
450
540
699
(Dispatch to SAIT)
(176)
(219)
(283)
R&D
Operational expense
150
361
531
Investment
Investment in Facilities
17
193
255
R&D/Sales(%)
1.7
2.4
2.8
Total
Source: ibid., 840

aunit: person; 100 million Won
38As of June 1989, there were 397 researchers and 95 research assistants, ibid.. 855.
193
Integrated Research Center for Semiconductors:
Started as the
Technology Development Office of Korea Semiconductor Company in January,

1974, it was absorbed into SECs Semiconductor Business Department in January
1980. When SECs semiconductor business was absorbed into KTC and later
separated from SEC in October, 1982, it became the Semiconductor Research
Center of Samsung Semiconductor and Communication Company. With the
merging of Samsung Semiconductor and Communication Company with SEC in
November, 1988, the center became one of the three integrated research centers
of SEC. The research center maintains research facilities in three locations, two in
Korea and one in San Jose, California.
The number of research personnel at the center has increased significantly
from 589 in 1986 to 1,863 in 1989. Table 53 shows the growth-trend of research
personnel at the Integrated Technology Center for Semiconductors from 19861989.
TABLE 53
RESEARCH MANPOWER AT SECS SEMICONDUCTOR
RESEARCH CENTER
Classification
1986
1987
1988
1989
Researcher
268
309
471
875
Research Assistant
259
283
480
887
Management
62
79
88
101
Total
589
671
1.039
1.863
Source: ibid.. 859.

aunit: person
194
Technology Development Training
SEC devotes an immense amount of energy to developing new technology,

with R&D personnel accounting for some 20% of all employees.59 SEC also pours
a great deal of effort into attracting and keeping the finest researchers and
technicians by sponsoring an on-going training program. SEC maintains a dual
system of training programs for researchers and technicians.
The Advanced Technology Research Center, established in 1990, is re
sponsible for training related to some of the more sophisticated technologies and
core processes. Each year about 1,500 technicians receive training in such ad
vanced fields as semiconductors, mechatronics, and computer software.
SEC also operates its own training programs for R&D personnel. Each of
SEC's research centers is responsible for training in its respective field.
Consumer Electronics Research Center: Figure 7 shows the Education
System for R&D personnel at the integrated research center for consumer
electronics.
Technology development education at the center consists of three levels:
introductory level for new recruits, basic and application levels for existing
employees, and specialist level for highly qualified employees. The program is
planned and managed by the technology education team at the center.
59Around 9,000 out of a total workforce of 45,000 are engaged in R&D at SEC's various
research centers. When including technicians at production divisions, the total number of
technical personnel is 12,000. Creativity and Innovation, 8.
195
FIGURE 7
EDUCATION SYSTEM FOR R&D PERSONNEL
Introductory Education for

New Recruits
Introductory Level
Basic education for

Technology TP
Early Utilization of
New Recruits
CAD/CAM Education
Basic Level
Basic Education for TP

Digital Basics & Application
TP Application & Specialization

Application Level
Improvement o f Design
Capability of Employees
Training & Maintaining of
Highly Qualified Technical
Manpower
Technical Graduate Course

Research Results Presentation
Micom & Logic Course
Specialist Level
Languages
T
Programming
Mechatronics Course
Specialist Training for

Core Sectors
Project Leader Training Course
Source: ibid.. 847.
196
Information System and Computer Research Center:
The technical
education system of this center is composed of a four level curriculum. The first
level is an introductory course for new employees that includes company course
and a research center course. The second level is a basic technology course that
consists of an introduction to technology course and on-the-job training. The third
level is a technology practice course that includes a short-term seminar on
technology and consignment education at other institutions. The fourth level is a
technology course for specialist that includes an in-house technical graduate school
course, business and academic training overseas, and a seminar on future
technologies.
Semiconductor Research Center:
The technical education program for
R&D personnel at the center consists of a basic training course for new recruits.
Technical courses are offered to employees based on their years of employment
and professional expertise. Education includes such areas as basic technology,
special technology, strategic technology and management technology.
The Efficient Network of User-Supplier Interaction
The electronics industry is largely divided into two sectors: the parts
components producing sector and the finished products producing sector.
An
integrated electronics maker like Samsung Electronics acquires tens of hundreds of

parts from both domestic and foreign sources and assembles and processes them
into finished products according to the design chosen for production. Therefore,
the quality control of parts and the monitoring of the adequate levels of parts and
inventory are critical in deciding the quality and price of finished products.
197
Accordingly, the coexistence and coprosperity of finished product makers

and parts producers are closely related to the success and failure of the electronics
industry.
In order to improve technological capability and product quality through
mutual technological cooperation between the parent company and parts
producers, in 1981 SEC initiated the formation of cooperative companies of
Samsung composed of sub-contractors for producing parts. SEC has provided
them with technical advice and training as well as financial support, and these
cooperative companies have been awarded preferential treatment in the selection
process of subcontractors. Table 54 shows the status of SECs cooperative
companies.
TABLE 54
THE STATUS OF COOPERATIVE COMPANIES*
1985
Total Number of
Subcontractors
Number of Cooperative
Companies
Total Amount of
Subcontract
Average Amount of Subcontract
Per Subcontractor
Average Amount of Subcontract
for Cooperative Companies
1986
1987
1988
490
550
594
599
130
123
170
181
432. 389
659. 336
951.411
1. 167. 956
882
1.199
1.602
1.950
1, 109
1,592
2. 173
2. 194
Source: ibid., 885

unit: number of company: million Won
198
Chapter Summary
In this chapter, an attempt was made to scrutinize the evolutionary growth
phases of a private Korean firm in terms of how its system of
innovation
(organizational learning and adaptation) has evolved through the changing

technological environment and how it has contributed to improving its technical
competency.
Samsung Electronics Company was chosen as the subject of the case study
in consideration of the spectacular growth it has recorded in less than a quarter of
a century. As a late-comer in the electronics business, SEC started its business by
producing black and white TVs on a consignment basis in 1970. today, it is the
largest single firm in Korea and one of the leading makers of memory devices that
has developed the worlds first 64-megabit Dynamic Random Access Memory.
This rapid pace of building up technological competence was made
possible through various forms of learning and efficient institutional adaptation at
different phases of growth resulting from changes in technological and competitive
environments.
SEC has gone through seven different phases of growth path. In each
phase, SEC has positively adapted itself to the changing environment by way of
organizational changes and technological innovations. In the adaptation process,
the importance of learning was strongly emphasized and learning was incorporated
into the every aspect of the companys management. The major channel of
technical learning was through technical imports in the form of technical licensing.
However, in the later phase of growth, SEC placed more emphasis on developing
in-house technological competence through heavy investment in R& D activities
and through in-house technical training.
199
The major institutional features of SECs innovation system can be

characterized as follows: 1) efficient human resource management with emphasis
on employee education; 2) R & D system and technical training; and 3) the
cooperative user-supplier interaction.
200
CHAPTER VI
THE POSITIONAL CHARACTERISTICS OF THE KOREAN NATIONAL SYSTEM OF
INNOVATION WITHIN THE INTERNATIONAL INDUSTRIAL NETWORK
Introduction
In the previous two chapters, we have investigated the Korean national
system of innovation from the perspectives of both the nation as a whole and a
representative firm with a focus being placed on the institutional features of the
innovation system supporting technological advancement in industry. In both
chapters, however, we have been concerned only with the domestic aspects of
innovation system without giving due attention to the relationship between and
among other national systems of innovation.
The national system of innovation does not exist in vacuum. It is rather
interconnected with other national systems of innovation. The interactive relation
ship among different national systems
of innovations points to the fact that
national systems of innovations are governed by different rules and norms, and
these interactive relationships can be captured in the network relationships
among different national systems.1
K..Cultural factors such as language, educational background, regional loyalties,

shared ideologies and experiences and even common leisure interests continue to play an
important role in networking. An appreciation of these sociological factors in both formal and
informal networks is a necessary complement to narrower economic explanations and helps
greatly to understand the importance of regional networks, geographical proximity and national
systems of innovation.... C. Freeman. Network of innovators: A synthesis of research issues."
Research Policy 20 (1991), 503.
201
This chapter, therefore, attempts to understand the Korean national system

of innovation within the context of the interactions among international networks
of national innovation systems. Section two investigates the evolutionary changes
in the international industrial networks. This section introduces a conceptual
framework to explain the evolutionary development of international industrial
network and utilizes such theoretical perspectives advocated in the theories of
long waves, regulation and industrial organization to capture the characteristics of
international industrial networks since World War II. Section three is concerned
with the positional characteristics of the Korean national innovation system within
international industrial networks. This section discusses the technological niches
Korea has successfully exploited by way of institutional adaptations to both the
technological changes and the resultant shifts in international industrial networks.
This section further explores the network relationship of the national systems of
innovation among the USA, Japan and Korea as well as that of between Korea
and the next-tier Asian NICs. The last section summarizes the chapter.
202
The Evolutionary Development o f the International Industrial Network
In this section, emphasis is given to the evolutionary development of

industrial networks crossing national borders through self-organizing interactions
between quasi-autonomous national innovation systems. To explain the
evolutionary development of international industrial network, a conceptual
framework is introduced utilizing the concept of dynamic interaction among
national innovation systems.
The main elements of such theories - long waves,
regulation and industrial organization - are critically reviewed in terms of their

similarities in perspectives with the ideas propounded in the conceptual framework
regarding the relationship between technological change and the global economy.
These theoretical perspectives are then further expanded to include the network
aspect of international industrial innovation activities resulting from the dynamic
interactions among national systems of innovation. Based on these perspectives,
the institutional characteristics of international industrial networks in the 20th
century will be investigated. Particular attention will be given to the characteristics
of international industrial networks since World War II to lay out a basis of
understanding the Korean national innovation system within the context of
international networks of interactions.
The Relationship Between Technological Change and the Global Economy:
A Conceptual Framework
From the perspective of technological change, the global economy can be
said to be an adaptive nonlinear network (ANN) with the following character
istics:2
2Xhis is a concept adapted from natural sciences and computer technology. Examples of
ANN are the central nervous system, ecologies, immune systems, the developmental stages of
multi-celled organisms, and the process of evolutionary genetics. See John H. Holland. "The
Global Economy as an Adaptive Process." in Philip W. Anderson et a! eds. (1988). 117-123.
203
1) the overall direction of the global economy is determined by

interactions among many nations acting in parallel;
2) controls on interactions are provided by the mechanisms of competition
and coordination among nations, mediated by mode of regulation, assigned roles,
and shifting associations;
3) interactions among nations entail networks of building blocks and they
are recombined and revised continually as the system adapts; and
4) the field of the global economy is typified by many niches that can be
exploited by particular adaptations and these niches are continually created by new
technologies.
Theoretical Perspectives on the Dynamic Interactions in the Global Economy
The notion of a dynamically interactive network relationship in the global
economy as proposed in the conceptual framework above is also one of the main
elements in the theories of long waves, regulation and industrial organization.
These theories give emphasis on the dynamic and interactive relationships between
technological changes and social and economic institutions. The following sub
section is a brief review o f the major elements of each theory:
The Lone-wave Perspective: The original attempt of this theory was to
analyze the wave-like movement of technological innovations and the emergence
of certain nations or regions as a growth center in the expansion phase of new
technological innovations.3
3This wave-like movement of technological innovations was first systematically

analyzed by Joseph Schumpeter based on the concept of Kontratiev Long-wave. Kontratievs
long wave theory is based on a capital goods replacement cycle for very long-lived capital goods,
which interacts with a cyclical pattern in the mechanism for financing long-run investments.
Schumpeters theory' is also based on the bunching of long-run investments, but the bunching is
due to the clustering of major innovations, rather than the periodically favorable credit market
204
In traditional long-wave theories, the causal elements for long-wave

expansion are viewed as accidental or external.4 In the late 1970s, however, a new
approach to long wave theory emerged within the Marxian tradition in which long
waves are viewed as the outcome of the interaction between the capital
accumulation process and the broad set of social institutions which are believed to
underpin accumulation. This set of institutions, which include political and
ideological structures as well as economic ones, is referred to as a social structure
of accumulation (SSA).5
conditions and the eventual need to replace old capital goods of Kontratievs theory. Despite the
differences, the two theories have in common a view of the long wave as an automatic, internally
generated phenomenon of the capitalist economy. Its economic factors - capital investment credit
markets, innovation - operate in a predictable and regular way to cause the long wave. For
Schumpeters long wave theory, see Schumpeter (1939), Van Dujin (1983), and Rosenberg and
Frischtak (1984).
4In traditional long-wave theories, expansion periods come from accidental and
external events. Paul Sweezy and Ernest Mandel, two leading Marxist economists, offer
theoretical frameworks through which alternating periods of accelerated and depressed growth
can be explained. In Sweezys view, the basic laws of motion of capitalism in its monopoly stage
produce a tendency toward stagnation because aggregate surplus tends to rise faster than the
normal outlet for the absorption of surplus. Prosperous periods come from accidental, external
events; depressed periods expose the normal working of the system. For Mandel, the
fundamental law guiding the long run movement of capital accumulation is Marxs law of the
tendency of the rate of profit to fall, resulting from a rising organic composition of capital. The
upturn is accidental and results from noneconomic factors such as gold discoveries, major
innovations, or capitalist victories over the working class, which activate counteracting
tendencies to the falling rate of profit. The depressive phase of the long wave is due to internal,
automatic, economic factors. See David M. Kotz, Long Waves and Social Structures of
Accumulation: Critique and Reinterpretation, Review o f Radical Political Economics. Vol.
19(4), (1987), 18-9.
5The primary assertion of the SSA approach is that a period of vigorous capital
accumulation requires the existence of a broad set of social institutions which support or facilitate
the accumulation process. The creation of a viable SSA ushers in a long wave expansion.
However, the long wave expansion contains the seeds of its own destruction, and ultimately both
the SSA and accumulation collapse, ushering in a long wave contraction. Eventually a new SSA
is constructed and the process begins again. The major works are Gordon (1978, 1980); Gordon,
Edwards, and Reich (1982); Weisskopf (1981); and Bowles, Gordon, and Weisskopf (1983). For
detailed explanations, see David M. Kotz, op. cit.. 20.
205
The Neo-Schumpeterian long-wave theorists share the same theoretical

ground with the SSA approach in terms of viewing the relationship between new
technologies and economic and social systems as the central feature of long waves.
Carlota Perez (1986), in particular, sees the existence of long waves as the
manifestations of the harmonious or disharmonious behavior of socio-economic
and institutional system on the national and international levels. She suggests that
the capitalist system can be seen as a single very complex structure, the subsystems
of which have different rates of change. The technoeconomic subsystem has a
much faster rate o f response than the social and institutional subsystem. The long
waves are successive phases in the evolution of the total system or successive
mode of development. The root cause of the dynamics of the system is the profit
motive as generator of innovations in the productive sphere understood in the
broadest sense as a way of increasing productivity and expected profit from new
investment. Each mode of development responds to a specific technological style
understood as a sort of paradigm for the most efficient organization of production.
The particular historical form of such a paradigm evolves out of certain key
technological developments, which results in a substantial change in the relative
cost structure facing industry and, at the same time, opens a wide range of new
opportunities for taking advantage of this particular evolution as depicted in Figure
8.6
În essence, Perez assumes a strong feedback interaction between economic, social and
institutional spheres, which generates a dynamic complementarity centered around a
technological style. Carlota Perez, Structural change and assimilation of new technologies in
the economic and social system, in Christopher Freeman, ed.. Design, Innovation and Long
Cycles in Economic Development ( New York: St. Martin's. 1986), 27.
206
FIGURE 8
CHAIN OF RELATIONSHIPS BETWEEN TWO SUBSYSTEMS
Profit motive
^LiTechnological style
(evolution in quantity and
quality of labor)
MX
Evolution pattern of
the occupational
structure
of consumer's
product demand
S.
Income distribution
The Regulation Perspective:
The theory of regulation7 attempts to
develop a set of historically founded concepts as intermediate links between

theory and economic history and, in particular, to demonstrate that the institutional
evolution of capitalism is the key to its history.8 The basic elements of regulation
7This theory was propounded by the so-called Regulations school of French postMarxists. This approach can be seen as the marriage between the neoclassical lessons about an
economy as a self-equilibrating system and the Marxist idea of an economy as evolving through
history, generating tensions and conflicts that were ultimately disequilibrating and finally
resolved through the political process. For theoretical details, refer to M. Aglietta, A theory o f
Capitalist Regulation: The U.S. Experience (London: New Left Books, 1979); A Lipietz.
Mirages and Miracles: The Crisis o f Global Fordism (London: Verso, 1987)
8Michael J. Piore, "Fragments of a Cognitive Theory of Technological Change and
Organizational Structure, in Nitin Nohria and Robert G. Eccles, eds.. Networks and
Organizations: Structure, Form, and Action (Boston: Harvard Business School Press, 1992), 433.
207
theory are:9 1) it recognizes the dynamic impermanence o f global economic

patterns; 2) it suggests the need for a theory which acknowledges the variety o f
forms and processes which are consistent with the logic o f capital accumulation;
3) in term s o f scale o f analysis, it emphasizes the importance o f the national level,
with the world economy theorized as a system o f interacting national social
formations; and 4) it proposes a set o f meso-concepts, such as the regime o f
accumulation and the mode o f regulation. 10
The original intention o f the Regulationists was to grasp how networks o f
institutional forms, during the successive epochs in which they held sway, have
affected the expression o f - o r actually modified - the underlying tendencies or
laws o f capital accumulation as they have been analyzed in the M arxist tradition.11
Their fundamental goal is, therefore, to provide those links through building a
series o f intermediate models to make their theory more historically concrete and
empirically testable, as well as m ore useful for historical interpretation.
This theory holds that capitalism has experienced a sequence o f regimes o f
accumulation, with different modes o f regulation that assure smooth accumulation,
and disjunctures between accumulation and its institutions interfere with
accumulation. In the process o f capitalistic accumulation, technological trajectory
9See Michael Pacione, The Geography o f the Third World: Progress and Prospect
(London/New York: Routledge, 1988), 5.
10,:Regime o f accumulation refers to a systematic and long-term allocation of the
product in such a way as to ensure a certain adequation between transformations of conditions of
production and transformations of conditions of consumption whereas mode of regulation'
refers to institutional forms, procedures and habits which either coerce or persuade private agents
to conform to its schema. Lipietz, op. cit.. 32-33.
The study of capitalist regulation... is the study of the transformation of social
relations as it creates new forms that are both economic and non-economic, that are organized in
structures and themselves reproduce a determinant structure, the mode of reproduction.
Aglietta, op. cit.. 16.
208
provides a set of forces that propels the economy through history, causing it to
outgrow any particular regulatory framework and enter into crisis which entails a
qualitatively different mode of development.
Figure 9 summarizes the basic elements of the Regulationists model in
terms of how the mode of regulation and the regime of accumulation are
interconnected to entail a distinctive mode of development.
FIGURE 9
ELEMENTS OF REGULATIONISTS MODEL
Mode of Regulation
(Networks of institutions
governing the accumulation
process)
- wage/labor relations
- inter-capitalist competition
- monetary/credit relationships
-linkage of domestic firms with
the international economy
Mode of Development
( A distinctive type of
cyclical and self-regulating
crisis)
Regime of Accumulation
(A distinct pattern of
economic evolution which
is stable in time)
-patternof productive
organization
- capital formation
- income distribution
- effective demand
-m odeof production
209
Industrial Organization Perspective: The industrial organization approach

places emphasis on the organizational adaptation of the firm to the changing
competitive environment resulting from technological change.
The basic claim of this approach is that, in the history of industrial
capitalism, the adaptive response on the part of firms within a national economy
has become particularly important while, in another national economy, a new,
more powerful mode of economic coordination has brought a shift in competitive
advantages. Faced by the rise of value-creating economies abroad, institutions financial, educational or organizational - that had served a once-dominant national
economy well in its rise to international economic power remain as obstacles to the
social transformations needed to meet the competitive challenge. The longer these
institutional rigidities persist, the more difficult it becomes to renew the economy's
value-creating capabilities and reverse long-run economic decline.
This approach holds that economic process is a continuous development of
both organizational change and technical change, and they cannot exist in a market
economy without each other. Technical changes cannot be implemented without
any change in design and/or organizational change and that do have consequences
for internal and external organizations. Organizational change is, therefore, given
an equal position to technical change, and emphasis is placed on the aspect of a
dynamic relationship between organizational and technical change. This dynamic
relation between two categories of change is referred to as emulation.12
12 T.C.R. van Someren, Emulation and Organizational Change," in Frederick M.

Scherer and Mark Perlman, Entrepreneurship, Technological Innovation, and Economic
Growth: Studies in the Schumpeterian Tradition (Ann Arbor: The University of Michigan Press,
1992), 206.
210
There are four fundamental relations between organizational and technical

changes as shown in figure 10. The first two refer to the trajectory and technoeconomic paradigm concept, and numbers three and four form an organizational
perspective. Together they converge in emulation.
FIGURE 10
RELATIONS BETWEEN ORGANIZATIONAL AND TECHNICAL CHANGES
1. Technical change
Technical change
2. Technical change
Organizational change
3. Organizational change
Technical change
4. Organizational change
Emulation
Organizational change
Source: T.C.R. van Someren, op. cit. 206
Figure 11 describes the general framework o f the emulation process. It can

be seen that economies o f time related to economies o f scale as well as economies
o f scope are the main features o f emulation made possible by entrepreneurial
initiative, and the final process o f emulation ends up with the creation o f value.
Value-creating thus becomes the major function o f capitalist enterprises. Valuecreating enterprises are those that can produce high-quality products at low unit
costs. Firms that incur fixed costs, but fail to transform them into high-quality
products at low unit cost, w aste existing value rather than create new value. F or a
211
national economy to experience sustained economic growth requires that its firms
be more adept at creating than wasting value.
FIGURE 11
THE GENERAL FRAMEWORK OF THE EMULATION PROCESS
Technological change.
Entrepreneurial
function
Production
function
Value
conversion
economies o f scale
economies o f scope
economies o f time
cost reduction
revenue increase
quality increase
flexibility increase
Organizational change'
Growth cycle:
innovation and
emulation
Source: ibid.. 207
212
The Process of International Diffusion of Technological Innovation and the

Formation of International Industrial Network
The preceding theoretical perspectives place emphasis on the interactive
relationship between technological change and social and economic institutions on
both a national and international level. In these theories, technological change is
recognized as the central moving force behind the growth of the national economy
as well as the global economy, and technological change itself is captured in a
systemic way utilizing such concepts as technological style,
technological
trajectory and technological paradigm.

These theories, however,
do not provide a good explanation for the
process of technological change on a global scale.13
As mentioned earlier,
technological change is made possible through innovation efforts on both a

national and international level. On the national level, the level of technological
capability of a nation is dependent upon the national system o f innovation in terms
of
how efficient and flexible it can adapt to the changing technological
environment.
On the international level, technological innovations are made
possible through interactions among nations. This interactive relationship entails

networks of building blocks and they are recombined and revised continually as the
system adapts.14
13They assume the existence of technological change as a central force of the growth of
a national economy as well as the global economy and proceed their arguments from there. Thus,
while they can neatly explain the effect of technological change on a global scale, these theories
cannot explain how technological changes come about and how each national economy can
position itself in the process of global technological change.
14The dynamic and evolutionary development of the international industrial network is
closely related to the systemic aspect of technological innovation and its diflusion in the global
economy. Technological innovation and its diffusion cluster along the trajectory of a new
technological system gives rise to networks of building blocks in the international industrial
structure. The networks of building blocks are recombined and revised as each national system of
innovation adapts to the new technological system in the interaction process.
213
Therefore, a nations national system o f innovation should be understood

within the context o f the dynamic interactive networks o f national industrial
innovation systems based on different levels o f technological capability and the
resultant technological niches.15
TABLE 55
THE CATEGORIES OF INDUSTRIAL NETWORK
1) Joint venture and Research Corporations
2) JointR&Dagreements
3) Technology exchange agreements
4) Direct investment (minority holdings) motivated by technology factors
5) Licensing and second-sourcing agreements
6) Sub-contracting, production-sharing and supplier networks
7) Research Associations
8) Government-sponsored joint research programs
9) Computerized data banks and value-added networks for technical and scientific interchange
10) Other networks, including informal networks
Source: C. Freeman, op. cit.. 502.
l5Dynamic interaction among national systems of innovation refers to the basic nature
of technical innovation. Despite the importance o f individual creativity and entrepreneurship,
innoration is a fundamental social process built on collective knowledge and cooperative effort. It
flourishes where scientific, technical, and market information is readily exchanged and practical
interaction is frequent; where users readily benefit from advancements made by suppliers, and
suppliers gain from the feedback of users; and where pluralistic patterns of collaboration are the
rule. Learning by interacting is thus complementary to learning by doing and learning by
using. Without adequate interaction, it is hard for people as well as for nations working in
different specialized areas to come up with new or improved products or, more importantly, to
implement good ideas through workable production methods. Bengt-Ake Lundvall, User Producer relationships, national systems of innovation and internationalization, in Dominique
Foray and Christopher Freeman, eds.. Technology and the Wealth of Nations: The Dynamics of
ConstructedAdvantage (London: Pinter Publisher, 1993), 288 et passim.
214
The industrial innovation network has the various forms shown in Table
55. Although these types of networks entail some costs in settling the protocols
between national systems of innovation with different sociocultural codes,
international industrial networks are likely to contribute to taking advantage of a
strategic niche held by each national innovation system according to its position in
the network through active interactions. The fact that a nation can utilize its
national system of innovation in a strategic way vis-a-vis other national systems of
innovation points to the autonomous aspect of a national innovation system.
However, the network position held by each individual national system is
constantly being reformed and changed through the interaction processes, and it is
also constrained by the international
industrial network structure in which
interactions among national systems of innovation take place.

Accordingly, a nations strategic niche within a
national system of
innovation is dependent upon the historical role it has played in the shifting
international industrial networks. The continuous reformations and shifts in the
network positions among national innovation systems and the resultant changes in
the structures of international industrial networks are made possible due to the
impact of technical change and its difiiision on the relative importance of spatial,
cultural and organizational distance between international users and producers
involved in interactive learning and innovation.16
l6ibid.
215
The General Characteristics of the International Industrial Network

Since World War II
This subsection deals with the general characteristics of international
industrial networks since World War II. The conceptual framework introduced in
the previous section is applied as follows: First, the institutional development of
the capitalist world economy since World War II will be explained based on the
three theoretical interpretations; Then,
interactions of
the general features of international
national systems of innovation from the perspective of
the
international industrial network are evaluated.

The Theoretical Interpretations on the Institutional Development of the Capitalist
World Economy Since World War II
The Technological Style of Fordism and the Organizational Pattern of
Taylorism: From the perspectives of long-wave theorists, the economic history of
capitalism has shown the appearance of growth followed by a crisis, constituting
Kontratiev long waves of about forty to fifty years duration. There have been four
Kontratiev long waves in the history of Western capitalism. The appearance of a
new key factor
and the technological style that takes shape around its
characteristics are phenomena that occur near the peak and during the downswing
of the previous Kontratiev and that the transformations they generate in the
productive sphere through their gradual diffusion will demand complementary
innovations in the social and institutional spheres in order to give way to a new
long-wave upswing.17
17There have been many historical discussions as to the periods of upswing and
downswing of the Kontratiev waves. Mandel (1981), for example, dates the Kontratiev upswing
as follows: 1st Kontratiev upswing (1793-1825), 2nd Kontratiev upswing (1848-1873), 3rd
Kontratiev upswing (1894-1913), and 4th Kontratiev peak (1940/45-1966); and the Kontratiev
downswings are as follows: 1st Kontratiev downswing (1825-1848), 2nd Kontratiev downswing
(1873-1894), 3rd Kontratiev downswing (1913-1940/45), and 4th Kontratiev downswing (1966-).
216
The period after World War II through the 1960s, therefore, constitutes the
Fourth Kontratiev upswing which was characterized by the technological style of
mass production of assembly line type (Fordism) and the organizational pattern of
Taylorism.18 The fourth Kontratiev upswing was a period in which there was a
good match between the requirements of a mass production technological style,
based on the almost universal availability of cheap oil, and at the same time this
technological style could flourish within the social and institutional framework.
The United
States became the world center of
the new mode of
development.19 Among the main institutional changes which promoted this good
match particularly in the United States was, on the national level, the expanded
role of the state in economic life. The Keynesian policies which were adopted by
most countries led to various demand management mechanisms, both directly
through infrastructural, defense and public service spending, and indirectly through
income redistribution by means of taxation, interest rate management and massive
government employment. Another important socio-institutional change was the
See Mandel, Ernest, Explaining Long Waves of Capitalist Development.' Futures (August
1981), 332-338.
^Frederick Winslow Taylor transformed the productive organization at the Bethlehem
Steel yards at the turn of the centuiy. This event is considered to be introduction of a social and
institutional innovation within the productive sphere. The new scientific techniques yielded
equivalent cost-cutting results when applied to everything from bricklaying to ball-bearing
quality inspection and to machine-shop work. The profound effect occurred with the diflusion of
Ford's assembly-line style, combined with the internal combustion engine and low-cost oil.
Carlota Perez, op. cit., 33.
lÎn the 1910s and 1920s the technological style that shaped the fourth Kontratiev was
already emerging and diffusing. Both massive oil production and assembly-line technology were
US-based, and the fastest rates of growth in electricity production and in radio and car sales took
place in the USA The greater weight of the old style and the divided markets of Europe seemed
to inhibit the achievement of the full potential for mass production of identical units inherent in
the new style. The USA had all the conditions for proceeding unhampered to become the world
center of the new mode of development ibid., 43-4.
217
rapid expansion of massive secondary and higher education to meet the demand for
white-collar, technical and clerical employees, together with the expansion of
various national forms of public health systems. On the international level, the
Bretton Wood Agreement established a solid basis for the regulation of
international trade and investment (recognizing the hegemony of the USA in the
new arrangement) while the Marshall Plan stimulated general international growth
of investment and markets.
From the early 1970s, however, the Fourth Kontratiev technological style
of Fordism began to show its limitation in providing new product and process
investment opportunities due to the emergence of a new technological style and
the resultant social and institutional mismatch.20
Thus, the downswing phase of the Fourth Kontratiev wave brought about
the end of an era characterized by the USAs technological advantage and fast
rates of imitation by other OECD countries and a few NICs.
Intensive Mode o f Accumulation and the Monopoly Regime of Regulation:
In their attempts to investigate the various historical phases of capitalist develop
ment, Regulation theorists have specified two regimes of accumulation: the
extensive and the intensive, and two modes of regulation: the competitive and the
monopoly.21
20Many long-wave theorists believe that the technological style of the Fifth Kontratiev
will be based on micro-electronics, the major characteristics of which will be batch production
and the general flexibility introduced by computer-aided design and manufacturing. This new
technological style has a strong transnational dimension, based on the provision of
unprecedented data-management capabilities and a telecommunications infrastructure for the
efficient management of giant, complex, flexible transnational conglomerates which optimize
factor use and maximize long-term profits on a planetary scale, ibid., 45.
Under the extensive regime of accumulation, growth takes place predominantly on the
basis of artisanal productive techniques via the application of methods to lengthen working hours
and intensify labor, as well as to expand the size of the labor force. Productivity is limited, as is
the potential for mass consumption. On the other hand, under the intensive regime, growth takes
218
On the basis of this typology, the Regulationists have identified three

successive modes of development in the economic history of Western capitalism
over the last century and a half, each representing a distinctive combination of one
of the foregoing modes of regulation and one of the foregoing regimes of
accumulation.22
According to the interpretation of Regulationists, therefore, the period
after the World War II through the 1970s represents the culmination of the new
mode of development called Fordist which was characterized by an intensive
mode of accumulation and the monopoly regime of regulation. This period is
also characterized by the technological dominance of the United States.
place predominantly via investment in fixed capital embodying technical advancement which
creates a potential for regular increases both in productivity and in mass consumption. Under the
competitive mode of regulation, there is craft control and the competitive determination of prices
and especially of wages while, under the monopoly mode of regulation, there is scientific
management, an oligopolistic system of pricing, and, most characteristically, the determination
of wages through a complex system of capital - labor and governmental institutions - the social
regulation of the mode of consumption. For details, refer to Robert Brenner and Mark Glick,
"The Regulation School and the Wests Economic Impasse. New Left Review 188 (July/August
1991).
^F irst, throughout most of the nineteenth century, a competitive mode of regulation
prevailed which had imposed an extensive regime of accumulation. Second, under the pressure
of class struggle and technical change, there arose at various historical junctures - from the first
decade of the twentieth century' in the United States - a new mode of development. Here, craft
control was sufficiently weakened and inter-firm competition sufficiently controlled to allow for
the emergence of intensive accumulation. However, this mode of development turned out to be
unstable because the mode of regulation, still essentially competitive, was unable to
institutionalize the expanding mass consumption that was required to underpin the expanding
mass production made possible by intensive accumulation. The result was a severe structural
crisis - conceived as a crisis of overinvestment and underconsumption - of the interwar period,
leading to the depression of the 1930s. Third, especially as a consequence of class struggle in the
1930s, there emerged a new mode of regulation which finally made possible inhibited and
intensive accumulation and an unprecedented successful period of capitalist development This
monopoly mode of regulation resolved the contradictions of the previous mode of development by
providing for the rise of mass consumption and thereby constituted the foundation for a new
mode of development called Fordist. Ibid.. 49-50.
219
However, the historical repetition of the very processes that had

underwritten prosperity eventually proved problematic, as the progressive
perfection of the Fordist labor process resulted in the exhaustion of the systems
capacity for developing productive forces and for underwriting the steady growth
of productivity. The upshot was a structural crisis within the Fordist mode of
development which had been a contributing factor to the technological dominance
by the United States.23
The period since the middle of 1960s has witnessed a dramatic closing of
the economic and technological gap among the major industrial powers.24 From
the 1960s to the 1970s, most of the Third World experienced rapid growth in
industrial output and this growth was especially fast among a subset of developed
23According to Aglietta, the crisis of Fordism is a crisis of the mode of labor

organization, expressing the limits to the increase in the rate of surplus-value that were
inherent in the relations of production organized in this type of labor process. Fordism as a
paradigm for organizing the labor process could henceforth deliver only declining productivity
growth because, over the long term, management exhausted the gains that could be secured from
an intensification of labor through Taylorist time-and-motion studies, job fragmentation,
shopfloor reorganization and the introduction of new machinery on the basis of existing
technology. Meanwhile, workers found themselves poorly skilled and alienated to the point that
they could no longer deliver on-the-line technical innovations crucial to the growth of
productiveness. As a result: The development of the department producing means of production
encounters a constraint, since it no longer gives rise to technical mutations leading to a further
mechanization of labor, capable of generating a sufficient saving in direct labor time to
compensate for the increase in the organic composition of capital. Aglietta. op. cit.. 99-100. and
162.
24 This broad convergence can be contributed to the following factors: 1) the free flow
of world trade eroded the market-size advantage US-based firms used to have; 2) technology
became much more generally accessible to those willing to make the required investments and
with the requisite skills; hence, technology became greatly accessible to firms and national
boundaries than had been the case earlier, 3) the other major industrial powers significantly
increased the proportion of their science and engineering work forces, and the proportion of their
GNPs allocated to research and development, thus establishing strong indigenous competence
both to exploit the now easier access to technology' as well as to create new technology, and 4)
there was a sharp decline in the importance of spillover from military R&D into civilian
technology. Robert Brenner and Mark Glick, op cit.. 96-7.
220
countries that are often called Newly Industrializing Countries(NICs). Since the
1980s, economic recession in the Western advanced countries has afflicted the
economies of most NICs as well as the Third World in general. Yet, a group of
so-called Asian NICs- Korea, Taiwan, Singapore and Hong Kong- have continued
to grow very rapidly despite the general recession in the world economy. The
Regulationists understand this developmental episode of Asian NICs from the
perspective of global Fordism and such development is labeled as peripheral
Fordism.25
Managerial Capitalism With Planned Coordination:
According to
industrial organization theorists, the continuous development of both technological

change and organizational change in the capitalist world economy from the late
nineteenth century to the present has given rise to
three different forms of
capitalism in a progressive manner- proprietary capitalism, managerial capitalism

and collective capitalism. Each form of
capitalism is based on a different
institutional basis.26
25In the 1970s, a new pattern emerged in certain countries. It was characterized by the
existence of autonomous local capital, the presence of a sizable middle class, and the growth of a
skilled working class. In some cases, its origins lay in an earlier import-substitution policy or in a
peripheral form of merchant capitalism (China in East Asia). In other cases, it emerged from the
miraculous promotion of exports of raw materials such as oil or from an earlier stage of
primitive Taylorization. This conjuncture allowed certain states to develop a new logic which
we will refer to as peripheral Fordism. Alain Lipietz, op. cit., 4-5.
261) proprietary capitalism: this form of capitalism appeared in the late nineteenth
century in Britain and its mode of economic coordination was characterized as market
coordination. The institutional basis for market coordination was the proprietary firm-an
enterprise owned and managed by family members and a closed partnership for their own benefit
Constrained by limited managerial and financial resources, the proprietary firm tended to be a
single-plant operation that specialized in a narrow range of activities. It therefore had to place
221
Therefore, through the interpretation of industrial organization theorists,

the period of after world war II until the 1970s can be characterized as the period
of managerial capitalism with the institutional basis of planned coordination, and
this form of capitalism was flourished in the United States.27
extensive reliance upon market relations to supply its various inputs as well as to distribute its
products. The state maintained internal law and order, undertook essential welfare programs,
provided elementary education, and ensured the defense of the realm. But in matters of the co
ordination of economic activity, industry was left to react to the unregulated forces of supply and
demand; 2) managerial capitalism: In the passing of economic leadership from Britain to the
United States, the institutional character of capitalism changed dramatically. In contrast to the
small vertically specialized proprietary firms that had characterized Britain's rise to economic
dominance, US competitive advantage came from managerial enterprises that operated a number
of geographically dispersed plants and offices and that integrated a number of vertically
specialized activities. Initially, the expansion of these managerial enterprises was solely on the
basis of internally generated funds. In addition to finance, the growth of these managerial
enterprises created a need for large numbers of qualified personnel. In response, large-scale
infusions of business and public funding transformed the educational system to meet the demand
for organizational men. Besides its critical role in the expansion of higher education, the US
government stood ready to provide tariff protection to industry. But it was the rise of planned co
ordination within, by, and for the private-sector economy that marked the rise of US managerial
capitalism; 3) collective capitalism: The recent emergence of Japanese economic power does not
signal a reversion to proprietary capitalism, despite the number and importance of proprietary
firms in the present-day Japanese economy. The vast majority of proprietary firms in Japan are
integral elements of a network of enterprises, each group dominated by powerful industrial and
financial firms. The basis of Japanese economic success over the past decades has been a more
far-reaching elaboration of the institutions of managerial capitalism that underlay US
international competitive advantage in the first six decades of this century. Through Japans
enterprise group system, planned co-ordination extends across legally distinct firms to ensure that
their various activities coalesce in the pursuit of commons goals. Within dominant Japanese
firms, planned co-ordination extends further down the organizational hierarchy to include male
blue-collar workers, giving these organizations much more control over shop-floor activities than
their US counterparts. T.C.R. van Someren, op. cit.
27Using managerial structures to plan and coordinate mechanized production processes
and to apply scientific knowledge to industry, US corporations had by the 1920s generated a
Second Industrial Revolution. Proprietaiy capitalism proved inadequate to deal with the
technological complexities and the high fixed costs of the new industrial era. In the first half of
the nineteenth century, a scarcity of skilled labor available to capitalist firms induced the
development of skill-displacing technologies in the United States. In a sparsely populated country
having a rudimentary transportation system, a manufacturing enterprise had to organize more
activities internally to supply inputs and sell outputs. The reliance on mechanized technologies
tended by unskilled labor along with a high degree of vertical integration necessitated investment
in, and the development o f managerial organization to transform high fixed costs into low unit
costs. Combined investments in technology and organization resulted in the emergence of
innovative firms, giving rise to what came to be known as the 'American system of
manufactures.' ibid.
222
From the 1940s to the 1960s, union-management cooperation in the

coordination of shop-floor relations permitted high enough levels of throughput to
sustain a competitive advantage, despite the failure of dominant mass producers to
address the issue of unskilled, monotonous, and hence alienating work.
But, just as the structures of cooperative labor-management relations that
served British employers well in the nineteenth century were to become barriers to
organizational transformation in the twentieth century, so too would the labormanagement relations, that prevailed in the era of US economic dominance, prove
problematic when US competitive advantage could no longer be sustained.28
General Characteristics of the International Industrial Network Since WWII
In the preceding section, we have reviewed three theoretical interpretations
of the institutional characteristics of the global economy since the post-World War
II period. Despite differences in their emphases, their interpretations are based on
a common theoretical ground that global economic growth is dynamic in nature
where technological change in the form of a new technological style (or paradigm)
plays the central role in both the reformation of industrial relationships among
nations and the shift of technological hegemony within the world economy.
Invention and innovation, either technological or institutional, are ongoing
processes in a dynamic world economy and there always exist many opportunities
for shifting, halting, or reversing the role and position of a nation or a group of
nations in international industrial activities. In this dynamic scheme, the partial or
2%ince the 1970s, Japanese manufacturing has outperformed US manufacturing in the

mass production of consumer durables, and particularly in motor-cars and electronic equipment.
These are the industries in which the US had its greatest international competitive advantage in
the first six decades of this century. Japanese manufacturing has also made great progress in
vertically related capital goods: steel, machine tools, and semiconductors, ibid.
223
overall adjustments of the international industrial relationship result from a

network of interactions between nations participating in the scheme as partners.29
However, this interactive relationship among international industrial
network is not formed on equal terms between partners as is assumed in neo
classical economics. Rather, a domination effect30 prevails in the relationship. A
country (or a group of
countries) holding the
dominant
position in the
international industrial network is a relatively autonomous center of development

exerting influence on whole groups of other countries.
In these contexts, the main features of the post WWII international
industrial network can be characterized as having evolved through two distinct
phases: the period from the end of World War II through the 1960s constituted the
first phase in which the United States had held the dominant position in world
technological leadership; and the second phase began from the 1970s in which US
dominance had been gradually weakening before it was replaced with a group of
dominant players composed of the United States, Japan and several Western
European countries.
US Dominance in the International Industrial Network: From the end of
world war II through the 1960s, the international industrial network was centered
around the dominance of the United States while other nations were heavily
dependent upon the United States in terms of technology transfer and market
29Not all countries can or do participate in this scheme. Participation as partners
involves not only economic factors but also international politics. The important point, however,
is that to become a member of a network it is essential for a country to carve out a distinct niche
in its national system of innovation.
30Competition is not a regime which leaves out economic domination, but one where
the domination effect is kept in check, directed, and utilized, with the object of achieving better
economic results. Francois Perroux. The Domination Effect and Modem Economic Theory,
Social Research Vol.. 17 (1950), 206.
224
access. The mass production of assembly line type (Fordist) had become the
mainstay of industrial production, especially among oligopolistic enterprises, while
industrial management was based on planned coordination. Furthermore, Post-war
reindustrialization of both Western Europe and Japan and the stabilization of
world trade, prices, and wages resulting from Bretton Woods System contributed
to the rapid expansion o f global industrial activities.
During the post-war years from 1945 to 1966, the internationalization of
capital was completed, beginning with the export of capital through foreign direct
investments in local markets, both in industrialized and non-industrialized
countries.31 Multinational corporations, mostly from the United States were the
major exporters of machinery to expanding industries and they were also major
importers of raw materials from increasing world markets.
In the 1960s, multinational corporations realized that free trade meant
access not just to consumer markets but also to vast labor markets. Led by the
electronics and apparel industries, these multinational corporations set up laborintensive facilities in Asia, in the Caribbean, and in Mexico. In most cases the shift
to new, globally oriented plants enabled corporations to weaken the grip of labor
unions and cut wage costs while increasing managerial control over labor.
As the globalization of production hollowed out the manufacturing base of
many economically advanced countries, it was also transforming many less
developed countries. In a handful of Asian and Latin American nations, the
foreign investment binge that was a central part of globalization gave birth to
modem, export-oriented industrial sectors.
31 The United States pushed the opening of the global economy after World War I with
GATT as one of the centerpieces of its efforts. As the dominant force in the capitalist world the
United States was largely able to succeed. Negotiations under GATT resulted in a steady
lowering of trade barriers, and US manufacturers saw a widening global market for their goods.
225
East Asian countries linked their economies to international markets and

leveraged foreign investment into economic growth, trade surpluses, and rising
wages. In these cases, strong central governments repressed organized labor,
adopted stable pro-business foreign investment policies, provided low-cost but
well-trained work forces, and carved out distinct economic niches for themselves
through national development strategies.
Triangular Relationship in the International Industrial Network: Since the
mid-1970s (4th Kontratiev downswing period), the international industrial network
has been undergoing a major realignment.
The US dominance in technological
leadership had gradually been chipped away by other industrialized countries and
from the 1970s the international industrial network had become dominated by a
Triad of economic blocs composed of the United States, EC (led by Germany)),
and Japan. Since then, the triad has been dominating foreign direct investment and
international trade. Together they account for 75 per cent of world output and
trade, and their companies account for about 80 per cent of global production. For
example, in 1990 the triad countries conducted a total of $417 billion of trade
among themselves as shown in Figure 12.
Each of these blocs has its own geographical hinterland, in and between
which there exists strong trade and investment relationships. These hinterlands
probably account for another 10-12 per cent of world output. Figure 13 shows the
foreign direct investment clusters.
In recent years, a major portion of foreign direct investment in developing
countries has been made by the triad members. Typically, recipients of these funds
are part of an FDI cluster, which is a group of countries usually located in the
226
same geographic region as a triad member and having some type of economic link
to the latter.
FIGURE 12
GLOBAL FLOWS OF TRADE IN THE TRIAD, 1990
(Exports; U.S. dollars in billions)
United States
48.6
96.5
98.1
91.1
54.1
Japan
EC
28.7
Source: Richard M. Hoogetts and Fred Luthans. International Management (New York:
McGraw Hill, Inc.. 1994), 37 (Figure 2-1).
227
FIGURE 13
FOREIGN DIRECT INVESTMENT CLUSTERS
American Cluster
Argentina
Bolivia
Chile
Colombia
Mexico
Panama
Venezuela
Philippines
Saudi Arabia
UNITED
STATES
TRIAD
EUROPEAN
COMMUNITY
JAPAN
M 'l
EC Cluster
Czechoslovakia
Yugoslavia
Poland
Japanese Cluster
Russia
Hungary
Brazil
South Korea
Hong Kong
Thailand
Source: ibid., 38 ( Figure 2-2).
228
The emergence of triad players in the international technological leadership

reflects the fact that a new technological style has begun to play a central role
within the international technological innovation system in which firms and nations
are increasingly engaging in a network of cross-border relationships. These
relationships are sometimes with competitors, sometimes with suppliers, and
sometimes with customers. The form of these relationships ranges along a
spectrum from outright ownership to the most informal agreement between the
transacting parties, for one or other, or both, to undertake certain kinds of valueadded activities. One of the main characteristics of these cross-border networks is
the creation, diffusion and commercialization of technological innovations. By
cooperating with foreign partners, firms may benefit from risk-sharing and the
pooling of assets, based on their respective ownership specific advantages, and on
the competitive advantages of the nations in which they operate.
The world's leading MNEs are operating in an intricate global web of
formal or informal coalitions, most of which are in the advanced industrial
countries. These developments induce the formation of oligopolistic galaxies with
the worlds major producers at the hub of the galaxies. At the same time, smaller
companies are becoming more involved in strategic alliances, particularly with
their larger customers.32
32John H. Dunning. The Globalization o f Business: The Challenge o f the 1990s

(London and New York: Routledge. 1993), 190-241.
229
The Positional Characteristics of the Korean National Innovation System

Within the International Innovation Network
From the perspective of a network, we have proposed that a nation can
take advantage of its strategic niche within a national system of innovation
according to its historical role and position within the international networks of
industrial innovation. This section is mainly concerned with the positional charac
teristics of the Korean national system of innovation within the context of
international industrial networks. First, we will investigate the political economy
of Korea's technological trajectories33 before and after the 1960s. Then, we will
evaluate the positional characteristics of the Korean national system of innovation
from empirical standpoint. Given that the efficiency of the national system of
industrial innovation can best be reflected in the national trade structure of the
manufacturing sector, the trade specialization index (TSI) and intra-industry trade
index (IITI) will be used to evaluate Koreas position in the international industrial
networks. This will enable us to ascertain the industrial relationships Korea has
with the United States, Japan and other Asian countries in terms of how they are
interconnected with the Korean national innovation system.
33The technological trajectories that have been traversed in the past leave a profound
imprint upon the present, and that they do so in a variety of ways. They serve to define
technological possibilities by facilitating further progress in some directions but not on others.
On the other hand, the occurrence of major new scientific breakthroughs in effect opens up
entirely new technological territories for exploration, thus liberating the economy from the
constraints of the past Salvatore Biasco et al., eds.. Market and Institutions fo r Economic
Development: Essays in Honor o f Paulo Sylos Labini (New York: Saint Martin's Press. 1993).
146-152.
230
The Political Economy of Koreas Technological Trajectories

Before and After the 1960s
Technological Trajectories Antecedent to the 1960s34
Most scholars interested in the economic growth of Korea tend to agree
that industrialization in Korea began in the early 1960s when the military
government initiated the First Five-Year Economic Development Plan. However,
considering that the implementation of industrialization requires the existence of
an industrial base and an adequate level of technological capability,
Korean
industrialization can not be fully understood without giving due attention to the
technological trajectories Korea had trodden in before the 1960s.
Formation of Social Infrastructure as a Colonial Heritage: When the
Korean peninsular became part of the Japanese empire through annexation in
1910, Japans basic aim was to structure Korean economic expansion to meet the
overall needs of the Japanese economy. In the beginning, the Japanese tried to
develop the Korean economy as a major source of food for Japan and as a market
for Japanese manufactured products. Thus from annexation through the 1920s, the
Japanese made a major effort to raise agricultural productivity, especially in the
production of rice, by transferring Japanese technology to increase productivity
per unit of land in Korea.
During the early period of colonization, Koreas industrial output was
based on agricultural production, while in the later years of colonization
manufacturing began to play a greater role in industry as Table 56 indicates. This
restructuring reflects Japanese colonial economic policy. At first, the colonial
34Most of this part was adapted from Lee-Jay Cho and Yoon Hyung Kim, Eds.
Economic Development in the Republic o f Korea: A Policv Perspective (Hawaii: East-West
Center, 1991), 3-13.
231
government directed capital formation into the primary sector to supply rice and
materials to Japan. But in later years, Japan used Korea as a manufacturing base to
support Japans militarism. Consequently, the manufacturing share industry
increased rapidly to 19.2% from 1938 to 1940.
TABLE 56
KOREAS INDUSTRIAL STRUCTURE, 1910-1940 a
Sector
1910-12
1919-21
1929-31
1938-40
88.1
86.1
75.9
59.2
Forest
5.7
3.3
6.7
7.5
Fishery
2.1
3.3
5.7
6.9
Mining
1.2
1.2
1.6
7.2
Manufacturing
2.9
6.1
10.1
19.2
Agriculture
Sources: Kwang-suk Kim and Michael Roemer, Growth and Structural Transformation ( Seoul:
Korea Development Institute, 1979), 25.
unit: percentage
As the Japanese developed the industrial sector in Korea, ownership in this

sector became almost wholly Japanese with Japanese immigrants managing most of
the industrial sector. Business ownership as shown in Table 57, was concentrated
among Japanese. Korean-owned firms amounted to 2,278, or 42.1% of all firms in
the peninsular. Korean ownership of capital accounted for 11.2%, the remaining
89.8% of capital belonged to the Japanese. Land ownership also followed a highly
unbalanced trend, and most Korean farmers rented land at high costs.
232
The availability of mineral resources, the potential of hydroelectric power,

and cheap-labor were seen as advantages for developing industries in Korea to
sustain both Japanese society and Japanese forces in Manchuria. In addition,
quality of Koreas labor force was almost comparable to that of Japan, while part
of the work force spoke Japanese and had received a Japanese-style education.
TABLE 57
BUSINESS OWNERSHIP BY KOREANS: 1939
Sectors
Agriculture
Fishery
Mining
Manufacturing
Electric Power
Transportation
Finance & Banking
Commerce
Others
Total
Number of
Companies
265
96
150
1.544
16
532
175
1.896
739
5,413
Korean Ownership
Number Percent
86
32.5%
27
28.1
29
19.3
740
47.9
0
0.0
258
48.5
98
56.0
846
44.6
194
26.3
2.278
42.1%
Korean
Capital
20.7%
6.3
6.8
12.3
0.0
6.9
11.8
26.2
28.7
11.2%
Source: ibid., 31
After 1932, when a Japanese-controlled government was established in

Manchuria, Korea gained a greater geo-strategic importance resulting in the
extended development of industries in Korea, which in turn enabled continued
Japanese expansion into East Asia.35
35After annexation, Japan had planned not only to make Korea a permanent territory of
Japan, but also to use the peninsula as a base for further territorial expansion. The vast
northeastern part of China (Manchuria) offered an enticing abundance o f natural resources that
Japan lacked. Its coal reserves were almost comparable to those of the United States; it also had
233
Thus, from the early 1930s to 1941, the initial emphasis on rice production
was replaced by the promotion of large-scale industries.36 Because of this shift in
industrial policy, manufacturing sector grew faster than the agricultural sector in
the late 1930s. The rapid growth of the Korean industrial sector was an outcome
of Japanese capital investment. It was imposed on Koreans from the outside and
was not integrated into the traditional sectors of the Korean economy. A linkage
effect, in which the traditional and modem sectors grow simultaneously while
complementing and benefiting each other, did not take place in Korea. Some
sectors of the Korean economy thus remained relatively backward, while others
sectors became as advanced as their counterparts in Japan.
The Japanese favored capital-intensive development in certain military
industries and introduced the latest technology. The productivity gap also became
wider: agricultural workers became progressively less productive compared with
those in manufacturing.37 The Japanese reasoned that such unbalanced dualistic
growth in the Korean economy could exist as long as growth met the needs of the
Japanese economy.
Economic and Technological Legacy of Japanese Colonialism:
In terms
of technical and economic development, the 36 years of Japanese occupation were
other important mineral resources, petroleum, and forests. In 1932 Japan established a puppet
state in Manchuria that was administered, for all political and economic purposes, by the
Japanese imperial government. Japan could be best provisioned with the products of this
resource-rich territory by way of the Korean peninsula, and this link soon became known as the
lifeline of the great Japanese empire.
36This shift was primarily to meet the growing need of war material as Japans military
forces expanded: first, with the creation of a new state in Manchuria, followed by the occupation
of major coastal cities in China in 1937, then, the extension of Japanese power into Vietnam in
1940, and finally, the Japanese campaigns throughout Southeast Asia at the end of 1941.
37Productivity was nearly equal in 1920, when real agricultural productivity per worker
was 91 % that of manufacturing; by 1940 the ratio had fallen to a mere 24 %.
234
not entirely disadvantageous to Korea. In carrying out its imperialistic expansion,

Japanese provided the Korean peninsula with substantial infrastructures, including:
- a railway traversing the peninsula from Pusan to Seoul and Shinyiju, a
strategic link running through the peninsula to major towns in Manchuria
- major investments in secondary railway lines, roads linking major cities
throughout the peninsula, and major harbor facilities at Pusan and Incheon to
facilitate merchandise trade between Korean and Japan
- a modem communications system, including telephone and telegraphic
networks
- a European-style Japanese educational system in which, however, the
medium of education was strictly the Japanese language
- Keijo Imperial University, which later became Seoul National University
- medical studies and modem medicine
- modernization of the mining industry
- modernization of agriculture
- centralized administrative structure
Under Japanese rule, Koreans did gain some social and economic benefits,
even if confined to only some segments of society, which later contributed to
Koreas economic growth. These benefits include: technical education, acquisition
of new skills and technical know-how, experience in working with entrepreneurs
and in large-scale industries, and changing habits of consumption.
Despite the colonial policy of exploiting Koreas natural and human
resources, and exporting manufactured and agricultural products to help meet the
needs of Japan, despite the relative backwardness of the traditional sector ( as
235
opposed to the large-scale, Japanese-led industrial sector), and despite the fact that
Koreans could not play a leadership role in either the agricultural
or the
manufacturing sector, they were nonetheless molded into a development scheme

for higher agricultural and industrial productivity. High-yielding varieties of rice
were introduced, not for the benefit of Koreans but as a secure source of supply
for Japan. To accelerate this plan, the Japanese built agricultural training centers
and agricultural high schools throughout the peninsula.
When the Japanese left Korea in 1945, they could not take their factories
and businesses with them, and they also left behind the people who had managed
their ventures. Their Korean assistants, who had never before played an executive
role, had acquired enough skills and knowledge from technology transfer to
assume control immediately. In addition, they did not have to start building these
sectors all over again.
There was a transmigration of several million Japanese from Japan to the
Korean peninsula. Likewise, there were large numbers of Koreans who migrated
to Japan providing cheap labor for the construction of roads, munitions works, and
textile plants. Koreans also migrated to Manchuria for frontier development,
particularly in agriculture and mining. At first, Koreans were compelled to migrate.
Later, because of Japanese agricultural and land policies in Korea, many farmers
and other Koreans felt that they could make a better living in Japan or Manchuria,
and therefore they migrated voluntarily.
Japanese culture was forced on the Korean character mostly through the
Japanese system of universal primary education. By 1945 the Japanese-style school
system had already permeated Korean education, not least because it was Korea's
initial experience with universal education.
236
After Japans departure, Koreans on the Southern half of the peninsula

were still able to employ the Japanese legacy of skills and technology. Although
Korean mangers had never been trained to perform by themselves without
Japanese supervision, those with working knowledge of a business or factory were
quick to master the operational know-how of
a former Japanese colonial
enterprise. South Koreas greatest resource was its people. It initially had the
larger share of the divided countrys population. It also gained about two million
emigrants from the North during the Korean War, many of whom had achieved
high levels o f education and economic status, further increasing the quality of
human resources. The post-war return of Koreans from Japan and Manchuria
likewise brought valuable skills to South Korea.
Because Korea had long been part of the Japanese economic system,
Koreans were able to acquire postwar technological innovations from Japan, take
advantage of Japanese methods of conducting business, trade, and manufacturing,
and learn the Japanese way o f thinking, which in the later year would be wisely
utilized by Koreans.38
National Liberation and the US Influence On Economic and Technological
Structures in Korea: The elements for launching postwar economic development
were all still in place at the end of World War II: the benefits of physical plants,
the Korean experience in the modem sectors of the economy, the education
38These types of interchanges were not possible for many of the Asian countries, such as
Indonesia and the Philippines, that had briefly been under the Japanese imperial system. Added
to this was the ever-presence of US technology and interchange that would later contribute to
Korean economic development Although Koreans had no say in or control over the economic,
educational, and other policies imposed on them for 36 years, the experience gained under the
Japanese and the economic infrastructure forced on Korea contributed in numerous ways to
subsequent Korean economic growth.
237
system, and technology gained from Japan. Also, fairly rapid urbanization had
taken place during the later colonial period.39
Economic and political change that occurred from 1945 to 1954 was a
major upheaval for the Korean people. Japans departure from Korea in 1945 with
the Americans assuming a guardian role also saw the beginning of East-West
hostilities: the Soviet Union and North Korea faced the United States of America
and South Korea across the 38th parallel.
From 1947 to 1950, South Korea initiated under American guidance land
reform and Japanese vested properties were distributed. Land reform was regarded
as a political success.40
During the period 1945 to 1950 the US Military Government in Korea
(USAMGIK) also introduced educational reform through the reorganization and
democratization o f the Korean educational system.
The Americans broadened
educational opportunities for all Koreans, emphasizing Korean-ness and

standardized the newly-organized educational structure41 In many ways, the
educational reforms of the 1940s had the most profound long-term effects on
South Korean development.
39By around 1940 about 20 per cent of the population was urban. Thus Korea had a
relatively large urban workforce, much of which had received at least primary Japanese-style
education.
40From 1945 to 1950 American influence was more concerned with overt cold-war
tensions than with the economic development of South Korea per se. North and South Korea had
been a major supplier of rice to Japan, exporting some 50 million bushels a year. With the
country divided and the North having the basic nascent industrial infrastructure and power
supplies, it was first considered that South Korea could become a major agricultural supplier.
Heavy industry, mining and most power resources were in the North; South Korea had light
manufactures, chiefly cotton textiles and the larger share of arable land.
41Korean education had been dominated by the Japanese Imperial Prescript on
Education; Koreans were not allowed to study their own language and they even had to adopt
Japanese surnames. Korean education was further influenced by Confucian traditions which
characterized the student as a passive receptacle for the teachers wisdom.
238
Formation o f A Technological Base Through Foreign Aid During the First
and Second Republics:
Syngman Rhee helped lay the political foundations of a
independent, modem country and some of the groundwork for later rapid
economic development. Although the idea of land reform came from the United
States, the program was pursued by the Korean government, partly out of political
necessity in view of land reform taking place in the North.
President Rhee
identified land reform as a right that was justly due to the peasantry and protected
it from political reactionaries. The program also coincided with the presidents
intention to cripple his political opposition, which was backed by the landlord
class.42
The subsequent growth process was made easier by the massive influx of
foreign capital during this critical period of development. Foreign capital held the
country together and prevented massive starvation and economic dislocation.
Assistance from all sources to Korea during the 1945-75 period is estimated at
over US$23 billion.43 Much of this was in the form of grants or concessions.
About one-third of the total was military assistance, much of which was given
during and just after the Korean War. By expediting postwar reconstruction and
42Refonn brought about a more equitable distribution of assets and income in at least
two ways: First, poor fanners received a share of the assets formerly exploited by the Japanese
and the landlord class. Second, landowners were partly compensated in the form of government
bonds. The rapid decline in the value of these bonds due to inflation contributed to the
redistribution of income.
43Taking the 1945-75 period as a whole, foreign loans and aid to the South Korean
economy amounted to $7.8 billion in foreign loans and $16 billion in grant aid, a total of $23.8
billion in foreign sources. South Korea had twice as much foreign grant aid than foreign loans
during the 1945-59 period, with foreign loans gradually obtaining greater importance after 1959.
While the $23.8 billion did not go entirely to investment, an increasing proportion did. Johan
Cathie, Food A id and. Industrialization: The Development o f the South Korean Economy
(Brookfield, VA: Avebury, 1989), 90 et passim.
239
the recovery of the economy, such foreign aid contributed to laying the
foundations for development during the 1960s.
Technological Trajectories in Korea After the 1960s
Five-Year Economic Development Plan: When the military took over
political power in 1961, national priority was placed on economic development.
The national economy at that time was poorly endowed with conditions needed for
economic development in every aspect: capital was scarce; the domestic savings
rate was extremely low; foreign aid was rapidly declining, both in quantity and
variety; business enjoyed little public confidence; and entrepreneurial talent was
deficient.
Under these circumstances, the military government asserted its leadership
by setting the stage to formulate policies for national development. During the
1961-63 period, the military government established an institutional framework for
industrial development.
The Economic Planning Board (EPB) was established in July, 1961 as the
government organization responsible for economic development planning and
policy making. The First Five-Year Economic Development Plan (1962-66) was
formulated by the EPB. To implement it, the government embarked on investment
planning. The major issue was how to finance major industrial investment projects.
Under the conditions prevailing in the early 1960s - an extremely low domestic
savings rate, the absence of healthy financial and capital markets, and the decline of
foreign aid - the military government had to devise a way to provide long-term
capital to industry. Consequently, the government took control over the allocation
240
of capital by either restricting or targeting domestic credit and foreign capital

needed for industrialization.44
During the subsequent five-year economic development plans, the
government created an environment conducive to industrial growth through wellthought
out
initiatives that
include
constructing
social
infrastructures,
implementing investment guidelines, and fostering private firms - all of which were
monitored through assorted carrot and stick policies.
Thus, major strategic industries were chosen during each phase of five-year
economic development and participants in those industries were given privileges in
terms of easy access to low-cost domestic loans and foreign borrowing, and
various types of government subsidies.
Development o f Industrial Technology:
trajectories of
Table 58 summarizes the
industrial development in Korea. It shows the evolutionary
development of industries through national economic development phases.45 The

infant industries represent the strategic industries which were given special
^T his measure was aimed not only at increasing government influence in the allocation
of financial resources through the direct control of the national banking system, but also at
expanding credit and loans, particularly from foreign sources. In fact, the system of foreign-loan
repayment guarantees (which required EPB approvals to loan seekers) contributed substantially
to the inflow of foreign capital.
45During the first five-year economic development plan (EDP) period (1962-1966),
Korea concentrated on import substitution of consumer goods for self sufficiency. Export
promotion for labor-intensive productive products was pursued during the second EDP period
(1967-1971). In the 1970s , the structural transformation toward heavy and chemical industries
was pursued by the third and fourth EDPs (1972-1981). Faced with a new global market
environment in the 1980s in which she had been sandwiched between the push by next-tier
NICs with labor-intensive goods and the pull by advanced countries with technology-intensive
goods, Korea tried to adjust to the new environment by changing its industrial structure by
increasing the manufacturing share of GDP as well as by improving the quality of technology in
the fifth EDP period (1982-1986). This continued into the sixth EDP period (1987-1991).
Currently, the seventh EDP is being implemented with more emphasis being placed on such
areas as social development, environmental protection, and the internationalization of institutio
nal structures.
241
attention by the government in each five-year economic development planning

phase.
TABLE 58
STAGES IN SOUTH KOREAS INDUSTRIAL DEVELOPMENT
Infant industries
1961
Industries becoming
competitive
Self-sustaining
industries
Textiles: clothing;
footwear
1966
1966
1971
1971
1976
1976
1981
1981
1991
Electronic assemblies;
shipbuilding; fertilizers;
steel
Textile; clothing;
footwear
Motor vehicle assembly;

consumer electronics;
special steels; precision
goods (watches, cameras);
turnkey plant building;
metal products
shipbuilding
Textile; clothing;
footwear
Automotive components;
machine tools; machinery
assembly; simple instru
ments; assembly of heavy'
electrical machinery;
semiconductors

special steels; precision
goods; turnkey plant
building; metal products
shipbuilding; fertilizers;
steel
Aircraft
Automotive components;
machine tools machinery
assembly; simple instru
ments; assembly of heavy
electrical machinery;
semiconductors

special steels; turnkey
plant building; metal
products
Source: Linge and Hamilton (1981: 33 (Table 1.9)). Adapted from Edward J. Malecki (1991:
282 (Table 7.7)).
242
In short, Korea has achieved remarkable success in the advancement of

industrial technology in a short period of less than three decades. Domestically,
the success can be attributed to the efficient national system of innovation we
investigated in chapters 4 and 5 of this study. Within the international context,
however, Koreas success can not entirely be the result of its own efforts. Rather,
it is closely related to the institutional characteristics of the international industrial
network referred to in the previous section and Koreas position in the network
which is examined in the next section.
The Positional Characteristics of the Korean National System of Innovation
This subsection discusses the positional characteristics of the Korean
national system innovation in terms of how it has been positioned within changing
international industrial networks and what niches Korea has been able to carve out
through adaptive changes in the national system of innovation.
First, we will evaluate in a descriptive manner the evolutionary changes in
the position o f Koreas national system of innovation within the international
industrial network. The evaluation is based on the general characteristics of the
international industrial network since World War II which we reviewed in the
previous section. Next, we will attempt to empirically investigate
Koreas trade
patterns by utilizing the trade specialization index and the intra-industry trade
index. The rationales behind the utilization of the two indices are: 1) a national
system of innovation defines the technological capability of a nation; 2) the level of
243
a nations technological capability as the end result o f its national system o f

innovation may be reflected in the trade structure o f manufactured goods; and 3)
both the trade specialization index and the intra-industry trade index can be good
proxies for measuring trade patterns among nations. Finally, the positional
characteristics o f the Korean national system o f innovation will be evaluated
within the context o f the international industrial network as a conclusion o f the
section.
Evolutionary Changes o f the Korean National Innovation System Within the
International Industrial N etw ork
National
Innovation
System
in the
1960s: When
K orea initiated
industrialization efforts in the early 1960s, the dominant technological leader in the
world economy was the United States. During the same period, the world
economy witnessed remarkable growth in international trade due to a stable
international payment mechanism and tariff reductions under the Bretton Woods
System.
As has already been noted, the Fourth Kontratiev technological style was in
full swing during this period in the advanced countries. This w as also a period
when advanced countries, the United States in particular, had already lost their
competitive niches in the production o f labor-intensive goods and began to move
their production facilities to Asia and Latin American countries where labor costs
were low.
Under
this
favorable
international
economic
environment,
Korea
implemented the First and Second Five-year Economic Development Plans and
was able to successfully establish a competitive niche in the changing international
industrial structure by building up substantial productive and export capacities in
244
labor-intensive light industries, such as textiles, wigs, rubber footwear and toys.
Particularly, the textile industry was targeted by the government as a strategic
industry to be developed into a major export industry as a result of accumulated
technological capability in the production of textile goods.46
For the technologies and capital required, Korea had largely depended on
Japan and the development path of its national innovation system began to follow
the technological trajectories Japan had trodden before.47
National Innovation System in the 1970s: In the early 1970s, the Korean
government realized that the countrys interests might best be served by integrating
4f>The Korean textile industry applied modem production technologies in the second
decade of the twentieth century. At that time, cotton products, silk, yam and rayon fabrics were
available in the market. The output of the textile industry represented 12 to 16 per cent of all
manufacturing output in the 1920s and 1930s. During the Korean War. most of the industrial
facilities were destroyed, but by 1956, natural fabrics such as cotton, wool and silk were already
produced in sufficient volume to satisfy domestic demand. Throughout the 1960s and 1970,
textiles emerged as Koreas major export item. Exports of textile fibers and products averaged
about 35 per cent of the total value of exports of industrial products during the same period.
The accumulation of technical capability and continuous innovation in the textile industry had
brought the gradual substitution of synthetic for natural fibers. J.L. Enos and W.H. Park, The
Adoption and Diffusion o f Imported Technology: The Case o f Korea (London: Croom Helm,
1988), 52.
47From the 1870s to 1930s, Japans industrial structure shifted from traditional
industries such as food processing, wood products, and other miscellaneous products to modem
industries such as textiles, ceramics and pottery, metal products, and machinery. Among the
modem industries, textiles rapidly increased their share of manufacturing output from the 1870s
to 1890s, while metal products and machinery rapidly increased their shares from the 1900s to
the 1930s. As a result of those changes, the combined share of chemicals, metal products, and
machinery in total manufacturing increased from 13.7 percent in 1874-83 to 43.7 percent from
1930 to 39. A substantial share of heavy and chemical products in manufacturing production in
1930-39 indicates that Japan already had technological capability to produce relatively
sophisticated products even before World War II. Several years after the Second World War.
Japans economy and industry began to recover from its war wounds by utilizing the
technological capability it had accumulated during the industrialization process before the war.
Throughout the 1950s and 1960s, Japans industrial structure transformed from light industries
such as textiles, ceramics and pottery to heavy and chemical industries. Shujiro Urata, The
Impact of Imported Technologies on Japans Economic Development, in Chung H. Lee and
Ippei Yamazawa, eds.. The Economic Development o f Japan and Korea: A Parallel With
Lessons ( New York: Praeger, 1990), 73-5.
245
backwards into heavy industry to upgrade its innovative capability and to enter
into the next stage of industrialization.
This policy change was made against the background of an international
industrial structure which had been experiencing a fundamental change during the
period: the United States was no longer the single dominant player in international
innovation activities. The advanced countries in Europe as well as Japan had
caught up with the United State during the 1960s and became major players in the
mass production technologies of the Fourth Kontratiev type. Entering into the
1970s, when the Fourth Kontratiev wave was on a downswing, these advanced
countries began to feel the necessity of realigning their national innovation systems
geared towards a newly emerging technological style.
Thus, as a late starter in industrialization, Korea had the opportunity of
upgrading its national innovation system by assuming the position of the
technological niche held by the advanced countries during the Fourth Kontratiev
upswing.
Sensing this opportunity, Korea began to attract Japans fading industries
such as metal castings, bicycles, sewing machines, ceramics, leather products and
the like48 and
in 1972, at the start of the Third Five-year Plan, the Korean
government decided to make the chemical processing sector the focus of

investment activity. Subsequently, Korea entered the chemical, petrochemicals, and
iron and steel industries.
48in 1971, Japan announced a new policy which was to reorient the economy away from
pollution prone and natural-resource consuming heavy and chemical industries to clean and
brain-intensive industries. On the international front, Japan began to rely on exports which
would compete in quality, variety and sophisticated design, rather than in price. J.L Enos and
W.H. Park, op cit., 34.
246
Not only these industries new to the country, but these commodities
required resources that were scarce in Korea, particularly, foreign capital and
technology. To acquire these resources on the very large scale that capitalintensive industries require, the government had to systematize entry into these
industries49 and to shape an environment in which they could flourish.50
Korean National Innovation System in the 1980s: The two oil shocks in the
1970s also dealt a serious blow to the infant heavy and chemical industries in
Korea. Moreover, the next-tier Asian NICs as well as China emerged in the same
period as major exporters of labor-intensive goods. However, unlike most of the
advanced countries that were caught in a deep recession throughout the latter part
49The first of these efforts resulted in guidelines to aspiring firms: 1) suppliers of
technology and of foreign loans would be selected in a competitive manner, 2) projects fhnded by
foreign loans should be internationally competitive in scale, and the prices of their products
must be in the neighborhood of international prices; 3) in order to assure sound financial
structures, entrepreneurs undertaking heavy and chemical projects would be expected to provide
capital amounting to at least 40 per cent of the total investment Foreign capital was to be
limited, to no more than 60 per cent of the total investment. Foreign loans were to be utilized
primarily for the acquisition of capital goods and advanced technology not locally available,
rather than as equity, 4) direct foreign investments were to be encouraged, especially when they
would help to ensure dependable sources of raw materials, expand markets for products or
provide advanced technology. However, the foreign share was expected, in principle, not to
exceed 50 per cent; and 5) only the most modem techniques, those representing the current state
of the art in the developed countries, were to be chosen. Ibid., 34-35.
50Various incentives were offered to Korean and foreign firms willing to invest in the
new industries. A National Investment Fund was established whose purpose was to offer loans at
less than market rates for the purchase of plant and equipment and even for the provision of
working capital. Tax privileges under the Foreign Capital Inducement Act and other tax laws
were granted. Income and corporation taxes on enterprises with foreign capital were exempt, or
were reduced in proportion to the percentage of the total equity which foreign investors held. In
the event of capital expansion, both income and corporate taxes were also exempt or reduced in
proportion to the foreign share. Enterprises with foreign capital were also exempted from
acquisition taxes from the date of registration, and from property taxes from the initial reckoning
date prescribed in the respective tax laws. In addition, to create an hospitable environment for the
development of the heavy and chemical industries, the Korean government provided substantial
investment in supporting facilities. Industrial sites were selected to construct industrial
complexes upon government initiatives and. for these industrial complexes, the government
provided the infrastructures, such as harbor facilities, water supply svstems, roads and so on.
Ibid.. 35-36.
247
of 1970s and the 1980s, Korea recorded an exceptionally high average growth
rate during the same period. Entering into the 1980s, based on the technological
capabilities accumulated in the manufacturing of heavy and chemical products,
such industries as electronics equipment, automobiles, and iron and steel became
Koreas major export industries.
The international industrial structure which had experienced a fundamental
change during the 1970s was still undergoing institutional adjustments to the new
modes of development centered around the emerging technological style in the
downswing phase of the Fourth Kontratiev wave. Most developed countries were
dragged into a long recessionary phase during the 1980s, while only a few Asian
NICs along with Japan emerged as major exporters of manufactured goods.
Accordingly, Korea still had the option to carve out its competitive niche in the
international industrial network by efficiently adapting its
national innovation
system to the changing environment.

Korean National Innovation System in the 1990s: Infiltration by a few
Asian countries in the 1980s into the technological niche held by the advanced
countries and the inability of advanced countries to efficiently adjust their national
systems of
innovation to the new technological style forced the advanced
countries to become protectionistic in their trade and industrial policies.

Moreover, during the 1980s, the next-tier Asian NICs and China had
become more competitive in the international market of labor-intensive
manufactured goods and they even ventured into the production of capitalintensive goods, thereby putting heavy pressure on the Asian NICs including
Korea.
248
Facing
such unfavorable international environment since the early the
1990s, Korea has been forced to upgrade its national innovation system so that it
can carve out another competitive niche in the international industrial network.
Whether Korea can continue to successfully acquire technological capability as it
did in the past three decades is totally dependent upon how it adjusts its national
system of innovation to the new technological environment.
An Empirical Analysis of Koreas Trade Patterns
As noted earlier, the trade structure of a country in an open economy is the
end result of its national innovation system and, at the same time, it defines the
position and future direction of a national innovation system in the changing
international industrial network. Needless to say, the trade structure of a country is
also the end result of the countrys interactive industrial relationships among
different national innovation systems within the international industrial network.
Accordingly, by investigating Koreas trade pattern in manufactured goods,
we can understand the structural features of Koreas trade relationships with its
major trading partners and the positional characteristics of the Korean national
innovation system within the international industrial network.
It has been said that the growth of intra-industry trade in manufactured
goods is one of the most important trends in post-war trade. This is because of the
existence of intra-industry specialization among advanced industrialized countries
in the production of manufactured goods.51
51 Intra-industry trade is, by definition, the simultaneous export and import of products
belonging to the same industry. Whereas inter-industry specialization is the exchange of products
which belong to different industries, intra-industry specialization is the specialization of a
country in a narrow range of products within a given industry. Although much trade in primary'
commodities still takes the form of inter-industry specialization, a growing proportion of trade in
manufactured goods has involved intra-industry specialization in the post-war period.
249
During the 1980s, Korea emerged as one of the worlds major exporters
of manufactured goods and, therefore, some interesting questions can be posed:
1) What have been Koreas trade relations with the advanced industrialized
countries, particularly with the United States and Japan? 2) What has been
Koreas position within the international network of intra-industry specialization?
To answer these questions, the intra-industry trade index (IITI) developed by
Grubel and Lloyd52 will be utilized.
IITI can be a good measure for the level of intra-industry trade between
countries, but it does not tell much about the degree of specialization within a
52Grubel and Lloyd were among the first economists to seek a way to measure the
importance of intra-industry trade. They measured intra-industry trade as the percentage of a
countrys total trade ( export plus imports) in the products of a given industry which was
matched or balanced, that is, exports equal imports. For an individual product group or industry
/', the formula is:
(Xi +Mi)-\Xi -Mil

!x 100
IITi = -------------(Xi +Mi)
Where Xi and Mi stand, respectively, for the exports and imports of product group /'.
The bars around Xi - Mr denote that the sign of the trade balance is ignored. If all trade was
balanced, IIT; would equal 100. If all trade was one-way, IIT; would equal zero. Thus the closer
IIT; is to 100, the greater the importance of intra-industry trade. The closer IIT/ is to zero, the
greater the importance of inter-industry trade. To obtain the average level of intra-industry trade
for a country, Grubel and Lloyd proposed calculating a weighted mean, using the relative size of
exports and imports of a particular product group as weights. The formula is as follows:
(A 7 +Mi)-\Xi-Mi\
IITj = ^
;---------------------x 100
(A J+A 0)
i
Where j means that the formula is for the jth country and the i means the ith of n
industries. See Grubel H.G. an P. J. Lloyd, Intra-Industry Trade: The Theory and Measurement
o f International Trade in Differentiated Products (The Macmillan Press, 1975)
250
particular industry of a country. Therefore, in addition to IITI, we will use the

trade specialization index (TSI) by Grubel and Lloyd53 for investigation.
A total o f 151 manufacturing industries which belong to the SITC groups
of three digits54 are selected for investigation. The data used for investigation is
based on The Statistics of Foreign Trade compiled by the Korean Traders
Association from 1978 to 1991.
Koreas Major Trading Partners: If we take a close look at the Koreas
geographical composition of trade as shown in Table 59, we notice that Korea
largely depends on the United States and Japan for its trade. In 1963, about 57 %
of its exports went to both the United States and Japan while imports from both
countries in the same year amounted to 79 %. Trade dependency on the United
States and Japan has somewhat lessened, but the two countries are still holding
the major shares of Koreas trade volume in 1991 ( 43 % of exports and 49 % of
imports).
Western Europe is another region maintaining an important trade
relationship with Korea. In the 1960s, Koreas trade with Western European
countries was less than 10 % of its exports and imports. But, since the middle of
53The formula for TSI is as follows:
757/ = { X i- M i) /{ X i +Mi )
-1<75//(1
where, Xi = volume of ith industrys export

Mi = volume of ith industrys import
When exports and imports are equalized. TSI becomes 0. TSI 1 means that the industry
is export specialized while -1 means the industry is import specialized. Ibid.
54There exist various ways of measuring intra-industry trade index, but the measure
ment based on the SITC groups of three digits is considered most appropriate under the
definition of industry. D. Greenway and C. Miller, A Cross Section Analysis of Intra-Industry
Trade and the U.K.. European Economic Review, Vol. 25, No. 3 (1984), 321.
251
1970s, Koreas trade with Western Europe has gradually increased, reaching 17 %
of its exports and 15 % of its imports in 1991.
TABLE 59
KOREA'S GEOGRAPHICAL COMPOSITION OF TRADE a
Country
Developed Countries
United States
Western Europe
Japan
Canada, Australia, New
Zealand
Developing countries
Pacific countries (except china)
Other East Asian NICs
Hong Kong
Singapore
Taiwan
ASEAN-4
Malaysia
Thailand
Philippines
Indonesia
Chirm
Other developing countries
Other Asia
Africa
Europe'3
Middle East
Latin America
Other countries
63
65.7
28.1
8.7
28.6
0.3
Export
85
75
79.0 69.5
30.2 35.5
17.9 13.6
25.4 15.0
5.5
5.4
91
63.0
25.8
17.0
17.2
3.9
63
90.1
51.0
7.3
29.2
2.6
33.9
17.3
12.4
10.5
0.8
1.1
4.8
0.0
1.8
3.0
0.0
0.0
16.7
16.6
0.1
0.0
n.a
n.a
20.5
7.7
5.9
3.6
1.1
1.2
1.8
0.2
0.4
0.2
1.0
0.0
12.8
0.6
2.8
0.5
6.7
2.7
28.9
10.9
7.4
5.2
1.6
0.6
3.5
1.5
0.5
0.8
0.6
0.1
17.9
1.5
2.1
1.2
9.5
3.6
35.2
18.4
12.6
6.6
3.8
2.2
5.8
1.4
1.9
0.9
1.9
1.4
15.4
2.6
3.4
0.8
4.6
4.0
0.4
0.5
1.6
1.8
Import
75
85
72.7 63.6
25.9 20.8
8.2 12.5
33.5 24.3
5.1
6.0
91
70.8
23.2
15.1
25.9
6.6
9.7
7.5
4.3
1.1
0.5
2.7
3.2
0.4
0.3
2.2
0.3
0.0
2.2
1.7
0.1
n.a
n.a
0.4
27.4
7.4
2.7
0.3
0.2
2.2
4.7
1.7
0.6
0.4
2.0
0.0
20.0
0.5
0.6
0.1
17.8
1.0
34.1
10.7
3.6
1.6
0.9
1.1
7.1
4.0
0.5
0.5
2.1
1.5
21.9
0.9
1.3
1.0
12.7
6.0
27.7
10.0
4.1
0.9
1.3
1.9
5.9
2.3
0.7
0.4
2.5
4.2
13.5
1.4
0.1
0.5
8.7
2.8
0.2
0.1
2.3
1.5
Source: Korean Traders Association, The Statistics o f Foreign Trade. various issues.
n.a. = not available
unit: percentage
Încludes Greece. Portugal and Turkey.
252
Koreas trade with both the Pacific Asian countries including China has
been increasing since the middle of the 1980s. This trend reflects the fact that
Korea has entered another stage of adjusting and upgrading its national innovation
system to create a competitive niche within international industrial network.
Koreas Intra-Industry Trade With Japan and USA: First, when we look at
IITI trends in the manufacturing sector between Korea and Japan, and Korea and
the USA as calculated and shown in Table 60, we notice that the level of intra
industry trade between Korea and the two countries has gradually been increasing
over the period investigated.
TABLE 60
TREND OF INTRA-INDUSTRY TRADE INDEX WITH THE USA AND JAPAN
IN THE KOREAN MANUFACTURING SECTOR
SITC
Product Group
1978
1980
1982
1984
1986
1988
1990
1991
Chemicals and
Related Products
World
USA
Japan
41
25
17
59
14
35
49
15
31
48
20
25
47
27
30
46
22
32
51
24
33
56
21
31
Manufactured
Goods By
Materials
World
USA
Japan
74
24
61
56
41
72
57
51
84
68
36
67
72
36
65
77
53
94
85
72
92
91
90
89
Machinery' and
Transport Equip.
World
USA
Japan
70
96
61
83
99
72
99
99
84
97
79
67
96
54
65
87
64
94
97
88
92
97
96
89
Miscellaneous
Manufactured
World
USA
Japan
21
9
57
23
12
73
2i
15
63
24
14
74
26
13
70
27
17
48
37
25
55
45
35
64
Source: calculated from Appendix B
253
By sectors, SITC group 5 (chemicals and related products) has been having
a relatively low level of intra-industry trade both with Japan and USA. This may
be because o f the chemical industrys attribute of being an industry which supplies
basic materials required by other domestic industries.
Both SITC group 6 (manufactured goods by materials such as leather
goods, rubber goods, textiles, and iron and steel, etc.) and group 7 (machinery and
transportation equipment) are sectors in which Korea has been maintaining a
higher level of intra-industry specialization with both Japan and the USA. One
noteworthy fact is that, in both groups, the indices increased dramatically from
1978 through the early 1980s, decreased somewhat through the middle of the
1980s and then increased again from the late 1980s. This may reflect the economic
recession suffered by the advanced countries in the middle of 1980s.
To investigate the level of advancement in intra-industry specialization
with the United States and Japan, the number of industries in the SITC groups by
IITI intervals are tabulated in Table 61. The numbers of industries belonging to
IITI intervals of 61 and over (industries having significant advancement in intra
industry trade) have increased from 24 in 1978 to 39 in 1991 in the case of Japan,
while in the case of the USA from 21 in 1978 to 29 in 1991. The numbers of
industries belonging to IITI intervals of less than 20 have dropped from 89 in 1978
to 58 in 1991 with Japan, while with the USA they have fallen from 92 in 1978 to
78 in 1991, thus showing that the advancement of intra-industiy trade has been
faster with Japan than with the USA.
254
TABLE 61
TREND OF IIT WITH JAPAN AND THE USA BY INDEX INTERVALS

Classification
Product Groups
IITI Intervals
0 - 20
2 1 - 40
5. Chemicals and
4 1 - 60
Related Products
(25)
6 1 - 80
81 -100
0 - 20
6. Manufactured Goods
2 1 - 40
4 1 - 60
Bv Materials
(53)
6 1 - 80
81 - 100
0 - 20
7. Machinery'and
2 1 - 40
4 1 - 60
Transport Equipment
(45)
6 1 - 80
81 - 100
0 - 20
2 1 - 40
8. Miscellaneous
4 1 - 60
Manufactured Goods
(28)
6 1 - 80
81 - 100
0 - 20
2 1 - 40
4 1 - 60
Total
(151)
6 1 - 80
81 - 100
Japan
1978
17
3
3
2
-
24
7
10
4
9
32
6
5
2
-
16
2
3
6
1
89
18
20
14
10
USA
1991
11
10
2
1
1
8
15
9
15
6
25
7
4
6
3
14
3
4
3
4
58
35
19
25
14
1978
18
2
1
1
3
31
5
6
3
8
25
8
7
4
1
18
6
3
1
-
92
21
17
9
12
1991
18
2
2
1
2
25
7
10
4
7
22
6
6
5
6
13
7
4
1
3
78
22
22
11
18
Source: ibid.
Note: The figures in parentheses represent the number of industries in the group
When we classify manufactured goods by their use and look into the IIT
trends of both Japan and the USA as shown in Table 62, we notice that Korea
has had a relatively higher intra-industry trade with Japan in labor-intensive goods,
durable consumer goods and labor-intensive intermediate goods, while with the
255
USA Korea has had a higher intra-industry trade in capital goods and laborintensive intermediate goods.
TABLE 62
TREND OF IIT WITH JAPAN AND THE USA IN MANUFACTURED GOODS BY USE
78
Japan
86 87 89
91
78
86
Labor-intensive
38
38
41
48
47
23
32
30
32
34
Capital-intensive
20
26
32
34
31
25
36
36
34
32
Non-durable consumer goods
20
20
20
33
28
14
26
27
28
27
Durable consumer goods
39
45
48
51
55
17
20
23
19
27
Capital goods
16
17
25
27
23
28
50
46
42
40
Labor-intensive intermediate goods
47
44
47
63
56
34
44
40
42
44
Capital-intensive intermediate goods
22
31
35
32
31
24
26
24
27
24
Manufactured goods by use
USA
87 89
91
Source: ibid.
Note: For classification of manufactured goods by use, refer to Appendix A.
Koreas Pattern of Trade Specialization With Japan and the USA: To

evaluate the pattern of specialization (whether export-specialized or importspecialized) with Japan and the USA, we have also classified manufactured goods
by use and computed the trade specialization index in each sector for the 1978-91
period. Table 63 lists the computed results.
256
TABLE 63
TREND OF TSI WITH JAPAN AND THE USA IN MANUFACTURED GOODS BY USE
Japan
Manufactured
Goods By Use
USA
78
86
87
89
91
78
86
87
89
91
Labor-intensive
goods
0.12
0.04
0.13
0.18
0.04
0.55
0.56
0.55
0.44
0.34
Capital-intensive
goods
-0.70
-0.62
-0.48
-0.40
-0.47
-0.38
-0.13
-0.13
-0.26
-0.35
Non-durable
consumer goods
0.53
0.53
0.69
0.52
0.41
0.52
0.73
0.68
0.59
0.59
Durable consumer
goods
-0.27
-0.23
0.06
0.06
-0.08
0.47
0.72
0.77
0.54
0.56
Capital goods
-0.77
-0.74
-0.68
-0.60
-0.69
-0.47
-0.15
-0.08
-0.32
-0.37
-0.23
-0.38
-0.31
-0.13
-0.24
0.24
0.26
0.22
0.13
-0.05
-0.70
-0.56
-0.46
-0.31
-0.37
-0.38
-0.29
-0.35
-0.37
-0.53
Labor-intensive
intermediate
goods
Capital-intensive
intermediate
goods
Source: ibid.
Table 63 shows that Korea is export-specialized in labor-intensive goods

and non-durable consumer goods while it is import-specialized in capital-intensive
goods, capital goods and capital-intensive goods toward both Japan and the USA.
In case of durable consumer goods, Korea is import-specialized toward Japan and
export-specialized toward the USA. In the case of labor-intensive intermediate
goods, Korea was import-specialized toward Japan and export-specialized toward
257
the USA until the 1980s. However, the level of export specialization in laborintensive intermediate goods toward the decreased throughout the 1980s, and in
1991 it moved forward import specialization. This may be because of Koreas
weakening competitiveness in the late 1980s in such manufacturing sectors as
veneer, plywood and particle board manufacturing (634), wood manufactures
(635), clay construction materials (662), and base metals (699).
Also the level of export specialization with the USA is much higher than
that of with Japan, while the level of import specialization is much higher with
Japan than with the USA. Therefore, Koreas trade patterns with Japan and the
USA can generally be characterized as import-specialized toward Japan and
export-specialized toward the USA. This trade pattern of import specialization
toward Japan and export specialization toward the USA suggests that Korea
imports capital goods, technology, and intermediate goods from Japan to assemble
for exports to USA. For example, durable consumer goods such as television
receivers (761), radio-broadcasting receivers (762), sound recorders (763), and
telecommunication equipment (764) are typical goods which are being importspecialized from Japan but export-specialized to the USA.
Koreas Trade Structure With Pacific Asian Countries:
As has already
been shown in Table 59, Koreas trade with Pacific Asian countries including
China has been increasing very since the latter part of the 1980s. In 1975, Koreas
trade with these countries accounted for less thuH 10 % of both its exports and
258
imports. The figures, however, almost doubled in 1991, reaching 19.8 % in exports
and 14.2% in imports. Thus, trade relations with Pacific Asian countries have been
reshaping Koreas trade structure.
Table 64 shows Koreas TSI and IITI trends with Pacific Asian countries.
These indices are also computed based on the classification of manufactured goods
by use which belong to SITC groups having three digits.
TABLE 64
TSI AND IITI WITH PACIFIC ASIAN TRADING PARTNERS
Country'
Singapore
Hong Kong
Taiwan
SITC
Group
I
II
III
IV
V
VI-I
VI-II
I
II
m
IV
V
VI-I
VI-II
I
II
III
IV
V
VI-I
VI-II
78
0.94
0.42
0.95
0.85
0.12
0.93
0.70
0.84
0.70
0.73
0.62
0.66
0.86
0.84
0.00
0.13
-0.39
0.00
-0.27
0.03
0.44
82
0.91
0.54
0.98
0.95
0.25
0.91
0.83
0.78
0.47
0.73
0.85
0.33
0.80
0.82
-0.35
0.08
-0.51
0.16
-0.38
-0.35
0.20
TSI
85
0.90
0.28
0.93
0.87
0.31
0.90
0.10
0.83
0.42
0.72
0.88
0.19
0.84
0.95
-0.37
-0.15
-0.12
-0.21
-0.40
-0.43
0.09
88
0.89
0.45
0.91
0.89
0.38
0.89
0.44
0.90
0.66
0.82
0.86
0.54
0.89
0.83
-0.13
0.01
0.10
0.28
-0.09
-0.29
0.02
91
0.85
0.46
0.76
0.79
0.39
0.90
0.50
0.90
0.55
0.82
0.67
0.38
0.93
0.89
-0.30
-0.06
-0.70
-0.08
-0.25
-0.32
0.19
78
3.1
29.2
2.7
7.3
44.1
3.4
14.8
16.4
30.3
26.9
37.7
34.3
13.6
15.8
99.8
88.1
36.4
99.6
62.7
97.0
69.5
82
8.6
45.9
2.1
4.6
74.8
9.0
16.8
21.8
53.2
27.0
15.3
67.3
19.6
18.2
64.7
92.4
48.7
84.3
61.8
65.0
80.5
IITI
85
9.6
72.0
7.4
12.9
69.3
9.9
90.0
17.0
58.3
28.0
12.4
80.6
16.0
4.8
62.7
84.9
88.4
79.1
59.7
57.4
91.2
88
11.0
54.6
8.6
11.3
62.4
11.0
55.9
10.2
34.3
18.1
13.7
46.4
11.0
17.1
86.6
99.3
90.1
71.8
91.3
70.7
97.9
91
15.3
44.0
0.0
31.9
44.5
10.6
50.9
10.6
42.3
24.0
27.0
56.7
8.1
13.3
85.8
86.0
90.5
73.2
88.3
87.1
60.4
TABLE 64 CONTINUED
Malaysia
Indonesia
Thailand
Philippine
China
SITC
Group3
I
II
III
IV
V
VI-I
VI-II
I
n
III
IV
V
VI-I
VI-II
I
II
HI
IV
V
VI-I
VI-II
I
II
III
IV
V
VI-I
VI-II
I
II
III
IV
V
VI-I
VI-II
78
0.64
-0.01
0.93
0.38
0.73
0.52
0.07
0.99
0.95
0.97
0.99
1.00
1.00
0.90
0.75
0.59
0.54
0.97
0.22
0.74
0.91
0.87
0.86
0.99
0.69
0.28
0.89
0.94
82
0.92
0.43
0.73
0.26
0.72
0.92
0.53
0.73
0.93
0.95
0.96
1.00
0.70
0.87
0.54
0.83
-0.60
0.75
0.21
0.72
0.93
0.85
0.65
0.97
0.25
-0.03
0.87
0.94
TSI
85
0.82
0.14
0.87
0.20
0.13
0.81
0.68
0.46
0.76
0.93
0.96
0.95
0.42
0.69
0.52
0.49
0.01
0.84
-0.28
0.58
0.86
0.84
0.33
0.76
0.82
0.06
0.85
0.66
-1.00
0.54
-1.00
0.41
-0.83
-1.00
0.54
88
0.63
0.26
0.79
0.38
0.28
0.54
0.38
-0.33
0.74
0.62
0.68
0.94
-0.39
0.59
0.75
0.83
0.72
0.82
0.65
0.78
0.93
0.75
0.38
0.70
0.79
0.71
0.79
0.14
-0.93
0.10
-0.08
0.84
0.59
-0.93
-0.02
91
0.63
0.43
0.63
0.48
0.53
0.70
0.09
0.19
0.63
0.76
0.65
0.94
0.12
0.30
0.69
0.70
0.65
0.45
0.57
0.76
0.89
0.85
1.00
0.49
0.83
0.50
0.93
0.52
-0.46
-0.23
-0.34
-0.14
0.41
-0.46
-0.55
78
36.5
99.3
7.0
62.2
27.1
48.1
93.1
1.2
4.8
2.6
0.7
0.2
0.4
10.0
25.2
41.4
45.8
2.8
78.3
25.6
9.0
12.6
14.4
0.5
31.5
72.0
10.8
6.2
82
8.2
56.8
26.7
74.4
27.9
8.1
46.9
27.1
6.5
5.1
4.0
0.1
29.7
13.4
46.1
16.9
40.2
25.5
79.4
28.5
6.7
14.8
35.3
2.7
74.9
97.1
13.3
6.2
IITI
85
18.0
85.6
13.0
79.8
87.0
19.2
31.7
54.4
23.9
7.0
4.3
5.3
57.8
31.0
48.3
51.2
99.1
16.1
71.7
42.3
14.1
15.9
66.7
24.3
17.9
94.1
15.0
34.3
0.4
46.3
0.0
59.0
17.4
0.2
46.1
88
37.4
74.1
20.5
62.2
72.1
46.1
62.0
67.1
25.6
38.2
32.0
5.9
60.6
40.5
25.1
17.0
27.6
18.4
34.6
22.2
7.5
24.6
62.1
30.3
20.9
28.8
21.4
85.8
7.1
90.3
92.4
15.7
40.9
6.9
97.6
91
37.2
57.1
37.3
51.9
46.6
29.8
91.3
81.5
37.2
23.9
34.5
5.7
87.8
69.6
30.6
29.9
35.0
54.7
43.5
23.7
11.0
14.6
0.0
51.1
16.8
49.9
6.5
48.4
53.7
76.9
65.7
86.2
59.1
54.2
44.9
Source: ibid.
Note:a I, labor-intensive goods; II, capital-intensive goods; HI, non-durable consumer goods; IV,
durable consumer gods; V, capital goods; VI-I, labor-intensive intermediate goods; VI-II, capitalintensive intermediate goods.
260
In case of trade with other Asian NICs, Korea is export-specialized toward

Singapore and Hong Kong and import-specialized toward Taiwan. Considering the
level of intra-industry specialization, Korea has been maintaining a higher IITI
with Taiwan and a relatively lower IITI with both Singapore and Hong Kong. This
means that Korea has been engaging in intra-industry trade with Taiwan and inter
industry trade with Singapore and Hong Kong.
With the ASEAN-4 countries,
Korea is largely export-specialized.
However, the IITI trends indicate that Koreas intra-industry trade with these
countries assumed a significant importance from the latter part of the 1980s.
Korea entered into an active trade relations with China in 1985. Since then,
the flow of trade between Korea and China has been increasing dramatically. Table
64 shows that Korea is import-specialized toward China. It also shows that Korea
has a high intra-industry trade relationship with China.
Korean National Innovation System and Its Positional Characteristics
In an open economy like that of Korea in which she is poorly endowed
with natural resources and thus has to dependent mostly on international trade to
drive her industrial activities, trade patterns of manufactured goods can reflect the
level and status of Koreas national innovation system and also determine the
future direction and position of the Korean national innovation system.
Accordingly, by examining the trade patterns o f Koreas manufactured goods, the
positional characteristics of
the Korean national innovation system within
international industrial network can be understood.
261
As the preceding empirical results reveal, Koreas trade pattern has largely
been import-specialized in technology, capital goods and intermediate goods
toward Japan, while it has been mostly export-specialized in labor-intensive goods,
non-durable consumer goods and durable consumer goods toward the United
States and the EC countries.
In particular,
Korea has been importing
manufactured goods from Japan to assemble for exports to the United States. This
triangular trade pattern emerged in the 1970s when readjusted her industrial
structure in favor of heavy and chemical industries. Since then, this has been the
basic pattern of Koreas trade structure, despite considerable changes in the
composition of Koreas manufactured goods.
Therefore, the national system of innovation in Korea can be said to have
been characteristically positioned as the intermediate link among Japan and the
United States, and EC member countries within the international industrial
network. This intermediate position has, to some extent, been intentionally
assumed by the voluntaristic actions on the part of Korea in her effort to carve out
a competitive niche in the changing hierarchy of global technological innovations.
Koreas position, however,
has also been determined and constrained by the
general features of the international industrial network which is continually being

reformulated and changed due to the international diffusion of technological
innovations.
262
As already noted, the international industrial network has evolved through

two phases. Korea entered the industrialization process in the early 1960s and it
coincided with the first phase of the international industrial network which was
characterized by United States supremacy in global technological development. As
a late participant in the international industrial network, Korea was allowed to
position herself at the lower end of the network hierarchy as a provider of laborintensive manufactured goods, a position that was vacated by the United States
and other advanced countries. The technological legacy Korea inherited from both
Japanese colonialism and US protectorship after Korean War allowed Korea to
carve out a competitive niche in the international industrial network by adjusting
her national innovation system geared mainly toward the national innovation
systems of both the United States and Japan. Lacking technological capability at
the outset of industrialization, Korea had to engage in processing trade which
involved importing technology and intermediate goods mostly from Japan to
assemble for exports to the United States.
In the second developmental phase of the international industrial network,
US dominance in technological innovation had been weakening and was eventually
replaced with a triad of
technological leadership. During this phase, Korea
gradually positioned herself as the intermediate link between Japan and United
States by readjusting its national system of innovation directed toward advancing
industrial technologies in the heavy and chemical industries. Korea imported
263
technologies, capital goods and intermediate goods to assemble them for exports
to the United States under a contract manufacture agreement.
In the 1990s, the international industrial network is going through yet
another development stage
in which the emerging technological style (e.g.,
Kontratiev V type) entails a totally different international industrial environment

that will reshuffle the existing hierarchy of national innovation systems within the
international industrial network. Having already been sandwiched between the
push of the next-tier Asian NICs including China and the pull of the Advanced
countries, Korea is once again being forced to readjust its position within the
international industrial network. Whether Korea can continue to be as successful as
it was in the past three decades is wholly dependent upon how she adapts her
national innovation system in an efficient way to the changing technological
environment.
Chapter Summary
In this chapter, we have attempted to understand the Korean national
system of innovation within the international context. The economic success of
Korea can be attributed to the efficient national system of innovation she has
continually built up and adapted to within a changing technological environment.
The international industrial network can be characterized as having evolved
through two distinct phases since the end of World War H. The first phase covers
the period from the end o f World War II through the 1960s when the United
264
States became the worlds dominant technological leader. During this period,
mass production of the Fordist type was the mainstay of industrial production
especially among oligopolistic enterprises, the management style of which was
based on planned coordination. The stability of
international payment system of
both world trade and the
Bretton Woods contributed to the rapid
expansion of global industrial activities. The second phase began from the 1970s in
which US technological dominance had been gradually weakening before it was
replaced with a number of dominant players, thereby creating a triad of economic
blocs composed of the United States, EC and Japan.
The historical antecedents to the 1960s contributed to the positioning of
the Korean national system of
innovation within the international industrial
network. Japanese colonialism provided a technological base which would later be

utilized as a launching pad for successful industrialization. The Korean War and
the ensuing cold-war international politics brought about the permanent American
presence in the Korean peninsula. Consequently, Korea became a primary recipient
of military aid which greatly contributed to the formation of infra-structure
required for industrialization in the 1960s.
The empirical investigation on Koreas trade patterns with its major trading
partners shows that Korea is import-specialized toward Japan and exportspecialized toward the United States. Korea imports capital goods, technology,
and intermediate goods from Japan to assemble for exports to USA and European
265
countries. Although it is true that Koreas industrial structure has changed from
light industries to heavy and chemical industries, the basic triangular pattern of
trade relations between Korea and Japan and Korea and the United States has not
changed.
National trade patterns represent the end result of a national innovation
system in an open economy. And it also determines the future position of a
national innovation system. Therefore, it is possible to understand the positional
characteristics of the Korean national innovation system within the international
industrial network by looking at its trade patterns with its major trading partners.
The Korean national innovation system can be said to have been characteristically
positioned as an intermediate link among Japan, the United States, and EC member
countries. This position has, to some extent, been intentionally assumed by the
voluntaristic actions on the part of Korea in her effort to create a competitive
niche in the hierarchy of global technological innovations. However, the position
has been determined and constrained by the general features of the international
industrial network while the international network is being continually
reformulated and changed due to the international diffusion of technological
innovations.
266
CHAPTER VII
SUMMARY AND CONCLUSIONS
The purpose of this study is to seek an answer to the puzzle of Koreas

and economic growth with a special emphasis on the institutional adaptations to
the new technological systems of a global nature. The objectives of this study
were threefold: first, to examine the characteristic features of the Korean national
innovation system in terms of its efficiency in adapting to the changes of
technological system; second, to investigate the learning process of a
representative private Korean firm in terms of its organizational adaptation to the
changing technological environment; and third, to understand the Korean national
system of innovation within the international context.
Theoretical Review and Search for New Theoretical Framework: In the
theory of economic progress, technological change has recently been considered
as an import source of economic progress and, in the analysis of technological
changes within the economic system, the analysis of the diffusion of innovations
has obtained a central position for understanding the contribution of technological
progress to economic growth. The theories on the diffusion of technological
innovation have long been concerned with the adoption and refinement of the
267
epidemic model, relying heavily on the mathematical theory of epidemics based on

the macroeconomic assumption that technological change is brought about
exogenously and is on average continuous and evenly distributed.
As a criticism for these unrealistic assumptions about technology and as an
alternative theoretical framework, the concept of national system of innovation
has been proposed by recognizing the dynamic nature of technological innovations
and the resultant structural changes. This concept is based on the assumptions that
the organized markets of the real world are organized differently among different
national systems and that the behavior of agents are governed by different rules
and norms since they are rooted in different systems.
The concept of national system of innovation is a useful tool for
understanding national differences in innovative capacity and, thus, the differences
in economic growth. However, the national system of innovation of a nation
does not exist in isolation. Rather, it is interconnected with other national systems
of innovation within the international industrial network. The existing theories on
international diffusion of technological innovation are concerned with either the
voluntaristic aspect of agents or the functionalistic aspect of structure without
providing the meso-level concepts to adjudicate between macro-level structural
forces and micro-level factors.
In this study, a new theoretical framework was developed that combines
the specifics of what is happening to an individual country or a group of countries
268
at particular place and in a certain historical period within a global process that is
restructuring social, economic, and political reality. Thus, the international
diffusion of technological innovation is theoretically explained as the network
relationships among different national systems of innovation. In the network
approach, each nation has a strategic niche to exploit according to its position of
its national system of innovation within the international industrial network. This
position is constantly being reformed and changed through the process of
international technological diffusion and adoption of technological innovations, but
it is also constrained by the international industrial network in which interactions
among national systems of innovation takes place.
The Characteristic Features of the Korean National Innovation System:
The investigation of the institutional features of the Korean national innovation
system shows that both private industry and the government
have actively
participated in building up technological capability through national industrial

activities.
Modem Korean firms were bom in the 1950s. National effort to
reconstruct industrial bases that were reduced to ashes during the Korean War
created an economic and business environment for entrepreneurs to grasp business
opportunities by maximizing the creative and managerial skills they had gained
under the Japanese rule. The business environment in Korea can be characterized
as being dominated by Chaebol. This phenomenon of Chaebol dominance
269
sprouted in the early 1960s when the military government decided to induce large
business enterprises to participate in the industrialization effort by offering them
financing, trade, tax incentives.
The organizational structure of Chaebol has placed them in an advanta
geous position to recruit the best human resources, to identify, negotiate, and
finance foreign technology transfer, to obtain business licenses and preferential
financing from the government, to apply experience gained in one field of business
to another, and to take risks in new business with existing businesses providing a
cushion therefor. Chaebol have played a pivotal role in introducing technological
innovations and advancing industrial technologies in Korea.
Lacking technological capabilities at the outset of industrialization, the
major source of technological learning for Korean industries has been through
foreign technology imports. The most important channel of learning foreign
technologies for Korean business firms has been technology licensing. The next
important channel of learning is through dispatch of in-house technicians to
advanced countries for on-the-job training. It is noteworthy that learning foreign
technology through foreign direct investment has been relatively low in Korea.
The major institutional features of
Korean firms for supporting an
innovation system can be found in the efficient human resource management and
active investment in establishing R&D and technical training facilities. As Korea
was richly endowed with a reservoir of well-educated and dedicated human
270
resources from the outset of industrialization, Korean business firms have wisely
utilized Koreas human resources to their advantage. The Chaebol business
groups, in particular, have strategically involved themselves in the development of
efficient human resource management practices. In addition to their emphases on
recruiting the most capable people, the Chaebol corporations are placing greater
importance on the continuous training and development of employees. In fact,
they perceive training and development as their key to increasing productivity and
maintaining international competitiveness. Accordingly, they have invested heavily
in the establishment of formal training facilities to provide their employees with
training on a regular basis.
The Korean government has played an active role in supporting the
national system o f innovation. Ever since the start of Koreas industrialization in
the early 1960s, the Korean government has recognized the importance of science
of technology as an indispensable moving force for the industrialization and
economic development process. As a result,
the development of science and
technology became an integral part of consecutive five-year economic

development plans and the predominant policy objective was the building-up of
infrastructures involving a great variety of institutions and legal measures for the
development of industrial technology. The development of industrial technology
was promoted through the inducement of foreign technologies and was carried
out through a skillful mixture of policy options. One distinguishing feature of
271
governments policy regarding the inducement of foreign technologies was that

foreign direct investment had generally been restricted by the government and
instead, technology transfer through other means such as capital goods imports
and technical licensing was promoted.
Another characteristic feature of the governments role in supporting the
advancement o f technical capability in Korean industry is the scientific and
technological manpower management system established by the government.
Through various ministries concerned, the Korean government has incorporated
and administered the formation and distribution of
technological manpower
needed by the industries.

Needless to say,
the active participation of private industry and the
government is critical for improving the technological capability of a nation. A

countrys technological capability, however, can be most efficiently improved only
when society as a whole can create an environment favorable to technological
innovation and diffusion. In this context, a major policy goal of the Korean
government was the construction of a solid foundation for science and technology
from the early stage of industrialization. The general public had been imbued with
the can-do-spirit through various pan-national movements, the most typical of
which was the Saemaul (new village) movement. The social zeal for education
has laid the foundations for rapid and successful absorption and diffusion of
272
industrial technologies in Korea by supplying educated manpower to the industrial

sector.
A Case Study on the Innovation System of a Private Firm-The Case of
Samsung Electronics Company: The advancement of industrial technology of a
nation is largely dependent upon the level of technical learning as well as the
searching and selection of
technological strategies of
private firms. The
technological capability of a firm is built up in a cumulative way through a learning

process. To see how a private firm accumulates its technological capability through
a learning process and how it adapts its innovation system to the changing
environment, Sam Sung Electronics Company was chosen as a case study. As a
late-starter in electronics manufacturing, SEC has shown remarkable progress in
less than twenty-five years, becoming the largest single firm and one of the leading
makers of memory devices that developed the worlds first 64-megabit dynamic
random access memory.
SECs remarkable growth is the result of technological competence gained
through technological learning and efficient institutional adaptation to the changing
environment. Since its inception in the early 1970s, SEC has gone through seven
different phases of growth. In each phase, SEC has been actively involved in
technological learning and has adapted itself to the environmental change by way
of
organizational
change and technological innovation. Thus, technological
learning has become the central concern of SEC management and it has been
273
incorporated into every aspect of SEC operation . SEC had been depending on
technical licensing as its major channel of technological learning during the early
phases of its development. During the later phases of its growth, however, SEC
put more effort in the self-development of technological capability by investing
heavily in R&D activities and through in-house technical training. Some
distinguishing features of SECs innovation system are its efficient human resource
management system, heavy investment in R&D activities and technical training of
its employees, and its cooperative user-supplier network that, based on long
standing trust, entails the continuous flows of process innovation and improve
ment in product quality.
Korean National System of
Innovation
Within the International
Industrial Network: The economic success of Korea can be attributable to the

efficient national system of innovation she has built up and adapted to changes
within the technological environment. The national innovation system of Korea is
not entirely the result of its own actions. It is rather the end result of the
interactions with other national systems of innovation. Similarly, the interactions
among different national innovation systems are also constrained by the
international industrial network which is constantly being reformulated and
changed as it adapts itself to the changing technological style.
274
The international industrial network can be characterized as having evolved

through two distinct phases since the end of World War II. The first phase covers
the period from the end of World War II through the 1960s in which the United
States had become the dominant technological leader. During this period, mass
production of the Fordist type had become the mainstay of industrial production
especially among oligopolistic enterprises, and the management style was based on
planned coordination. The stability of world trade and the international payment
system under Bretton Woods contributed to the rapid expansion of global
industrial activities. The second phase began from the 1970s in which US
dominance had been gradually weakening before it was replaced with a number of
dominant players in technological leadership, creating a triad of economic blocs
composed of the United States, EC and Japan. In this evolution of international
industrial restructuring, Korea was able to carve out a competitive niche by
efficiently adapting its national innovation system to the changing technological
environment.
The historical antecedents to the 1960s had left a profound imprint on the
position of the Korean national innovation system of within the international
industrial network. The Japanese colonialism provided technological base which
would later be utilized as a launching pad for successful industrialization. The
Korean War and the ensuing cold-war international politics brought about the
permanent American presence in the Korean peninsula, whereby Korea became a
275
prime recipient of military aid, which later contributed to the formation of

infrastructures required for industrialization.
The result of empirical investigation on Koreas trade patterns shows that
Korea is import-specialized toward Japan and export-specialized toward the
United States. Korea imports capital goods, technology, and intermediate goods
from Japan to assemble for exports to USA and European countries. Although it is
true that Koreas industrial structure has moved away from light industries toward
heavy and chemical industries, the basic triangular pattern of trade relations
between Korea and Japan, and Korea and the United States has not changed
significantly.
Given that national trade patterns are
the end result of a national
innovation system in an open economy and that it also determines the future
position of a national innovation system,
we can determine the positional
characteristics of the Korean national innovation system within the international

industrial network by looking at its trade patterns with major trading partners. The
Korean national innovation system has been characteristically positioned as the
intermediate link among Japan and, the United States and EC member countries.
This position has, to some extent, been intentionally assumed by the voluntaristic
actions on the part of Korea in its effort to carve out a competitive niche in the
hierarchy of global technological innovations. But the position has also been
determined and constrained by the general features of the international industrial
276
network which is continually being reformulated and changed due to the inter
national diffusion of technological innovations.
Concluding Remarks: The capability of initiating or absorbing techno
logical innovation is the most important factor for national economic growth. The
national system of innovation represents the level of technological capability
which can continually be upgraded with adaptive institutional innovations. The
national differences in the ability to innovate and diffuse can thus be a result of
differences in the ability to efficiently adapt to changes in a technological system.
The puzzle of Koreas economic success can therefore be explained in
terms of Koreas efficient adaptation of its national innovation system to the
changing technological environment. Private firms, the Chaebol business groups in
particular, have become major contributors to the advancement of technological
capabilities in Koreas industrial sector. The Korean government has played an
important role in the development of industrial technologies by providing policy
guidelines and laying out institutional frameworks for promoting technological
innovation in industry. The existence of a social environment conducive to the
development of science and technology has been another element in the national
innovation system in Korea.
During the past thirty years, after Koreas industrialization started in the
early 1960s, Korea has gained easy access to the international industrial network
by taking over the vacated position left behind by the advanced countries in their
277
by taking over the vacated position left behind by the advanced countries in their
process of adjusting their national innovation systems to a new technological style.
Whether Korean can continue its economic success into the future is wholly
dependent upon its national innovation system that will have to be adjusted to the
emerging technological style requiring a totally different social and institutional
framework for innovation.
This study started by asking why and how has a group of the Asian NICs
represented by Hong Kong, Singapore, South Korea and Taiwan become the
center of growth and prosperity while most of the other developing nations are
suffering from underdevelopment in recent years?. In its conclusion, this study
explained the economic puzzle of Korean growth. Considering the theoretical
position taken by this study that national systems of innovation are closely
connected with each other and that they are characterized by network
relationships, including all other Asian NICs, a much more viable theoretical
explanation for international diffusion of technological innovation should have
resulted; therefore, the task is humbly deferred as a subject of future research.
Finally, it has to be mentioned that the minor objective of this study was to
rebut the deterministic and somewhat sarcastic observation of an economist, as
quoted below, on the big puzzle by providing a more theoretically plausible
explanation for the Korean economic puzzle.
278
...the differential timing in modernization in Japan, Taiwan, and Korea

may be termed a historical accident
In short, Japans economic
advancement is ahead of Taiwans and South Koreas not because
Japan was more successful in the sense of higher growth rate, but
because Japan entered the modern era before Taiwan and Korea
and because South Korea had to face more severe adjustment and
recoveiy problems than either Japan or Taiwan - both being histori
cal accidents. Thus, Japan's puzzle is not entirely Japanese and is
not even a big puzzle (not to mention a miracle).1
1Young Chin Kim. ' Why is South Korea Succeeding? A Heterodox Perspective, in
Gene K. Kwon. ed., Korean Economic Development ( New York: Greenwood Press, 1990), 27.
279
APPENDIX A
CLASSIFICATION OF MANUFACTURED GOODS BY USE

(BASED ON SITC 3 DIGIT)
Classification
SITC Classification No.
Labor Intensive Goods (I)

(48 items)
611, 612, 613, 633, 634, 635, 651, 652, 653, 654, 655,
656. 657, 658, 659,662,663, 664,665,666,667. 691,
692, 693, 694, 695,696, 697,699, 763, 812.821, 831,
842, 843, 844, 845. 846, 847, 848, 851, 893,894, 895,
896. 897. 898. 899.
Capital/Technology-Intensive
Go<xls (II)
(105 items)
266,267, 335, 511. 512. 513, 514. 515. 516, 522. 523,
524, 531. 532, 533, 541, 551, 553, 554,562, 572, 582.
583, 584, 585, 591, 592, 598,621.625,628,641, 642.
661.671,672. 673,674,675.676,677.678,679. 681,
682, 683, 684, 685, 686, 687, 688,689, 711, 712. 713.
714, 716, 721, 722, 723, 724, 725, 726, 727, 728. 736.
737, 741, 742, 743, 744, 745, 749, 751, 752, 759, 761.
762. 764, 771, 772. 773, 774, 775, 776, 778, 781, 782.
783, 784, 785, 786, 791. 792. 793. 871. 872, 873, 874.
891. 882. 883. 884. 885. 892.
Non-durable Consumer Goods (III)

(18 items)
553, 572,656, 658,659. 831, 842,843. 844, 845. 846,

847, 848. 851. 883. 892. 895, 899.
Durable Consumer Goods (IV)

(21 items)
666. 696.697. 761. 762,763, 764.775, 781. 782, 783.

784. 785. 812. 821. 885, 893. 896. 897, 898.
Capital Goods (V)

(41 items)
695. 711, 712, 713, 714, 716. 721, 722, 723. 724. 725.
726, 727, 728. 736, 737, 741, 742, 743, 744, 745. 749,
751, 752, 759, 771, 772, 773. 774, 776, 778, 786. 791.
792. 793. 871. 872. 873. 874. 881. 884.
Labor-intensive Intermediate
Goods (VI-I) (22 items)
611, 612. 613, 633, 634, 635, 651, 652, 653, 654. 655
657. 662. 663. 664.665. 667. 691.692.693.694. 696.
Capital-intensive Intermediate
Goods (VI-II)
(49 items)
335. 511, 512. 513. 514. 515. 516. 522, 523. 524. 531.
532. 533. 541. 551. 554. 562. 582. 583. 584. 585. 591.
592. 598.621. 625, 628. 641.642. 661.671. 672.673.
674,675,676.677,678,679,681,682,683.684,685,
686. 687.688. 689. 882.
Source: MITI, Japan, White Paper on Trade, 1986, 405-406. Adapted from Chul-Kyu Kang and
Suk-In Chang. Processing Industry and Industrial Organization (Seoul: Korea Institute for
Economics and Technology. 1988). 222.
Note: 1. Based on SITC Rev. 2 classification.
280
APPENDIX B
TRADE SPECIALIZATION INDEX (TSI) AND

INTRA-INDUSTRY TRADE INDEX (IITI)
1. USA
IITI
TSI
1985
-0.78
-0.90
-0.96
-0.61
-0.60
-1.00
-0.74
-1.00
0.00
0.07
-1.00
-0.92
-0.74
0.00
-1.00
0.14
-0.59
O
1982
-1.00
-0.95
-1.00
-0.63
-0.81
-1.00
-0.99
-0.32
-1.00
0.00
-0.48
-1.00
-0.91
-0.87
0.00
-1.00
-0.93
-0.41
-0.84
0.00
-0.07
0.00
0.00
0.00
0.00
0.00
-0.93
-0.82
-0.98
-0.99
-0.67
-1.00
0.00
0.00
-0.96
-0.92
0.80
511
512
513
514
515
516
522
523
524
525
531
532
533
541
542
551
553
554
562
571
572
573
574
575
579
581
582
583
584
585
591
592
593
597
598
611
612
1978
-LOO
-0.03
-0.94
0.18
-0.79
-0.96
-1.00
-0.54
-1.00
0.00
-0.94
-1.00
-0.91
-0.84
0.00
-1.00
-0.99
-0.61
-1.00
0.00
-0.11
0.00
0.00
0.00
0.00
0.00
-0.99
-0.96
-1.00
-1.00
-0.28
-0.86
0.00
0.00
-1.00
-1.00
0.98
0.00
0.99
0.00
0.00
0.00
0.00
0.00
-0.57
-0.49
-1.00
-0.99
-0.68
-0.99
0.00
0.00
-0.96
-0.96
0.77
1988
-0.91
-0.94
-0.98
-0.51
-0.55
-0.99
-0.97
-0.87
-0.89
-1.00
0.20
-1.00
-0.89
-0.68
-0.73
-1.00
-0.02
-0.77
-0.92
-1.00
-0.67
-0.94
-0.91
-0.96
-0.98
-0.37
0.32
-0.94
0.00
0.00
-0.37
-0.96
-0.93
-1.00
-0.97
-0.69
0.95
1991
-0.90
-0.95
-0.97
-0.64
-0.83
-0.80
-0.99
-0.94
-0.55
-1.00
0.31
-1.00
-0.97
-0.90
-0.79
1
o
SITC
-0.71
-0.86
-1.00
-0.35
-0.04
-0.98
-0.94
-0.88
-0.58
-0.48
0.03
-0.89
0.00
0.00
-0.54
-0.89
-1.00
-1.00
-0.98
-0.82
-0.05
1978
9.0
44.0
8.0
59.0
10.0
23.0
7.0
58.0
1.0
0.0
19.0
0.0
23.0
39.0
0.0
0.0
30.0
33.0
27.0
0.0
36.0
0.0
0.0
0.0
0.0
0.0
23.0
14.0
15.0
3.0
53.0
7.0
0.0
0.0
9.0
1.0
10.0
1982
27.0
23.0
17.0
53.0
10.0
24.0
17.0
73.0
0.0
0.0
25.0
0.0
21.0
46.0
0.0
4.0
40.0
85.0
46.0
0.0
5.0
0.0
0.0
0.0
0.0
0.0
40.0
92.0
10.0
0.0
40.0
12.0
0.0
0.0
8.0
4.0
25.0
1985
43.0
28.0
14.0
50.0
23.0
9.0
20.0
58.0
0.0
0.0
28.0
0.0
23.0
54.0
0.0
2.0
87.0
42.0
41.0
0.0
14.0
0.0
0.0
0.0
0.0
0.0
82.0
93.0
9.0
4.0
68.0
12.0
0.0
0.0
15.0
7.0
41.0
1988
9.1
5.8
2.3
49.0
45.4
0.7
3.1
13.2
10.9
0.1
80.0
0.0
11.3
32.0
27.1
0.0
98.2
23.2
8.3
0.0
33.0
6.2
9.4
4.4
2.3
62.9
67.6
5.7
0.0
0.0
62.8
4.3
6.7
0.3
3.1
31.1
4.8
281
1991
9.1
7.4
3.0
37.5
33.9
2.0
1.7
4.2
25.0
0.0
59.5
0.2
3.5
19.2
19.9
0.5
38.4
16.9
40.9
90.0
95.9
1.7
7.3
8.9
25.0
60.7
93.9
18.4
0.0
0.0
36.4
12.0
0.0
0.0
4.6
25.0
85.7
SITC
613
621
625
628
629
633
634
635
641
642
651
652
653
654
655
656
657
658
659
661
662
663
664
665
666
667
669
671
672
673
674
675
676
677
678
679
681
682
683
684
685
686
687
689
691
1978
-0.83
-0.42
0.99
-0.28
0.00
-1.00
1.00
0.94
-0.54
0.86
-0.49
0.72
0.87
0.96
0.88
-0.56
0.14
1.00
0.99
0.66
0.89
-0.36
-0.02
0.07
1.00
0.03
0.00
0.07
0.32
0.62
0.98
-0.91
-0.65
0.89
0.86
0.91
-1.00
0.08
-0.97
-1.00
-1.00
1.00
-0.86
0.67
0.10
1982
-0.98
-0.93
0.95
-0.67
0.00
-0.74
0.94
0.82
-0.66
0.04
-0.85
0.84
0.87
0.91
0.14
0.61
0.39
0.99
0.91
-0.77
0.36
-0.35
-0.52
0.01
0.99
0.22
1.00
-0.66
0.98
0.52
0.93
0.45
0.27
0.83
0.68
0.90
0.91
-0.34
-1.00
-0.97
-1.00
-0.95
-1.00
-0.60
0.21
1985
-0.96
-0.20
0.98
-0.02
0.00
-0.21
0.02
0.41
-0.67
0.40
-0.19
0.97
0.93
0.80
0.84
0.70
0.41
0.99
0.80
0.84
-0.15
-0.30
-0.22
-0.04
1.00
0.35
0.98
-0.70
0.99
0.85
0.98
0.67
0.91
0.93
0.90
0.84
0.36
0.52
-1.00
-0.90
0.25
0.25
-0.96
-0.86
0.89
1988
-0.89
-0.13
0.68
0.00
0.33
-1.00
-0.90
0.89
-0.37
0.36
-0.44
0.91
0.94
0.61
0.90
0.66
0.03
0.97
-0.10
0.66
0.28
-0.16
-0.45
0.27
1.00
0.12
0.00
-1.00
0.93
0.98
0.80
0.38
0.82
0.87
0.87
0.89
-0.69
-0.85
-1.00
-0.95
-0.96
0.98
-0.88
-0.86
0.47
1991
-0.61
-0.59
0.83
0.00
-0.08
-0.71
-0.99
-0.31
-0.70
-0.06
-0.60
0.74
0.91
0.86
0.87
0.87
0.05
0.92
0.12
-0.73
-0.56
-0.38
-0.41
0.08
0.96
0.10
0.00
-1.00
-0.99
0.04
0.88
-0.43
-0.46
0.91
0.50
0.52
-0.99
-0.92
-0.99
-0.96
-1.00
-0.95
-0.97
-0.66
0.26
1978
33.0
31.0
2.0
71.0
0.0
80.0
2.0
11.0
98.0
31.0
54.0
56.0
40
20.0
88.0
32.0
71.0
11.0
9.0
23.0
98.0
82.0
56.0
87.0
6.0
72.0
0.0
87.0
12.0
36.0
82.0
11.0
14.0
67.0
62.0
49.0
41.0
10.0
0.0
21.0
13.0
75.0
0.0
98.0
24.0
1982
6.0
35.0
4.0
90.0
0.0
63.0
21.0
15.0
95.0
70.0
59.0
39.0
27.0
40.0
67.0
23.0
61.0
3.0
22.0
8.0
75.0
84.0
52.0
76.0
16.0
78.0
44.0
50.0
55.0
74.0
47.0
77.0
54.0
49.0
49.0
34.0
47.0
78.0
0.0
29.0
15.0
47.0
5.0
38.0
19.0
1985
6.0
51.0
7.0
99.0
0.0
33.0
87.0
36.0
80.0
62.0
55.0
53.0
30.0
65.0
98.0
25.0
68.0
3.0
31.0
34.0
45.0
56.0
58.0
99.0
4.0
82.0
1.0
3.0
91.0
65.0
77.0
44.0
45.0
53.0
47.0
30.0
74.0
68.0
0.0
35.0
15.0
2.0
0.0
53.0
10.0
1988
11.4
86.8
31.5
0.0
66.7
0.0
9.7
10.9
63.5
64.4
55.7
8.9
6.0
38.5
9.8
34.0
96.7
2.6
89.9
33.5
71.8
84.3
54.7
73.2
0.3
88.0
0.0
0.0
7.3
2.1
20.2
62.4
18.3
12.6
12.7
11.4
31.4
14.6
0.1
5.3
4.1
1.7
12.0
13.9
53.3
282
1991
11.0
55.3
12.6
0.0
88.9
0.0
6.7
64.8
41.4
78.4
47.1
17.0
9.7
26.1
7.3
17.7
87.1
6.4
81.2
21.7
60.0
72.5
71.7
98.0
1.9
78.5
0.0
5.0
12.6
86.8
7.3
80.2
85.3
3.6
28.1
30.2
4.6
14.7
56.4
6.0
0.1
10.6
28.9
3.5
68.3
1978
-0.88
0.99
0.90
0.36
0.97
0.94
0.46
-1.00
-0.94
-0.99
-0.70
-0.93
-1.00
-0.99
-1.00
o
o
1
SITC
692
693
694
695
696
697
699
711
712
713
714
716
718
721
722
723
724
725
726
727
728
731
733
735
736
737
741
742
743
744
745
746
747
748
749
751
752
759
761
762
763
764
771
772
773
-0.23
-0.99
-0.54
-0.78
-0.98
0.00
0.00
0.00
-0.79
-0.95
-0.99
-0.94
-0.92
-0.51
-0.76
0.00
0.00
0.00
-0.81
0.43
-0.74
0.22
0.98
1.00
0.94
0.58
-0.79
-0.35
-0.44
1982
-0.52
0.91
0.63
0.19
0.95
0.95
-0.20
-1.00
-1.00
-0.92
-0.34
-0.69
-0.15
-0.95
-0.95
-0.88
-0.58
-0.97
-0.97
-0.97
-0.95
0.00
0.00
0.00
0.09
-0.91
-0.93
-0.85
-0.97
-0.97
-0.93
0.00
0.00
0.00
-0.61
0.38
-0.48
0.13
1.00
1.00
0.85
-0.30
-0.29
-0.81
-0.69
1985
-0.10
0.92
0.68
0.32
0.99
0.93
0.13
-0.53
-1.00
-0.86
-0.50
-0.31
-0.38
-0.07
-0.07
-0.41
-0.59
-0.38
-0.79
-0.84
-0.82
0.00
0.00
0.00
-0.15
-0.86
-0.91
-0.78
-0.94
0.19
-0.89
0.00
0.00
0.00
-0.45
0.55
0.36
0.40
1.00
0.99
0.97
0.37
-0.12
-0.63
-0.18
1988
-0.14
0.97
0.68
0.16
0.96
0.90
0.38
-1.00
0.58
-0.88
-0.34
0.31
-0.84
-0.97
0.74
-0.08
-0.61
-0.95
-0.93
-0.95
-0.60
-0.52
-0.98
-0.12
0.00
-0.68
-0.22
-0.61
-0.73
0.49
-0.94
-0.58
-0.12
-0.30
-0.47
0.72
0.58
0.23
0.98
0.99
0.96
0.63
0.14
-0.30
0.18
1991
-0.42
0.93
0.46
-0.40
0.88
0.82
-0.38
-0.81
-0.66
-0.94
-0.22
-0.52
-0.83
-0.57
-0.99
-0.59
0.01
-0.88
-0.88
-0.91
-0.82
-0.47
-0.96
-0.71
0.00
-0.70
-0.88
-0.73
-0.84
0.12
-0.93
-0.46
-0.50
-0.65
-0.58
0.64
0.39
0.09
0.93
0.99
0.97
0.21
0.33
-0.45
-0.32
1978
45.0
21.0
27.0
50.0
5.0
12.0
99.0
1.0
1.0
8.0
29.0
12.0
63.0
26.0
28.0
26.0
18.0
26.0
12.0
7.0
6.0
0.0
0.0
0.0
3.0
1.0
2.0
7.0
4.0
19.0
13.0
0.0
0.0
0.0
13.0
100.0
11.0
93.0
12.0
31.0
70.0
94.0
72.0
38.0
94.0
1982
83.0
19.0
42.0
89.0
6.0
12.0
99.0
9.0
3.0
9.0
64.0
30.0
67.0
20.0
48.0
28.0
25.0
9.0
7.0
8.0
29.0
0.0
0.0
0.0
56.0
19.0
34.0
11.0
13.0
27.0
21.0
0.0
0.0
0.0
29.0
82.0
35.0
99.0
3.0
9.0
65.0
68.0
92.0
33.0
57.0
1985
87.0
14.0
44.0
65.0
5.0
21.0
90.0
90.0
61.0
12.0
68.0
44.0
64.0
24.0
19.0
32.0
27.0
24.0
8.0
5.0
14.0
0.0
0.0
0.0
19.0
4.0
26.0
13.0
8.0
66.0
15.0
0.0
0.0
0.0
30.0
77.0
83.0
92.0
2.0
6.0
48.0
98.0
95.0
36.0
91.0
1988
86.2
3.5
31.6
84.3
3.8
9.6
61.6
0.3
41.7
11.7
66.5
69.0
16.0
3.3
26.4
91.7
39.4
5.1
7.4
4.6
39.8
48.4
2.4
88.1
0.0
31.8
77.9
38.8
26.7
50.6
6.3
42.0
88.2
69.8
52.6
27.8
42.5
76.7
1.7
0.7
3.9
37.4
86.4
70.3
81.9
283
1991
40.1
3.8
29.6
76.8
12.4
16.4
83.9
80.4
67.0
15.7
81.7
94.7
7.9
8.0
32.0
38.5
31.6
1.3
4.9
6.2
21.8
36.9
4.1
51.5
0.0
30.6
25.6
38.1
10.8
64.9
4.9
52.4
56.7
43.2
47.0
52.0
55.6
85.1
7.5
1.1
1.6
58.7
98.9
59.9
89.1
1978
-0.92
0.62
0.04
0.41
-0.92
-0.99
-1.00
-0.57
0.94
0.90
-0.93
-0.23
0.63
0.00
-0.36
0.00
0.88
1.00
0.00
1.00
1.00
0.96
1.00
0.96
0.98
1.00
1.00
0.76
-0.93
-0.88
-0.54
0.65
-0.95
-0.92
0.78
0.49
0.00
-0.56
0.70
0.99
0.66
1.00
0.99
0.66
0.95
1982
-0.96
0.73
0.04
0.14
-0.98
-0.99
-1.00
0.25
0.91
0.98
-0.79
-0.75
0.36
0.00
-0.70
0.00
0.54
1.00
0.00
1.00
1.00
0.99
1.00
1.00
0.98
0.99
1.00
0.37
-0.91
-0.84
-0.60
0.00
-0.83
-0.20
0.87
0.87
0.00
-0.55
0.17
0.85
0.24
0.86
0.98
0.63
0.90
1985
-0.91
0.88
0.11
0.29
-0.50
-0.13
-0.97
0.83
0.96
0.87
-0.90
-0.84
0.43
0.00
0.08
0.00
0.51
1.00
0.00
1.00
1.00
1.00
1.00
1.00
0.93
0.99
1.00
0.31
-0.79
-0.97
-0.68
-0.40
-0.31
0.03
0.93
0.86
0.00
-0.34
0.21
0.93
0.75
0.88
0.98
0.79
0.86
1988
-0.73
0.96
0.10
0.31
0.99
o
SITC
774
775
776
778
781
782
783
784
785
786
791
792
793
811
812
813
821
831
841
842
843
844
845
846
847
848
851
871
872
873
874
881
882
883
884
885
891
892
893
894
895
896
897
898
899
-0.92
0.31
0.96
0.97
0.70
-0.92
0.73
-0.70
-0.49
0.71
0.78
1.00
1.00
1.00
1.00
1.00
1.00
0.98
0.00
0.99
0.99
0.41
-0.53
-0.50
-0.64
0.22
-0.66
-0.21
0.87
0.90
-0.69
0.10
0.61
0.89
0.80
-0.18
0.97
0.77
0.86
1991
-0.82
0.78
0.06
0.04
0.97
-1.00
1.00
-0.12
0.57
0.96
-0.98
-0.68
0.89
-0.98
-0.68
0.77
0.63
0.99
1.00
1.00
1.00
1.00
0.99
0.97
0.00
0.99
0.96
-0.03
-0.80
-0.95
-0.69
0.06
-0.60
0.42
0.77
0.90
-0.87
-0.09
0.45
0.72
0.58
0.22
0.96
0.54
0.76
1978
13.0
61.0
98.0
93.0
60.0
24.0
29.0
9.0
76.0
18.0
33.0
79.0
67.0
0.0
57.0
19.0
0.0
0.0
0.0
0.0
0.0
2.0
0.0
2.0
5.0
2.0
0.0
55.0
55.0
47.0
27.0
84.0
18.0
32.0
46.0
85.0
0.0
100.0
47.0
10.0
41.0
29.0
7.0
48.0
62.0
1982
5.0
58.0
98.0
93.0
44.0
96.0
54.0
39.0
68.0
2.0
74.0
86.0
57.0
0.0
59.0
0.0
37.0
0.0
0.0
0.0
0.0
1.0
0.0
1.0
2.0
1.0
0.0
91.0
87.0
25.0
35.0
48.0
10.0
84.0
36.0
74.0
0.0
47.0
48.0
18.0
68.0
88.0
22.0
33.0
66.0
1985
6.0
41.0
1.0
92.0
6.0
99.0
35.0
70.0
46.0
10.0
90.0
81.0
81.0
0.0
84.0
0.0
37.0
1.0
0.0
0.0
0.0
0.0
0.0
0.0
4.0
1.0
0.0
93.0
40.0
8.0
25.0
40.0
16.0
99.0
43.0
80.0
0.0
58.0
64.0
18.0
61.0
91.0
14.0
30.0
51.0
1988
27.5
4.5
90.3
69.2
1.2
0.3
7.9
69.5
3.8
2.8
30.2
7.8
27.5
29.6
50.8
28.7
22.1
0.4
0.1
0.1
0.1
0.1
0.1
1.9
0.0
0.7
0.9
58.7
47.0
50.3
35.6
78.3
34.0
78.8
13.3
10.1
31.0
90.2
38.8
10.6
20.5
82.3
2.6
23.1
14.0
284
1991
22.1
17.9
81.7
80.8
8.5
0.6
78.8
81.7
17.0
1.6
10.3
25.7
13.7
1.3
22.0
48.2
42.3
0.8
0.2
A^
0.3
0.1
0.3
2.8
0.0
0.6
3.6
58.6
23.3
21.1
29.4
95.5
34.2
79.9
18.9
8.6
19.7
96.8
50.7
15.6
37.2
19.3
5.3
39.9
19.0
2. JAPAN
1982
-0.48
-0.59
-0.83
-0.62
-0.95
-0.61
-0.80
-0.39
-1.00
0.00
-0.77
-1.00
-0.81
-0.52
0.00
-0.92
-0.97
0.98
0.00
0.90
0.00
0.00
0.00
0.00
0.00
0.00
-0.71
-0.50
-1.00
-1.00
-0.86
-0.87
0.00
0.00
-0.97
-0.99
0.73
-0.63
-0.91
0.76
-0.94
TSI
1985
-0.30
-0.56
-0.81
-0.77
-0.95
-0.86
-0.72
-0.49
-1.00
0.00
-0.76
-1.00
-0.86
-0.63
0.00
-1.00
-0.97
-0.97
0.93
0.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.60
-0.46
-1.00
-0.93
-0.05
-0.89
0.00
0.00
-0.91
-0.99
0.03
-0.78
-0.95
0.70
-0.88
1988
-0.64
-0.86
-0.83
-0.59
-0.90
-0.88
-0.55
-0.77
-0.34
l-H
1
1978
-0.88
-0.57
-0.93
-0.90
-0.97
-0.70
-0.93
-0.53
-0.93
0.00
-0.76
-1.00
-0.88
-0.49
0.00
-1.00
-0.24
-0.90
0.34
0.00
0.98
0.00
0.00
0.00
0.00
0.00
0.00
-0.84
-0.95
-0.97
-0.95
-0.76
-0.98
0.00
0.00
0.00
-1.00
0.86
-0.45
-0.95
0.87
-0.38
SITC
511
512
513
514
515
516
522
523
524
525
531
532
533
541
542
551
553
554
562
571
572
573
574
575
577
579
581
582
583
584
585
591
592
593
597
598
611
612
613
621
625
628
-0.64
-1.00
-0.74
-0.62
-0.15
-0.99
0.64
-0.64
0.91
-0.99
-0.21
-0.09
-0.86
-0.61
0.00
-0.98
-0.42
-0.50
-0.74
0.00
0.00
-0.54
-0.84
0.90
-0.99
-0.88
-0.88
0.56
-0.33
-0.62
0.73
0.00
1991
-0.72
-0.66
-0.67
-0.65
-0.81
-0.75
-0.64
-0.64
-0.51
-0.81
-0.73
-1.00
-0.77
-0.60
-0.39
-1.00
-0.88
-0.88
0.83
-0.65
-0.06
-0.10
-0.53
-0.71
0.00
-0.82
-0.22
-0.59
-0.30
0.00
0.00
-0.83
-0.87
1.00
-0.97
-0.88
-0.77
-0.25
-0.38
-0.69
0.58
0.00
1978
12.0
43.0
7.0
10.0
3.0
30.0
7.0
47.0
7.0
0.0
24.0
0.0
76.0
0.0
0.0
0.0
0.0
10.0
66.0
0.0
2.0
0.0
0.0
0.0
0.0
0.0
0.0
16.0
5.0
3.0
5.0
24.0
2.0
0.0
0.0
4.0
0.0
14.0
55.0
5.0
13.0
62.0
1982
52.0
41.0
17.0
38.0
5.0
39.0
20.0
61.0
0.0
0.0
25.0
0.0
0.0
0.0
0.0
0.0
0.0
3.0
2.0
0.0
10.0
0.0
0.0
0.0
0.0
0.0
0.0
29.0
50.0
0.0
0.0
14.0
13.0
0.0
0.0
3.0
1.0
27.0
37.0
9.0
24.0
6.0
IITI
1985
70.0
44.0
19.0
23.0
5.0
14.0
28.0
51.0
0.0
0.0
24.0
0.0
3.0
0.0
0.0
0.0
0.0
3.0
7.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
40.0
54.0
0.0
7.0
95.0
11.0
0.0
0.0
9.0
1.0
97.0
22.0
5.0
30.0
12.0
1988
35.9
14.0
16.8
40.9
10.1
11.8
44.9
23.1
66.4
0.0
35.6
0.0
25.7
38.3
85.3
0.8
35.6
36.0
9.4
0.6
78.6
90.8
14.2
38.9
0.0
1.9
57.7
50.4
25.7
0.0
0.0
46.4
16.4
9.6
1.2
12.4
12.4
44.3
66.6
38.2
26.9
0.0
285
1991
28.2
33.6
32.8
34.7
19.4
24.8
36.4
35.9
48.7
18.5
27.1
0.4
23.1
39.8
61.4
0.1
11.6
12.4
16.5
34.7
93.6
89.9
46.7
28.8
0.0
18.3
78.3
41.3
69.8
0.0
0.0
16.9
13.0
0.0
2.7
12.1
22.6
75.0
62.0
31.2
42.5
0.0
1978
0.00
-0.13
0.54
0.85
-0.84
-0.80
0.36
-0.18
-0.17
0.79
-0.88
0.18
-0.63
0.90
0.74
-0.06
-0.79
-0.04
-0.68
-0.07
0.41
-0.55
0.00
-0.01
-0.98
-0.88
-0.88
-1.00
-1.00
-0.82
-0.87
-0.02
-0.50
-0.99
-1.00
-0.86
-0.62
-0.96
-1.00
0.00
-0.47
-0.94
-0.71
-0.39
-0.48
1982
0.00
-0.94
-0.16
0.85
-0.44
-0.65
0.28
-0.06
-0.56
0.61
-0.93
0.04
-0.71
0.92
0.89
0.77
-0.87
-0.24
-0.72
-0.08
0.92
0.23
-1.00
0.01
0.18
-0.78
0.08
-0.90
-0.97
-0.75
-0.73
0.07
-0.39
-0.48
-1.00
-0.93
-0.97
0.63
-1.00
-0.62
-0.52
-0.80
-0.55
-0.76
-0.36
1985
0.00
-0.92
-0.86
0.74
-0.90
-0.56
0.37
-0.45
-0.48
0.57
-0.97
-0.38
-0.75
0.91
0.75
0.80
-0.94
-0.58
-0.75
-0.33
0.64
0.22
1.00
-0.93
-0.17
-0.60
-0.26
-0.95
-0.97
-0.40
-0.66
0.10
0.47
-0.65
-0.98
-0.90
-0.95
-0.95
-0.45
-1.00
-0.43
-0.55
-0.48
0.17
-0.92
1988
-0.71
-0.93
-0.26
0.75
-0.70
0.04
0.26
-0.23
-0.60
0.45
-0.45
-0.26
-0.19
0.97
0.74
0.97
-0.48
-0.66
-0.77
-0.42
0.21
0.05
0.00
-0.78
0.51
0.35
-0.51
-0.97
-0.10
0.20
0.27
0.24
0.60
-0.53
-0.86
-0.70
0.05
0.92
0.18
-1.00
1.00
0.55
-0.05
0.08
-0.32
1991
-0.51
-0.41
-0.64
0.65
-0.94
-0.25
0.09
-0.56
-0.24
0.42
-0.15
-0.45
-0.32
0.90
0.39
0.79
-0.70
-0.82
-0.70
-0.45
-0.51
-0.12
0.00
-0.91
0.67
0.36
0.21
-0.90
-0.27
-0.33
0.33
-0.22
-0.77
-0.75
-0.62
-0.79
0.57
0.76
-0.02
o
SITC
629
633
634
635
641
642
651
652
653
654
655
656
657
658
659
661
662
663
664
665
666
667
669
671
672
673
674
675
676
677
678
679
681
682
683
684
685
686
687
688
689
691
692
693
694
1.00
0.79
0.04
-0.33
-0.34
1978
0.0
87.0
46.0
15.0
16.0
20.0
64.0
82.0
83.0
21.0
12.0
82.0
37.0
10.0
26.0
94.0
21.0
96.0
32.0
93.0
59.0
45.0
0.0
99.0
2.0
12.0
12.0
0.0
0.0
18.0
13.0
98.0
50.0
1.0
0.0
14.0
38.0
4.0
0.0
0.0
53.0
6.0
29.0
61.0
52.0
1982
0.0
6.0
84.0
15.0
56.0
35.0
72.0
94.0
44.0
39.0
7.0
96.0
29.0
8.0
11.0
23.0
13.0
76.0
28.0
92.0
8.0
77.0
0.0
99.0
82.0
22.0
92.0
10.0
3.0
25.0
27.0
93.0
61.0
52.0
0.0
7.0
0.0
37.0
0.0
38.0
48.0
20.0
45.0
24.0
64.0
1985
0.0
8.0
14.0
26.0
10.0
44.0
63.0
55.0
52.0
43.0
3.0
62.0
25.0
9.0
25.0
20.0
6.0
42.0
25.0
67.0
36.0
78.0
0.0
7.0
83.0
40.0
74.0
5.0
3.0
60.0
34.0
90.0
53.0
35.0
2.0
10.0
5.0
5.0
55.0
0.0
57.0
45.0
52.0
83.0
8.0
1988
29.4
7.4
73.8
24.6
30.2
96.4
73.5
76.7
40.0
55.0
54.6
74.1
81.1
2.8
26.4
3.3
51.6
33.9
23.0
57.9
79.3
94.8
0.0
22.2
49.0
64.8
48.6
3.2
89.8
79.7
72.6
76.3
40.5
47.0
14.3
30.3
94.5
8.3
82.0
0.0
0.0
45.2
95.1
91.9
68.0
286
1991
49.1
59.1
35.6
35.3
5.8
75.3
91.3
43.8
76.3
58.5
84.6
54.7
67.7
10.5
61.3
21.1
29.9
17.8
30.2
54.9
48.8
88.5
0.0
9.5
32.9
64.5
78.8
10.1
73.1
67.1
67.5
77.5
23.2
25.5
38.2
20.5
42.5
23.8
98.2
0.0
0.0
21.1
96.3
67.5
65.9
SITC
695
696
697
699
711
712
713
714
716
718
721
722
723
724
725
726
727
728
731
733
735
736
737
741
742
743
744
745
746
747
748
749
751
752
759
761
762
763
764
771
772
773
774
775
776
1978
-0.90
-0.21
0.40
-0.42
-1.00
-1.00
-1.00
-0.81
-0.85
-1.00
-0.82
-1.00
-1.00
-0.96
-0.93
-0.81
-0.99
-0.99
0.00
0.00
0.00
-0.99
-1.00
-1.00
-0.98
-0.99
-0.96
-0.92
0.00
0.00
0.00
-0.93
-0.92
-1.00
-0.75
-0.44
-0.79
-0.67
-0.72
-0.23
-0.72
-0.90
-0.85
-0.60
-0.46
1982
-0.44
-0.44
0.23
-0.62
-1.00
-1.00
-0.99
-0.43
-0.61
-0.96
-0.90
-1.00
-1.00
-0.96
-0.98
-0.89
-0.97
-0.96
0.00
0.00
0.00
-0.65
-0.99
-0.99
-0.99
-0.99
-0.99
-0.89
0.00
0.00
0.00
-0.86
-0.55
-0.99
-0.77
-0.22
-0.26
-0.87
-0.63
0.05
-0.86
-0.89
-0.96
-0.40
-0.48
1985
-0.86
-0.70
-0.57
-0.67
-1.00
-0.98
-0.98
0.40
-0.55
-0.21
-0.86
-0.99
-1.00
-0.93
-0.96
-0.94
-0.99
-0.97
0.00
0.00
0.00
-0.96
-1.00
-0.98
-0.88
-0.99
-0.99
-0.94
0.00
0.00
0.00
-0.89
-0.89
-0.98
-0.60
-0.21
-0.06
-0.90
-0.51
-0.06
-0.88
-0.92
-0.99
-0.66
-0.49
1988
-0.76
0.35
0.59
-0.23
-0.98
-0.92
-0.69
0.16
-0.70
-0.92
-0.67
-0.96
-0.45
-0.91
-0.90
-0.96
-0.98
-0.92
-0.95
-0.96
-0.63
0.00
-0.93
-0.94
-0.96
-0.88
-0.87
-0.85
-0.97
-0.88
-0.91
-0.51
-0.46
-0.75
-0.60
0.87
0.32
-0.41
-0.42
0.02
-0.83
-0.58
-0.72
-0.04
-0.52
1991
-0.78
-0.31
0.42
-0.07
-0.99
. -0.99
-0.79
0.15
-0.61
-0.94
-0.94
-1.00
-0.73
-0.93
-0.95
-0.97
-0.95
-0.91
-0.93
-0.94
-0.66
0.00
-0.92
-0.94
-0.97
-0.85
-0.91
-0.88
-0.98
-0.84
-0.89
-0.26
-0.82
-0.84
-0.52
0.83
0.39
-0.44
-0.30
-0.05
-0.75
-0.38
-0.94
-0.02
-0.48
1978
10.0
79.0
60.0
58.0
0.0
0.0
0.0
19.0
15.0
0.0
18.0
0.0
0.0
4.0
7.0
19.0
0.0
1.0
0.0
0.0
0.0
1.0
0.0
0.0
2.0
1.0
4.0
8.0
0.0
0.0
0.0
7.0
46.0
0.0
25.0
56.0
21.0
33.0
28.0
77.0
28.0
10.0
15.0
40.0
54.0
1982
29.0
56.0
77.0
38.0
0.0
0.0
1.0
57.0
39.0
4.0
10.0
0.0
0.0
4.0
2.0
11.0
3.0
4.0
0.0
0.0
0.0
35.0
1.0
1.0
1.0
1.0
1.0
11.0
0.0
0.0
0.0
14.0
45.0
1.0
23.0
78.0
74.0
13.0
37.0
95.0
14.0
11.0
4.0
60.0
52.0
1985
14.0
30.0
43.0
33.0
0.0
2.0
2.0
60.0
45.0
79.0
14.0
1.0
0.0
7.0
4.0
6.0
1.0
3.0
0.0
0.0
0.0
4.0
0.0
2.0
12.0
1.0
6.0
11.0
0.0
0.0
0.0
11.0
11.0
2.0
40.0
79.0
94.0
10.0
49.0
94.0
12.0
8.0
1.0
34.0
51.0
1988
1991
23.6
21.6
69.4
64.6
40.6
58.0
76.8
93.0
1.6
0.7
7.8 .. 1.1
30.6
20.5
84.3
85.1
29.6
38.6
8.0
6.3
32.7
5.6
4.3
0.0
55.4
27.5
7.4
9.3
9.5
4.9
4.4
3.4
1.9
4.5
7.6
9.1
5.3
7.1
3.6
5.7
36.8
33.9
0.0
0.0
6.9
8.2
6.5
5.7
3.6
3.3
11.7
15.2
12.7
9.3
15.2
11.7
2.6
2.2
11.8
16.5
11.4
9.2
48.8
74.4
54.2
18.0
25.0
16.5
40.3
48.2
13.0
17.2
61.4
67.8
59.4
56.2
58.4
70.0
98.2
94.7
17.4
25.0
42.4
62.5
6.4
27.6
96.4
98.0
51.7
48.4
287
SITC
778
781
782
783
784
785
786
791
792
793
811
812
813
821
831
841
842
843
844
845
846
847
848
851
871
872
873
874
881
882
883
884
885
891
892
893
894
895
896
897
898
899
1978
-0.47
-0.99
-1.00
-1.00
-0.99
-0.45
0.25
-0.95
0.95
-0.99
0.00
-0.79
0.00
0.30
0.96
0.00
0.98
1.00
1.00
1.00
0.99
0.96
0.91
1.00
-0.82
-0.24
-0.99
-0.90
-0.66
-0.86
-0.61
-0.20
-0.49
0.00
-0.26
-0.14
0.40
-0.51
0.97
0.89
0.24
-0.36
1982
-0.51
-0.96
-1.00
-1.00
-0.95
-0.79
0.97
-0.80
0.99
-0.54
-0.64
0.47
0.00
0.47
0.95
0.00
1.00
1.00
1.00
1.00
0.98
0.97
0.96
0.99
-0.41
-0.32
-1.00
-0.93
-0.86
-0.94
-0.29
-0.42
-0.68
0.00
-0.58
0.15
0.58
-0.67
0.10
0.77
0.23
-0.43
1985
-0.60
-0.77
-1.00
-0.79
-0.94
-0.76
0.99
-0.90
0.22
-0.13
0.00
-0.65
0.00
0.72
0.98
0.00
0.99
0.99
0.99
1.00
0.99
0.92
0.92
0.99
-0.45
-0.48
-0.96
-0.95
-0.88
-0.95
-0.01
-0.36
-0.24
0.00
-0.70
-0.23
0.52
-0.68
-0.07
0.75
-0.06
-0.17
1988
-0.65
-0.45
-0.81
1.00
-0.90
0.36
0.74
-0.86
0.64
-0.51
-0.43
-0.61
0.00
0.77
0.99
1.00
0.99
1.00
1.00
0.99
0.98
0.00
0.99
0.97
-0.73
-0.46
-0.95
-0.93
-0.93
-0.81
0.88
-0.32
-0.26
-0.50
-0.48
0.18
0.80
-0.21
0.49
0.86
0.18
0.24
1991
-0.69
0.37
-1.00
-0.60
-0.81
-0.20
0.94
-0.92
-0.55
-0.71
-0.06
-0.88
-0.07
0.38
0.98
0.98
0.97
0.98
0.97
0.97
0.92
0.00
0.98
0.93
-0.78
-0.74
-0.94
-0.88
-0.88
-0.88
0.56
-0.24
-0.46
-0.57
-0.38
0.15
0.65
-0.50
0.08
0.54
-0.02
0.14
1978
53.0
1.0
0.0
0.0
1.0
55.0
75.0
5.0
5.0
1.0
0.0
21.0
0.0
70.0
4.0
0.0
2.0
0.0
0.0
0.0
1.0
4.0
9.0
0.0
18.0
16.0
1.0
10.0
34.0
14.0
39.0
80.0
51.0
0.0
74.0
86.0
60.0
49.0
3.0
11.0
76.0
64.0
1982
49.0
4.0
0.0
0.0
5.0
21.0
3.0
20.0
1.0
46.0
0.0
36.0
0.0
53.0
5.0
0.0
0.0
0.0
0.0
0.0
2.0
3.0
4.0
1.0
59.0
68.0
0.0
7.0
14.0
6.0
71.0
58.0
32.0
0.0
42.0
85.0
42.0
33.0
90.0
23.0
77.0
57.0
1985
40.0
23.0
0.0
21.0
6.0
24.0
1.0
10.0
78.0
87.0
0.0
35.0
0.0
2.0
1.0
0.0
1.0
1.0
1.0
0.0
1.0
8.0
8.0
1.0
55.0
52.0
4.0
5.0
12.0
5.0
99.0
64.0
76.0
0.0
30.0
77.0
48.0
32.0
93.0
25.0
94.0
83.0
1988
34.8
54.9
19.4
0.0
10.3
64.0
26.0
13.8
36.4
49.4
56.8
38.6
99.8
22.9
0.9
0.3
0.7
0.2
0.3
0.8
2.4
0.0
1.5
3.5
26.8
53.7
4.7
7.2
7.3
19.4
12.0
68.5
73.7
50.0
51.9
82.4
20.1
79.4
51.2
14.3
81.8
75.7
288
1991
31.3
63.4
0.0
39.8
18.6
80.2
5.8
8.2
45.3
28.9
94.2
12.2
93.2
62.3
1.5
2.0
3.4
2.5
3.3
2.9
8.1
0.0
1.7
7.1
21.8
26.3
5.9
11.7
12.0
11.7
44.4
76.5
53.9
42.7
61.5
84.9
35.4
49.8
92.1
46.0
97.5
86.0
3. SINGAPORE
1982
1.00
0.35
1.00
0.44
0.00
0.00
0.96
0.97
0.00
0.00
1.00
0.00
-0.98
0.36
0.00
-1.00
0.52
0.76
0.00
0.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.09
0.77
1.00
0.00
0.92
1.00
0.00
0.00
-0.86
-0.39
1.00
0.00
-0.28
TSI
1985
-0.85
-0.92
0.95
0.36
-0.78
1.00
0.00
-0.46
1.00
0.00
0.00
0.89
0.00
-0.79
0.03
0.00
-0.91
0.76
-0.10
1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.35
-0.24
1.00
0.00
-0.72
0.88
0.00
0.00
-0.93
-1.00
-0.41
0.00
0.51
1988
-0.83
-0.95
0.87
0.65
0.14
-0.99
0.00
0.00
0.85
1.00
-1.00
0.89
-1.00
-0.34
-0.50
0.31
o
o
^41
1978
-0.51
-1.00
1.00
1.00
1.00
1.00
0.00
0.20
1.00
0.00
0.00
1.00
0.00
0.93
0.15
0.00
-1.00
1.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.82
1.00
1.00
0.00
0.00
1.00
0.00
0.00
0.46
0.00
1.00
0.00
0.14
O
o
1
SITC
511
512
513
514
515
516
519
522
523
524
525
531
532
533
541
542
551
553
554
562
571
572
573
574
575
577
579
581
582
583
584
585
591
592
593
597
598
611
612
613
621
1.00
0.47
1.00
-1.00
1.00
-0.39
-0.52
0.15
0.00
-1.00
0.57
0.94
0.04
0.00
0.00
-0.72
0.40
0.00
-1.00
-0.81
0.81
0.88
0.00
0.12
1991
0.00
-0.78
0.93
-0.52
0.40
0.79
0.00
0.41
0.95
-0.20
0.00
0.96
-1.00
-0.56
-0.15
-0.46
-1.00
0.98
-0.18
0.00
-0.01
1.00
0.82
0.66
-0.25
0.00
0.00
0.58
0.76
1.00
0.00
0.00
-0.98
-0.58
0.00
-1.00
-0.50
0.98
1.00
-1.00
0.02
1978
49.4
0.0
0.0
0.0
0.0
0.0
0.0
80.0
0.0
0.0
0.0
0.0
0.0
6.9
84.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
17.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
53.7
0.0
0.0
0.0
85.7
1982
0.0
65.2
0.0
56.1
0.0
0.0
0.0
3.8
3.3
0.0
0.0
0.0
0.0
2.5
64.0
0.0
0.0
48.5
23.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
90.7
22.9
0.0
0.0
8.4
0.0
0.0
0.0
14.0
60.6
0.0
0.0
71.9
IIT I
1985
11.7
2.4
3.1
53.1
30.3
0.0
0.0
78.7
0.0
0.0
0.0
3.6
0.0
34.1
69.5
0.0
0.0
10.8
97.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
20.2
87.5
0.0
0.0
0.0
20.0
0.0
0.0
7.0
8.6
0.0
0.0
31.4
1988
17.4
5.3
13.3
35.2
86.0
0.5
0.0
99.6
15.0
0.0
0.0
11.0
0.0
66.3
50.2
69.5
0.0
0.0
53.2
0.0
0.0
0.2
61.1
48.5
85.1
0.0
0.0
43.3
6.4
96.0
0.0
0.0
27.9
60.4
0.0
0.4
19.0
18.8
12.5
0.0
88.0
289
1991
99.8
22.1
6.7
47.7
59.8
20.8
0.0
59.3
5.2
79.8
0.0
4.1
0.0
44.4
85.4
53.6
0.0
1.8
82.2
0.0
98.6
0.2
18.2
34.4
75.3
0.0
0.0
42.2
24.3
0.0
0.0
0.0
1.8
41.8
0.0
0.4
50.2
2.5
0.0
0.0
97.5
SITC
625
628
629
633
634
635
641
642
651
652
653
654
655
656
657
658
659
661
662
663
664
665
666
667
668
669
671
672
673
674
675
676
677
678
679
681
682
683
684
685
686
687
689
691
692
1978
0.92
0.99
0.00
0.00
0.00
1.00
1.00
0.79
0.82
-0.02
0.99
1.00
0.00
1.00
0.77
1.00
1.00
1.00
1.00
0.60
1.00
1.00
1.00
0.00
0.00
0.00
1.00
1.00
1.00
1.00
1.00
0.00
1.00
0.60
1.00
0.00
0.00
0.00
0.18
-1.00
0.00
-1.00
0.00
1.00
1.00
1982
1.00
0.83
0.00
1.00
-1.00
-0.24
1.00
-0.17
0.78
0.80
1.00
1.00
0.00
1.00
0.97
1.00
0.89
1.00
0.95
0.86
1.00
1.00
0.98
1.00
0.00
0.00
1.00
0.99
1.00
1.00
1.00
0.00
0.98
0.86
0.99
-1.00
1.00
0.00
1.00
-1.00
0.00
-1.00
0.00
0.78
-0.49
1985
1.00
0.78
0.00
1.00
-0.93
0.97
-0.19
0.99
1.00
0.97
1.00
0.39
1.00
1.00
0.84
1.00
0.98
0.95
0.97
-0.04
0.87
0.71
0.99
-0.76
0.00
0.00
0.00
1.00
1.00
1.00
1.00
1.00
1.00
0.42
1.00
-1.00
0.84
0.00
0.87
-1.00
-1.00
-1.00
0.00
1.00
0.98
1988
0.92
0.00
0.61
0.00
-0.99
0.96
-0.34
-0.12
0.90
0.97
1.00
0.58
1.00
1.00
0.91
0.99
0.97
0.74
0.36
0.77
0.88
0.30
0.97
-0.86
0.00
0.00
-1.00
0.00
0.99
0.41
0.94
0.76
1.00
1.00
0.58
-0.87
0.72
-0.99
0.56
0.00
0.78
-1.00
1.00
0.54
0.91
1991
0.97
0.00
0.64
0.00
-0.98
0.66
-0.14
0.07
0.03
0.74
1.00
0.79
1.00
0.96
0.97
1.00
0.99
0.74
0.08
0.95
-0.83
-0.13
1.00
-0.41
0.00
0.00
-1.00
0.00
1.00
1.00
0.99
0.76
0.97
0.93
0.88
1.00
0.64
0.98
0.56
0.00
1.00
0.18
1.00
0.99
0.51
1978
7.6
1.2
0.0
0.0
0.0
0.0
0.0
21.4
18.3
97.8
0.8
0.0
0.0
0.0
22.6
0.0
0.0
0.0
0.0
40.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
39.6
0.0
0.0
0.0
0.0
81.6
0.0
0.0
0.0
0.0
0.0
0.0
1982
0.0
17.3
0.0
0.0
0.0
76.3
0.0
83.0
22.4
19.8
0.2
0.0
0.0
0.0
2.8
0.0
10.9
0.0
4.6
13.9
0.0
0.0
1.9
0.0
0.0
0.0
0.0
0.8
0.0
0.0
0.0
0.0
1.8
13.8
0.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
22.3
51.2
1985
0.0
26.5
0.0
0.0
5.0
25.8
89.5
0.4
0.0
2.5
0.0
48.6
0.0
0.0
11.3
0.4
0.9
6.1
2.1
76.3
7.1
11.6
0.3
17.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
26.7
0.0
0.0
14.2
0.0
12.2
0.0
72.7
0.0
0.0
0.3
2.8
1988
7.6
0.0
38.9
0.0
0.7
4.1
66.2
87.7
9.7
2.6
0.1
42.4
0.0
0.1
9.3
0.6
3.5
26.2
63.8
22.7
12.5
70.0
2.7
14.3
0.0
0.0
0.0
0.0
0.8
58.8
6.1
24.0
0.0
0.3
41.7
13.3
27.8
1.0
43.8
0.0
21.9
0.0
0.0
46.3
8.9
1991
2.7
0.0
36.4
0.0
2.1
33.8
85.9
93.1
97.0
25.5
0.1
20.7
0.3
3.8
3.3
0.1
0.6
25.8
92.1
4.7
16.5
86.9
0.0
58.8
0.0
0.0
0.0
0.0
0.1
0.0
0.7
24.4
3.2
6.7
12.3
0.0
36.4
1.5
44.4
0.0
0.0
82.1
0.0
0.7
48.6
290
SITC
693
694
695
696
697
699
711
712
713
714
716
718
721
722
723
724
725
726
727
728
731
733
735
736
737
741
742
743
744
745
746
747
748
749
751
752
759
761
762
763
764
771
772
773
774
1978
0.99
1.00
0.94
0.00
1.00
0.84
0.00
0.00
-0.77
1.00
0.50
0.00
1.00
0.00
-1.00
0.77
0.00
-0.82
-1.00
-0.68
0.00
0.00
0.00
0.00
0.13
-0.33
-0.22
-0.12
1.00
0.81
0.00
0.00
0.00
-0.24
-1.00
0.00
-1.00
0.00
0.99
0.98
0.55
0.83
-0.38
1.00
0.33
1982
0.99
0.96
0.29
0.00
1.00
0.79
1.00
0.00
0.10
0.18
-0.85
0.00
0.00
0.00
0.90
0.83
0.00
0.00
0.00
-0.13
0.00
0.00
0.00
0.65
1.00
0.97
0.13
0.20
1.00
1.00
0.00
0.00
0.00
-0.03
-0.58
-0.67
0.73
1.00
1.00
0.77
0.87
-0.56
-0.69
0.90
-0.36
1985
1.00
0.95
-0.82
1.00
0.85
-0.14
-1.00
0.00
-0.42
0.40
-0.56
0.00
0.00
0.00
0.82
0.90
-1.00
1.00
1.00
0.35
0.00
0.00
0.00
-0.38
-1.00
-0.16
0.25
-0.56
0.74
0.92
0.00
0.00
0.00
0.31
1.00
-0.36
0.79
1.00
1.00
0.82
0.82
-0.48
-0.45
0.95
-0.45
1988
0.98
0.54
-0.60
1.00
0.97
0.41
0.43
1.00
-0.20
0.65
-0.86
-1.00
1.00
0.00
0.16
1.00
1.00
0.92
1.00
-0.25
0.89
1.00
-0.11
0.00
0.42
-0.62
0.30
-0.56
0.86
-0.51
-0.81
0.49
0.25
0.80
0.81
-0.74
0.82
1.00
0.99
0.87
0.84
0.05
0.15
0.82
0.08
1991
1.00
0.77
-0.24
1.00
0.75
0.76
-0.24
-0.75
0.24
0 26
-0.40
-1.00
-1.00
0.00
0.04
0.84
0.97
0.51
-0.92
-0.61
0.92
0.26
-0.06
0.00
-0.88
-0.37
0.75
0.00
0.97
-0.36
-0.19
0.33
-0.05
0.86
0.95
-0.44
0.76
0.95
0.75
0.51
0.48
0.71
0.55
0.84
-0.10
1978
0.7
0.4
6.0
0.0
0.2
16.2
0.0
0.0
22.7
0.0
50.0
0.0
0.0
0.0
0.0
22.5
0.0
18.2
0.0
32.4
0.0
0.0
0.0
0.0
87.0
66.7
78.5
87.7
0.0
19.0
0.0
0.0
0.0
76.1
0.0
0.0
0.0
0.0
0.7
1.8
45.4
16.9
62.4
0.4
66.7
1982
0.6
3.7
70.9
0.0
0.1
20.7
0.0
0.0
89.5
82.0
15.3
0.0
0.0
0.0
10.2
17.2
0.0
0.0
0.0
87.1
0.0
0.0
0.0
35.5
0.0
3.0
87.3
80.3
0.4
0.0
0.0
0.0
0.0
96.6
42.1
33.3
26.6
0.2
0.0
23.4
13.4
44.3
30.8
9.8
64.2
1985
0.0
33.1
43.1
0.0
10.6
82.3
7.0
0.0
53.9
51.5
23.1
0.0
0.0
0.0
31.6
2.5
0.0
0.0
0.0
80.4
0.0
0.0
0.0
69.8
50.0
43.7
72.7
34.8
73.9
4.4
0.0
0.0
0.0
40.7
0.0
73.9
17.0
0.2
0.1
2.4
4.0
91.6
70.6
6.8
74.8
1988
1.8
46.4
40.4
0.0
2.6
59.2
56.7
0.0
80.1
34.5
13.5
0.0
0.0
0.0
83.9
0.1
0.0
7.9
0.0
74.8
10.6
0.0
88.6
0.0
57.8
37.6
69.7
44.3
13.6
48.8
19.4
51.1
75.3
19.5
18.7
26.5
18.3
0.1
1.5
12.8
16.2
94.8
85.0
18.5
92.2
291
1991
0.2
22.8
75.7
0.2
25.0
23.7
75.8
25.0
76.1
73.7
59.9
0.0
0.0
0.0
96.5
15.5
2.6
49.3
8.0
38.6
8.2
73.6
93.7
0.0
11.8
63.1
24.6
99.8
2.5
63.8
80.5
66.6
94.6
14.3
5.2
55.7
23.9
4.9
24.7
49.4
52.3
28.7
45.4
16.2
90.2
SITC
775
776
778
781
782
783
784
785
786
791
792
793
811
812
813
821
831
841
842
843
844
845
846
847
848
851
871
872
873
874
881
882
883
884
885
891
892
893
894
895
896
897
898
899
1978
0.91
0.07
0.70
1.00
0.00
0.00
0.85
1.00
1.00
0.05
0.79
0.00
0.00
1.00
0.00
0.83
1.00
0.00
1.00
1.00
1.00
1.00
1.00
1.00
0.42
1.00
1.00
1.00
0.00
-0.50
0.73
0.00
1.00
0.56
0.57
0.00
0.22
0.76
1.00
1.00
0.00
1.00
0.97
1.00
1982
0.65
0.04
0.31
1.00
1.00
1.00
0.86
0.89
0.36
-1.00
0.84
0.78
0.00
1.00
0.00
0.76
1.00
0.00
1.00
0.44
0.00
1.00
1.00
1.00
1.00
1.00
-1.00
1.00
-0.90
0.19
1.00
0.00
0.92
0.18
-0.57
0.00
-0.05
0.99
0.99
0.97
0.00
1.00
0.93
0.99
1985
0.49
0.20
0.10
1.00
0.00
0.00
0.73
1.00
1.00
1.00
0.96
0.26
0.00
-0.02
0.00
0.97
1.00
0.00
1.00
1.00
1.00
1.00
1.00
1.00
0.94
1.00
0.78
-0.66
-0.99
-0.43
0.75
0.07
0.70
0.50
0.78
0.00
-0.40
0.78
0.99
0.93
0.60
1.00
0.94
0.78
1988
0.87
0.48
0.08
1.00
0.00
1.00
1.00
-0.97
1.00
-0.28
0.75
0.83
1.00
0.00
0.00
0.82
1.00
1.00
1.00
1.00
0.99
0.99
1.00
0.00
1.00
0.99
0.88
-0.14
0.33
-0.58
0.66
-0.13
0.76
0.51
-0.01
0.31
-0.54
0.79
0.97
0.74
0.61
0.99
0.93
0.70
1991
0.64
0.73
0.14
1.00
-1.00
1.00
0.96
-0.97
1.00
-1.00
-0.15
0.96
1.00
-0.98
0.97
0.46
0.94
0.64
0.80
0.63
0.37
-0.09
0.94
0.00
0.96
1.00
0.78
-0.72
0.12
-0.73
0.27
-0.96
0.68
0.61
0.97
0.53
-0.81
0.50
0.74
0.46
0.97
0.90
0.77
0.50
1978
9.5
92.7
30.1
0.0
0.0
0.0
15.4
0.0
0.0
94.7
21.0
0.0
0.0
0.0
0.0
16.7
0.0
0.0
0.0
0.0
0.1
0.0
0.0
0.0
57.9
0.0
0.0
0.0
0.0
49.9
26.8
100.0
0.0
44.4
43.3
0.0
77.7
23.7
0.0
0.0
0.0
0.0
3.2
0.0
1982
34.8
95.9
69.0
0.0
0.0
0.0
14.0
10.7
63.6
0.0
16.0
22.1
0.0
0.0
0.0
23.7
0.0
0.0
0.0
56.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
10.1
81.2
0.0
0.0
8.0
81.9
42.9
0.0
94.7
0.9
1.4
2.5
0.0
0.0
6.8
1.4
1985
28.2
50.5
69.3
0.0
0.0
0.0
9.9
0.0
1.8
0.0
70.0
79.0
0.0
41.9
0.0
3.4
0.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
6.9
0.0
2.2
64.2
72.9
77.3
32.6
33.4
17.5
30.1
3.4
0.0
97.2
20.7
0.5
1.8
20.0
0.0
1.8
11.9
1988
13.1
51.9
91.7
0.0
0.0
0.0
0.2
2.6
0.0
71.8
24.6
16.6
0.0
0.0
99.8
18.3
0.2
0.1
0.0
0.0
1.1
1.5
0.0
0.0
0.0
0.7
12.3
85.7
66.7
41.7
34.5
87.3
24.5
48.8
99.0
69.0
46.4
20.7
3.2
25.5
39.4
1.3
6.7
30.1
1991
36.4
26.6
86.4
0.0
0.0
0.0
3.7
2.6
0.0
0.0
85.2
4.5
0.0
2.4
2.6
53.5
5.6
36.0
20.4
37.0
63.5
91.0
6.0
0.0
4.0
0.3
22.2
27.8
88.2
27.0
72.9
4.1
32.1
38.8
3.2
47.2
19.1
50.5
26.1
54.1
2.7
10.0
22.6
49.6
292
4. HONG KONG
1982
0.99
0.32
0.00
0.98
-0.57
-1.00
0.00
-0.98
0.96
0.00
0.00
0.09
-1.00
0.57
0.97
0.00
-0.85
1.00
0.72
1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.83
0.89
0.56
-1.00
0.00
-0.82
0.00
0.00
-0.91
0.17
-1.00
-0.53
0.76
1.00
TSI
1985
1.00
0.99
0.67
0.95
1
o
o
SITC
511
512
513
514
515
516
519
522
523
524
525
531
532
533
541
542
551
553
554
562
571
572
573
574
575
577
579
581
582
583
584
585
591
592
593
597
598
611
612
613
621
625
1978
0.95
-0.68
0.76
1.00
0.23
0.00
0.00
0.00
0.98
0.00
0.00
-0.41
-1.00
-1.00
0.87
0.00
-1.00
0.71
0.39
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.52
0.89
0.52
0.00
0.78
0.44
0.00
0.00
-0.39
-0.45
0.50
-0.64
1.00
1.00
-1.00
0.00
0.75
0.95
0.00
0.00
0.29
0.52
0.90
0.86
0.00
-1.00
0.95
0.90
1.00
0.00
-1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.99
0.99
0.91
-0.85
1.00
0.93
0.00
0.00
-0.83
0.93
0.68
-0.81
1.00
1.00
1988
0.99
-0.83
0.74
0.99
0.22
0.80
0.00
-0.67
0.00
0.67
-1.00
0.81
-1.00
0.97
0.83
0.94
-0.97
0.92
0.77
1.00
0.39
1.00
1.00
0.93
0.92
0.00
0.80
0.99
0.99
0.86
0.00
0.00
0.92
0.73
-1.00
0.43
-0.27
0.93
0.79
0.09
-0.24
1.00
1991
1.00
0.81
0.94
0.97
0.64
0.22
0.00
-0.77
0.61
0.95
1.00
0.84
-1.00
0.98
0.66
0.95
-1.00
0.44
0.28
1.00
0.99
0.95
1.00
0.99
0.98
0.00
-0.56
0.98
0.98
0.93
0.00
0.00
1.00
0.84
1.00
0.95
-0.11
0.92
0.83
-0.37
0.89
0.89
1978
5.4
32.0
24.4
0.0
77.0
0.0
0.0
0.0
1.8
0.0
0.0
59.2
0.0
0.0
13.3
0.0
0.0
28.6
60.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
48.2
11.2
48.3
0.0
21.7
56.0
0.0
0.0
61.4
55.4
50.0
35.5
0.0
0.0
1982
0.5
68.0
100.0
2.4
43.2
0.0
0.0
2.2
4.0
0.0
0.0
90.8
0.0
43.4
2.7
0.0
15.0
0.0
28.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
17.5
11.4
44.4
0.0
0.0
17.8
0.0
0.0
9.4
83.5
0.0
47.4
23.5
0.0
IIT I
1985
0.0
1.4
33.5
5.1
0.0
0.0
0.0
25.4
4.9
0.0
0.0
70.7
47.6
10.0
14.2
0.0
0.0
5.2
10.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.8
0.8
9.0
15.0
0.0
6.6
0.0
0.0
16.6
7.4
32.4
18.8
0.0
0.0
1988
1.3
17.4
26.4
1.2
78.0
19.9
0.0
32.8
99.5
32.6
0.0
19.2
0.0
3.2
17.1
6.1
3.3
7.8
22.5
0.0
61.5
0.3
0.0
7.0
8.1
0.0
20.1
1.4
1.0
13.9
0.0
0.0
7.8
27.0
0.0
57.2
73.5
7.3
20.9
91.1
75.8
0.4
293
1991
0.0
0.0
18.9
6.3
2.7
36.4
78.0
0.0
23.2
38.7
4.5
0.0
16.5
0.0
1.5
34.4
4.6
0.0
55.7
71.8
0.0
0.8
4.9
0.2
0.6
2.3
0.0
43.8
1.6
2.0
6.5
0.0
0.0
0.0
16.4
0.0
4.8
89.0
8.0
17.1
63.2
11.4
SITC
628
629
633
634
635
641
642
651
652
653
654
655
656
657
658
659
661
662
663
664
665
666
667
668
669
671
672
673
674
675
676
677
678
679
681
682
683
684
685
686
687
689
691
692
693
1978
0.98
0.00
-1.00
1.00
0.88
1.00
0.68
0.97
0.36
0.97
0.98
0.97
0.95
0.83
0.94
-0.84
1.00
1.00
0.96
0.93
0.97
-0.74
0.93
0.00
0.00
1.00
1.00
0.75
1.00
1.00
0.00
0.00
1.00
1.00
0.00
0.96
0.00
0.63
-1.00
0.00
-1.00
0.00
0.00
1.00
1.00
1982
0.63
0.00
0.00
0.83
-0.38
1.00
0.40
0.75
0.26
0.97
0.26
0.97
0.37
0.96
0.87
-0.77
1.00
1.00
0.61
0.81
1.00
0.19
0.32
0.00
0.00
-1.00
0.00
0.77
0.99
1.00
1.00
1.00
0.99
1.00
0.00
1.00
0.00
-0.03
0.00
1.00
-1.00
-1.00
0.45
0.09
0.96
1985
0.46
0.00
1.00
1.00
0.92
1.00
0.10
0.83
0.11
0.99
0.51
0.95
0.49
0.96
0.23
-0.73
1.00
0.92
0.84
0.97
0.70
0.96
-0.01
0.00
1.00
-1.00
1.00
1.00
1.00
1.00
0.00
1.00
1.00
0.80
-0.09
0.96
0.00
0.98
-1.00
1.00
-1.00
-1.00
0.91
0.90
1.00
1988
0.00
0.82
-0.50
0.85
0.70
1.00
0.36
0.87
0.65
0.98
0.63
0.97
0.89
0.98
0.55
-0.56
0.97
0.31
0.47
0.97
0.84
0.33
-0.42
0.00
0.00
-0.99
1.00
0.99
1.00
0.97
0.97
0.89
1.00
0.98
-0.89
0.77
-0.93
0.29
-1.00
0.88
-0.45
-0.99
0.75
0.76
0.98
1991
0.00
0.97
0.00
0.89
0.12
1.00
-0.02
0.90
0.75
0.98
0.79
0.99
0.90
0.98
0.47
0.82
0.72
-0.11
0.84
0.80
0.75
0.64
-0.38
0.00
0.00
-0.88
1.00
1.00
1.00
1.00
1.00
0.92
1.00
0.95
0.50
0.95
0.87
0.90
-1.00
1.00
-0.99
-1.00
0.99
-0.41
0.99
1978
1.6
0.0
0.0
0.0
11.8
0.2
31.7
3.1
64.5
3.3
2.3
2.6
5.3
17.1
6.3
16.0
0.0
0.0
4.5
7.4
2.6
25.9
7.1
0.0
0.0
0.0
0.0
25.0
0.0
0.0
0.0
0.0
0.2
0.0
0.0
3.5
0.0
37.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1982
37.1
0.0
0.0
16.5
61.6
0.1
59.6
25.4
74.4
2.9
74.2
3.1
62.7
4.4
12.7
22.7
0.0
0.0
39.4
18.9
0.4
80.5
68.4
0.0
0.0
0.0
0.0
22.6
0.7
0.0
0.0
0.0
1.1
0.0
0.0
0.2
0.0
96.8
0.0
0.0
0.0
0.0
54.9
90.9
4.0
1985
54.5
0.0
0.0
0.0
8.1
0.1
90.0
17.4
88.6
1.3
49.5
5.3
51.4
4.5
76.8
27.5
0.1
7.6
15.6
3.2
30.1
4.3
99.1
0.0
0.0
0.0
0.0
0.0
0.2
0.0
0.0
0.0
O.l
20.0
90.9
3.6
0.0
1.5
0.0
0.0
0.0
0.0
8.9
10.0
0.3
1988
0.0
17.8
50.0
15.5
30.0
0.2
64.2
13.3
34.7
2.0
37.0
2.7
11.1
2.0
44.6
43.6
3.5
69.0
52.8
3.4
15.8
67.4
58.1
0.0
0.0
0.5
0.0
0.8
0.0
3.2
3.3
10.5
0.3
2.2
11.3
23.0
6.9
71.1
0.0
11.5
54.8
1.0
25.0
24.4
1.6
1991
11.3
0.0
2.8
0.0
11.2
87.9
0.2
98.4
10.1
25.2
2.0
21.2
0.9
10.0
2.0
52.8
17.6
27.8
88.6
15.9
19.9
24.6
36.1
61.5
0.0
0.0
12.1
0.0
0.0
0.0
0.1
0.0
8.1
0.1
5.1
50.2
4.6
13.3
9.7
0.0
0.0
0.9
0.0
0.8
58.6
294
SITC
694
695
696
697
699
711
712
713
714
716
718
721
722
723
724
725
726
727
728
731
733
735
736
737
741
742
743
744
745
746
747
748
749
751
752
759
761
762
763
764
771
772
773
774
775
1978
0.97
0.30
0.98
0.69
0.06
0.00
0.00
-0.80
0.00
-0.94
0.00
0.00
0.00
0.00
0.68
0.00
0.00
-0.98
-0.93
0.00
0.00
0.00
0.64
-0.74
0.19
0.33
-1.00
-1.00
0.88
0.00
0.00
0.00
0.53
0.81
1.00
-0.40
0.22
0.49
0.68
0.82
0.47
0.50
0.97
0.37
0.82
1982
0.11
-0.53
0.69
0.60
0.20
0.00
0.00
-0.67
-0.82
-0.65
0.00
0.00
0.00
1.00
0.80
0.00
-0.92
0.00
-0.90
0.00
0.00
0.00
-0.21
-0.65
0.88
0.49
0.66
0.00
0.13
0.00
0.00
0.00
0.03
0.14
-0.18
-0.13
0.99
1.00
0.94
0.88
0.77
0.46
1.00
-1.00
0.80
1985
0.65
-0.35
0.91
0.86
0.64
1.00
0.00
-0.64
1.00
0.33
-0.99
0.00
0.00
-0.99
0.99
0.97
-0.84
1.00
-0.75
0.00
0.00
0.00
0.69
-0.28
0.92
-1.00
0.87
1.00
-0.14
0.00
0.00
0.00
0.62
0.68
0.64
0.29
1.00
1.00
0.73
0.93
0.73
0.42
0.85
-0.45
0.91
1988
0.57
0.79
-0.02
0.75
0.77
1.00
1.00
-0.54
-0.71
-0.04
-0.14
-1.00
0.00
-0.75
0.96
0.76
-0.44
1.00
0.57
0.89
1.00
0.60
0.00
0.15
0.99
0.94
0.97
0.99
-0.08
-0.88
0.93
0.14
0.78
-0.03
0.27
-0.51
1.00
0.98
1.00
0.59
0.78
0.21
0.89
-0.99
1.00
1991
0.90
0.52
0.24
0.65
0.50
1.00
1.00
0.87
0.00
-0.45
0.97
0.00
0.00
-0.74
0.95
0.96
-0.04
0.93
0.33
0.69
0.69
-0.61
0.00
-0.49
0.97
0.47
0.95
0.55
0.06
-0.02
0.96
0.67
0.95
-0.04
0.49
0.59
1.00
0.97
0.74
0.62
0.56
0.48
0.88
0.48
0.82
1978
3.4
69.5
1.8
30.7
93.7
0.0
0.0
20.0
0.0
5.6
0.0
0.0
0.0
0.0
31.6
0.0
0.0
2.3
7.3
0.0
0.0
0.0
36.0
26.4
81.3
66.7
0.0
0.0
11.8
0.0
0.0
0.0
46.6
19.0
0.0
60.0
77.6
51.1
32.5
17.9
52.6
50.2
2.7
62.7
18.0
1982
89.2
46.5
30.8
40.0
79.7
0.0
0.0
32.5
18.2
35.1
0.0
0.0
0.0
0.0
20.3
0.0
8.3
0.0
10.4
0.0
0.0
0.0
79.1
34.8
12.5
50.7
33.9
0.0
86.6
0.0
0.0
0.0
96.8
86.0
81.6
87.1
0.6
0.1
6.0
12.0
23.2
54.2
0.5
0.0
20.3
1985
35.0
65.2
9.0
13.5
35.8
0.0
0.0
36.1
0.0
67.1
0.6
0.0
0.0
0.5
0.6
2.6
15.6
0.0
25.0
0.0
0.0
0.0
30.8
71.8
8.5
0.0
12.8
0.0
86.5
0.0
0.0
0.0
37.6
32.0
36.4
70.9
0.1
0.1
26.8
6.8
26.9
58.0
14.5
54.7
9.0
1988
42.7
21.1
98.4
24.6
23.1
0.0
0.0
46.3
29.0
95.7
85.7
0.0
0.0
25.0
4.2
24.5
56.0
0.0
43.4
10.9
0.3
40.2
0.0
85.5
1.4
6.4
3.2
1.1
92.0
11.6
7.0
86.3
22.2
97.2
73.0
48.5
0.2
1.6
0.3
40.9
22.2
79.0
11.0
1.2
0.1
295
1991
0.7
9.9
47.7
76.4
35.4
50.3
0.0
0.0
13.0
99.6
55.4
3.5
0.0
0.0
26.2
4.9
3.6
96.4
6.5
67.5
30.6
30.6
39.4
0.0
50.5
3.3
53.4
5.1
45.1
94.3
97.8
4.0
32.7
5.3
95.5
50.7
41.2
0.2
2.7
25.9
38.4
43.6
51.6
11.8
52.1
SITC
776
778
781
782
783
784
785
786
791
792
793
811
812
813
821
831
841
842
843
844
845
846
847
848
851
871
872
873
874
881
882
883
884
885
891
892
893
894
895
896
897
898
899
1978
0.65
0.82
0.60
0.00
0.00
-0.22
1.00
1.00
1.00
1.00
0.00
0.00
0.66
0.00
0.25
0.98
0.00
1.00
0.99
0.99
1.00
1.00
0.95
0.21
1.00
0.26
-1.00
-1.00
0.75
-1.00
0.00
0.21
0.88
0.64
0.00
-0.93
0.62
-0.24
0.36
0.00
0.33
0.53
0.41
1982
0.66
0.73
0.94
0.00
0.00
1.00
1.00
1.00
0.00
0.98
-1.00
0.00
0.27
0.00
0.70
0.99
0.00
0.99
0.88
1.00
1.00
1.00
0.94
0.82
1.00
-0.11
0.59
1.00
0.08
-0.03
-0.15
-0.05
0.81
0.95
0.00
-0.13
0.66
0.93
0.50
1.00
-0.36
0.93
0.72
1985
0.27
0.85
0.99
1.00
1.00
0.89
1.00
1.00
0.00
-0.95
0.13
0.00
-0.48
0.00
0.85
0.98
0.00
0.99
0.82
0.99
0.92
1.00
0.81
0.88
0.99
0.97
0.03
1.00
0.43
0.55
-0.25
-0.24
0.88
0.76
0.00
-0.56
0.88
0.67
0.42
0.98
0.16
0.97
0.88
1988
0.49
0.73
0.08
0.03
1.00
0.98
0.85
0.99
0.38
0.68
0.35
0.00
-0.78
-0.49
0.94
0.85
0.98
0.88
0.96
0.92
0.75
0.93
0.00
0.89
1.00
0.84
0.79
-0.89
0.49
0.01
0.81
-0.37
0.98
0.27
0.17
-0.28
0.76
0.75
0.57
0.52
0.92
0.97
0.77
1991
0.28
0.57
1.00
0.00
1.00
1.00
0.94
1.00
0.00
-0.42
0.96
1.00
-0.95
-0.22
0.86
0.92
0.59
0.55
0.84
0.15
0.15
0.95
0.00
0.54
0.99
0.57
0.48
0.57
0.09
-0.42
0.19
-0.93
0.92
0.17
-0.69
-0.14
0.70
0.80
0.53
0.57
0.63
0.87
0.65
1978
34.7
18.0
40.0
0.0
0.0
77.8
0.0
0.1
0.0
0.1
0.0
0.0
33.6
0.0
75.4
2.0
0.0
0.2
1.0
0.8
0.0
0.0
5.5
78.8
0.0
74.4
0.0
0.0
24.6
0.0
100.0
79.3
11.8
35.7
0.0
7.0
37.7
76.3
64.3
0.0
67.0
46.6
59.2
1982
34.2
26.6
5.8
0.0
0.0
0.0
0.0
0.0
0.0
2.0
0.0
0.0
73.3
0.0
30.5
0.6
0.0
0.9
11.9
0.2
0.2
0.0
5.6
18.3
0.0
88.9
40.8
0.0
92.5
96.8
85.0
95.3
19.0
5.1
0.0
87.2
33.8
6.6
49.7
0.2
64.0
6.6
28.4
1985
73.3
14.6
0.8
0.0
0.0
10.8
0.0
0.0
0.0
5.3
86.5
0.0
51.7
0.0
14.6
1.6
0.0
1.5
18.3
1.3
7.7
0.0
19.1
12.5
0.6
3.3
96.6
0.0
57.1
45.1
74.5
76.2
12.4
24.4
0.0
44.4
12.4
32.6
58.2
1.6
84.2
2.7
12.0
1988
51.4
27.5
92.3
97.5
0.0
1.8
14.7
0.6
61.5
32.3
65.3
0.0
21.5
51.2
5.6
15.4
2.2
12.2
4.5
8.1
25.1
6.5
0.0
11.1
0.2
15.6
20.8
10.8
50.5
98.7
19.3
63.3
1.6
72.7
83.3
72.3
23.9
24.9
43.0
47.7
8.4
3.2
22.7
296
1991
17.6
72.0
43.4
0.0
0.0
0.0
0.2
6.4
0.2
0.0
58.5
4.1
0.0
4.8
77.9
14.2
8.1
41 3
45.2
15.8
85.1
84.7
4.5
0.0
46.0
1.5
43.1
52.5
43.0
90.7
58.0
80.8
6.6
8.2
82.8
31.1
86.5
30.5
19.8
47.1
43.0
36.6
13.1
5.TAIWAN
SITC
511
512
513
514
515
516
519
522
523
524
525
531
532
533
541
542
551
553
554
562
571
572
573
574
575
577
579
581
582
583
584
585
591
592
593
597
598
611
612
613
621
625
1978
1.00
0.65
0.58
0.99
0.77
-0.92
0.00
-0.92
-0.36
0.00
0.00
0.86
0.00
-0.56
0.81
0.00
-1.00
-1.00
-0.25
1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.85
-0.88
-0.28
-1.00
-0.68
-1.00
0.00
0.00
0.06
-0.90
-1.00
0.00
-0.89
0.97
1982
-0.98
-0.94
-0.53
-0.29
-0.52
-0.99
0.00
-0.62
-0.34
0.00
0.00
0.51
0.00
0.05
0.80
0.00
-1.00
0.00
-0.63
1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.12
-0.65
1.00
-0.99
-1.00
-1.00
0.00
0.00
0.10
-0.71
-0.76
0.00
-1.00
0.64
TSI
1985
0.23
-0.45
-0.90
-0.62
0.46
1.00
0.00
0.33
0.57
0.00
0.00
-0.02
0.00
-0.73
-0.90
0.00
1.00
0.00
-0.96
-0.49
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.70
-0.08
-0.41
1.00
0.23
0.43
0.00
0.00
0.11
0.89
1.00
1.00
0.36
-1.00
1988
0.98
-0.51
0.60
0.32
-0.09
0.46
0.00
-0.65
-0.76
0.00
0.00
0.01
0.00
0.32
0.97
0.00
-1.00
-1.00
0.87
1.00
0.00
-1.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.85
-0.24
0.54
-1.00
0.68
-1.00
0.00
0.00
-0.02
-0.92
-1.00
-1.00
-0.88
0.93
1991
-0.94
-0.90
-0.03
-0.25
0.07
0.87
0.00
0.39
0.77
0.00
0.00
0.03
1.00
0.66
-0.80
0.00
1.00
1.00
-0.61
-1.00
0.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.49
0.39
0.15
1.00
-0.90
1.00
0.00
0.00
-0.29
0.91
0.44
-0.35
0.16
-0.76
1978
0.0
34.9
41.7
1.3
22.8
7.6
0.0
7.7
64.2
0.0
0.0
14.2
0.0
44.0
18.8
0.0
0.0
0.0
75.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
15.4
12.3
71.8
0.0
32.4
0.0
0.0
0.0
94.3
9.9
0.0
0.0
11.0
2.6
1982
80.3
40.9
14.3
84.8
42.1
0.0
0.0
36.3
53.6
0.0
0.0
90.2
0.0
18.9
4.3
0.0
0.0
0.0
43.5
50.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
85.9
59.3
34.8
0.0
64.9
91.1
0.0
0.0
85.6
8.7
0.0
0.0
5.6
0.0
IITI
1985
8.2
1.7
77.5
94.6
94.9
14.3
0.0
97.3
21.8
0.0
0.0
94.2
0.0
60.9
42.6
0.0
0.0
0.0
94.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
95.4
44.1
56.1
0.0
10.9
0.0
0.0
0.0
78.5
15.7
55.6
41.0
59.9
0.0
1988
77.9
30.5
72.2
82.5
61.8
39.7
0.0
41.8
95.6
11.1
0.0
82.8
0.6
0.0
43.4
0.7
0.0
20.6
72.8
0.0
48.5
74.5
1.8
84.0
99.4
0.0
8.1
74.3
56.9
71.2
0.0
0.0
2.8
92.2
0.0
0.0
44.3
47.2
21.6
0.0
99.3
3.0
1991
4.1
64.1
29.4
45.1
91.4
92.7
0.0
51.7
78.5
11.2
0.0
94.0
0.0
0.0
37.0
18.5
14.3
78.4
57.0
0.0
45.1
41.5
78.0
69.6
65.8
0.0
71.7
64.6
75.4
30.3
0.0
0.0
1.3
78.4
0.0
42.7
88.3
51.9
2.4
22.1
28.6
33.8
297
su e
628
629
633
634
635
641
642
651
652
653
654
655
656
657
658
659
661
662
663
664
665
666
667
668
669
671
672
673
674
675
676
677
678
679
681
682
683
684
685
686
687
689
691
692
693
1978
0.19
0.00
0.00
0.97
-0.98
0.73
1.00
-0.84
-0.71
0.72
0.55
-0.75
-0.95
-0.75
1.00
-1.00
1.00
-1.00
0.69
-0.99
-0.62
-1.00
1.00
0.00
0.00
1.00
0.16
-0.87
1.00
0.00
-1.00
-0.26
0.93
1.00
1.00
0.71
0.00
0.98
-1.00
1.00
-1.00
0.00
0.00
-1.00
1.00
1982
0.22
0.00
0.00
-0.45
-1.00
-0.93
0.15
-0.19
-0.67
0.67
-0.96
0.53
-1.00
-0.81
0.49
-1.00
-0.56
-0.20
0.95
-0.45
0.30
-0.99
1.00
0.00
0.00
0.99
1.00
-0.41
1.00
0.00
0.99
0.90
0.87
1.00
1.00
0.99
0.00
0.99
1 AA
-i.w
1.00
0.00
1.00
1.00
0.03
1.00
1985
0.74
0.00
-0.89
0.96
0.74
1.00
1.00
0.96
0.61
-0.20
0.68
0.69
-0.22
0.72
0.02
1.00
0.98
0.00
-0.87
0.45
-0.86
-0.01
-0.74
0.00
1.00
0.42
-0.85
0.65
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-0.97
1.00
-1.00
1.00
0.00
-1.00
-0.99
-1.00
1988
0.39
0.00
-1.00
-0.96
-0.94
-0.99
0.52
-0.73
0.21
0.36
-0.68
-0.25
-0.98
-0.75
-0.97
-1.00
-1.00
-1.00
0.70
-0.65
0.65
0.72
-1.00
0.00
0.00
-0.89
-0.71
-0.76
1.00
0.00
1.00
0.63
-0.87
1.00
1.00
0.67
0.00
0.94
-1.00
0.00
-1.00
-0.28
1.00
1.00
1.00
1991
-0.37
0.00
-1.00
0.37
0.97
0.97
-0.84
0.76
-0.34
-0.12
0.49
0.47
0.80
0.61
0.91
1.00
0.99
1.00
-0.43
0.95
-0.11
0.31
0.92
0.00
1.00
1.00
0.88
-0.27
-1.00
-1.00
-1.00
-1.00
-0.41
0.00
0.00
-0.52
0.00
-0.82
1.00
-1.00
1.00
1.00
-0.05
-0.36
-0.83
1978
81.5
0.0
0.0
3.4
1.6
26.6
0.0
15.6
28.8
27.6
45.4
25.4
5.4
24.9
0.0
0.0
0.0
0.0
31.2
1.3
37.8
0.0
0.0
0.0
0.0
0.0
83.8
13.5
0.0
0.0
0.0
73.8
7.1
0.0
0.0
28.6
0.0
2.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1982
32.1
0.0
0.0
4.6
17.7
0.2
0.0
2.8
47.8
60.9
44.9
9.9
53.0
31.5
91.4
0.0
2.4
0.0
10.4
69.5
3.0
80.9
0.0
0.0
0.0
62.7
29.5
29.2
1.0
0.0
0.0
0.0
71.4
51.9
0.0
3.4
0.0
3.0
0.0
0.0
0.0
0.0
1.2
0.0
0.0
1985
52.6
0.0
0.0
79.8
5.1
2.1
8.5
26.9
66.1
86.4
47.5
39.4
20.0
45.2
7.2
0.0
0.4
0.0
36.2
5.7
89.2
76.7
5.6
0.0
0.0
0.0
10.4
59.0
81.0
0.0
0.0
0.0
95.2
0.0
0.0
59.7
0.0
30.0
0.0
0.0
0.0
0.0
20.0
0.0
31.0
1988
0.0
92.0
0.0
2.2
73.2
91.8
55.5
34.2
99.9
97.2
46.2
64.1
61.3
67.9
92.9
6.9
53.8
2.4
24.2
39.2
100.0
87.6
12.4
0.0
0.0
5.6
26.9
81.7
100.0
67.6
62.6
0.0
3.2
11.1
0.0
52.7
0.0
82.1
25.6
12.8
69.6
5.1
29.7
5.9
53.8
298
1991
0.0
64.4
0.0
2.1
67.0
50.9
98.7
60.0
89.5
54.8
41.2
64.3
36.1
78.3
53.5
8.0
30.8
0.2
63.4
94.6
51.1
98.9
34.8
0.0
0.0
0.0
14.2
90.3
0.1
5.1
33.9
0.0
36.8
30.3
1.3
66.4
5.3
69.1
51.6
36.4
0.0
30.6
14.1
32.8
15.1
SITC
694
695
696
697
699
711
712
713
714
716
718
721
722
723
724
725
726
727
728
731
733
735
736
737
741
742
743
744
745
746
747
748
749
751
752
759
761
762
763
764
771
772
773
774
775
1978
-1.00
0.04
0.75
0.26
-0.04
0.00
0.00
-0.85
0.00
-0.31
0.00
1.00
1.00
0.00
0.82
0.00
-1.00
-1.00
-0.66
0.00
0.00
0.00
-1.00
-1.00
-0.17
1.00
-1.00
-1.00
-1.00
0.00
0.00
0.00
0.67
0.20
1.00
0.17
-1.00
0.73
-0.95
-0.70
-0.76
-0.54
-0.19
-0.50
-0.65
1982
-0.68
-0.37
-0.16
-0.14
-0.10
0.00
0.00
-0.92
-0.21
-0.92
0.00
0.33
0.00
1.00
-0.26
-1.00
0.00
-1.00
-1.00
0.00
0.00
0.00
-0.80
0.51
-0.78
-1.00
-1.00
-1.00
-1.00
0.00
0.00
o.co
0.00
-0.18
0.00
-0.12
0.85
-0.42
-0.32
-0.71
-0.33
-0.50
-0.84
1.00
-0.71
1985
1.00
0.86
0.82
-0.40
-0.30
0.00
0.00
0.99
0.71
1.00
1.00
0.00
0.00
-1.00
-0.12
1.00
-1.00
0.00
0.91
0.00
0.00
0.00
0.81
0.03
0.00
-0.20
-0.30
-0.45
0.92
0.00
0.00
0.00
-0.42
-0.38
1.00
-1.00
-0.86
1.00
0.94
0.31
0.29
0.58
0.41
0.53
0.84
1988
-1.00
-0.94
-0.70
0.34
0.10
0.00
0.00
-1.00
0.63
-1.00
-0.31
0.00
0.00
0.23
0.09
-0.37
-1.00
-0.76
-0.16
0.00
O.OC
0.00
-0.86
-0.53
-0.46
-0.91
-0.79
0.95
-0.93
0.00
0.00
0.00
0.18
0.87
-1.00
0.42
0.29
0.52
-1.00
-0.60
0.03
-0.51
-0.73
1.00
-0.84
1991
1.00
0.79
0.60
0.69
0.31
0.00
0.00
0.88
1.00
0.99
0.00
1.00
0.00
0.00
0.54
1.00
1.00
1.00
0.43
0.00
0.00
0.00
0.86
-0.43
0.28
0.96
-0.22
-0.62
0.87
0.00
0.00
0.00
0.48
-0.99
0.95
0.23
-0.51
-1.00
0.34
0.58
0.11
0.57
0.93
0.46
0.85
1978
0.0
95.5
25.0
73.7
95.9
0.0
0.0
15.4
0.0
68.6
0.0
0.0
0.0
0.0
17.5
0.0
0.0
0.0
34.0
0.0
0.0
0.0
0.0
0.0
83.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
32.9
80.0
0.0
83.1
0.0
26.9
4.8
29.6
24.2
45.6
80.9
50.0
34.6
1982
0.0
7.5
8.8
56.6
77.6
0.0
0.0
0.3
0.0
0.3
0.0
0.0
0.0
0.0
58.3
0.0
0.0
0.0
7.9
0.0
0.0
0.0
28.8
64.6
6.9
17.1
61.2
22.2
9.9
0.0
0.0
0.0
79.8
24.1
0.0
71.4
1.6
0.0
9.7
66.7
58.9
21.8
37.4
85.7
13.5
1985
0.0
22.5
55.5
34.6
61.3
0.0
0.0
13.0
0.0
0.6
0.0
0.0
0.0
0.0
54.1
0.0
0.0
0.0
39.6
0.0
0.0
0.0
6.5
57.9
20.9
4.7
87.8
93.4
10.6
0.0
0.0
0.0
68.8
29.3
5.6
51.2
5.4
0.0
54.0
35.6
60.8
38.5
8.2
70.6
23.3
1988
15.5
52.1
14.7
78.3
97.3
0.0
0.0
25.4
0.0
4.6
33.3
6.3
0.0
1.4
49.7
27.9
25.7
71.8
75.4
2.6
34.3
7.9
0.0
92.9
18.4
95.0
61.6
94.3
57.5
63.8
37.7
50.4
40.4
51.8
12.5
55.2
0.0
0.7
50.3
67.4
67.9
31.6
9.6
64.3
4.1
1991
20.3
21.5
25.6
58.0
80.0
10.6
0.0
88.9
0.0
8.0
9.3
18.8
0.0
85.0
86.3
89.0
23.5
39.3
45.0
1.9
10.4
33.5
0.0
32.2
39.2
16.1
92.5
58.4
16.6
27.7
80.4
26.0
58.2
34.6
18.0
31.4
0.2
8.3
82.5
71.0
83.2
50.7
41.3
73.6
20.7
299
1.00
0.04
0.48
-0.19
0.00
-0.64
1.00
0.50
-0.04
-1.00
-0.88
0.77
-0.66
0.00
0.18
0.82
-0.18
-0.22
-0.50
-1.00
-0.94
0.60
1988
-0.34
-0.40
1.00
0.95
1.00
0.90
-0.99
-1.00
1.00
0.89
0.00
0.00
-1.00
0.00
-0.96
-0.93
0.00
1.00
0.00
0.00
1.00
0.00
-0.86
-0.61
-1.00
-0.13
0.87
-0.90
-0.53
-0.82
1.00
0.61
-0.78
0.41
0.00
-0.31
-0.84
-0.39
-0.86
0.00
0.63
0.87
-0.57
1991
0.40
0.66
-1.00
0.00
-1.00
-0.48
1.00
-0.99
-1.00
-0.87
0.98
0.00
0.67
0.00
0.96
0.69
0.00
-0.38
-1.00
0.00
1985
0.40
0.28
-1.00
0.00
0.00
-0.85
1.00
-1.00
0.94
0.89
-1.00
0.00
-0.89
0.00
0.38
1.00
0.00
1.00
1.00
0.00
1
>*
1982
-0.54
-0.35
1.00
1.00
1.00
1.00
-0.99
0.47
0.03
0.28
0.00
0.00
-1.00
0.00
-0.95
0.00
0.00
1.00
0.00
0.00
1.00
0.00
0.63
0.45
-1.00
0.00
-0.07
-1.00
-0.71
-0.69
1.00
1.00
-0.06
0.99
0.00
-0.60
0.07
-0.58
0.33
0.00
0.81
0.86
-0.93
1978
-0.75
-0.55
-0.17
1.00
0.00
1.00
-1.00
1.00
1.00
-0.10
-1.00
0.00
0.00
0.00
-0.41
0.00
0.00
1.00
0.00
0.98
1.00
0.00
1.00
-1.00
0.00
-1.00
1.00
-1.00
-0.48
-0.44
1.00
-0.04
0.65
0.86
0.00
-0.87
-0.39
0.62
1.00
-0.20
1.00
0.96
-1.00
SITC
776
778
781
782
783
784
785
786
791
792
793
811
812
813
821
831
841
842
843
844
845
846
847
848
851
871
872
873
874
881
882
883
884
885
891
892
893
894
895
896
897
898
899
0.50
0.92
0.58
1.00
-0.90
1.00
1.00
0.73
0.98
0.79
-1.00
0.92
0.56
0.00
-0.26
-0.27
0.44
0.01
-0.42
-0.10
-0.93
0.82
1978
25.2
44.6
83.3
0.0
0.0
0.0
0.0
0.0
0.0
90.0
0.0
0.0
0.0
0.0
59.3
0.0
0.0
0.0
0.0
1.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
51.7
55.6
0.0
96.0
35.0
13.5
0.0
13.0
61.0
38.5
0.0
80.0
0.0
4.3
0.3
1982
78.2
75.6
0.0
0.0
0.0
0.0
0.0
2.1
4.6
9.6
0.0
0.0
75.0
0.0
60.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
87.0
89.4
86.3
0.0
61.5
0.0
92.2
47.9
0.0
4.3
5.6
7.0
0.0
72.5
19.2
90.0
24.9
35.3
6.7
15.2
39.2
1985
76.5
28.8
0.0
0.0
0.0
50.7
0.0
0.3
0.0
26.6
97.4
0.0
80.0
0.0
7.6
19.8
0.0
0.0
0.0
0.0
0.0
21.3
31.6
21.1
0.0
26.8
0.0
0.0
30.3
2.8
34.5
74.5
5.2
12.4
0.0
98.4
68.1
88.7
9.9
63.0
77.8
17.2
22.0
1988
79.3
74.6
0.0
0.0
0.0
2.5
1.7
2.5
0.0
33.3
55.6
0.0
6.6
78.5
51.1
38.2
0.0
0.8
0.0
4.0
4.0
9.4
0.0
91.2
86.0
9.2
44.2
35.0
70.0
22.8
53.3
97.1
43.5
67.0
0.0
76.1
44.6
54.7
18.8
8.4
91.7
33.1
44.7
1991
85.7
88.8
0.0
0.0
0.0
99.1
0.4
9.4
0.0
97.1
2.9
0.0
0.8
40.4
66.2
73.8
9.1
22.2
13.2
90.6
94.1
12.3
0.0
79.5
81.6
99.9
65.7
0.0
50.8
20.1
50.9
36.7
48.7
67.2
4.1
99.4
59.4
45.7
81.4
66.3
68.6
51.9
28.1
300
6. THAILAND
1978
1.00
1.00
1.00
1.00
1.00
0.00
0.00
1.00
0.25
0.00
0.00
1.00
0.92
0.00
1.00
0.00
0.00
0.00
1.00
1.00
0.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
1.00
0.95
1.00
1.00
1.00
-1.00
0.00
0.00
1.00
-1.00
0.00
0.00
1.00
0.21
1982
0.89
1.00
1.00
1.00
0.89
0.00
0.00
1.00
1.00
0.00
0.00
1.00
1.00
0.00
1.00
0.00
0.00
1.00
0.86
1.00
0.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
1.00
1.00
1.00
-0.29
0.41
-0.94
0.00
0.00
0.87
-1.00
1.00
0.00
0.91
0.57
TSI
1985
1.00
1.00
1.00
1.00
1.00
-1.00
0.00
1.00
1.00
o
o
1
SITC
511
512
513
514
515
516
519
522
523
524
525
531
532
533
541
542
551
553
554
562
571
572
573
574
575
577
579
581
582
583
584
585
591
592
593
597
598
611
612
613
621
625
0.00
-0.49
-0.51
-1.00
0.92
0.00
0.00
0.00
0.96
1.00
0.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
1.00
1.00
1.00
-1.00
1.00
0.70
0.00
0.00
0.98
-0.71
1.00
-1.00
1.00
0.99
1988
1.00
1.00
0.68
1.00
0.97
0.91
0.00
0.99
0.87
1.00
0.00
0.13
-1.00
1.00
0.99
1.00
-1.00
0.51
0.73
1.00
0.00
1.00
1.00
0.96
1.00
0.00
-1.00
0.84
0.99
1.00
0.00
0.00
0.93
0.83
1.00
1.00
0.51
0.80
1.00
0.00
0.38
0.97
1991
1.00
1.00
0.94
0.94
0.97
0.96
0.00
1.00
0.99
0.00
0.00
-0.01
1.00
1.00
0.92
1.00
0.00
1.00
0.62
1.00
1.00
1.00
1.00
0.84
0.99
0.00
1.00
0.98
-0.20
1.00
0.00
0.00
0.95
-0.60
1.00
0.94
0.80
0.96
1.00
0.00
0.29
0.97
1978
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
75.0
0.0
0.0
0.0
8.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
5.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
78.8
1982
10.9
0.0
0.0
0.0
10.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
14.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
71.4
59.2
6.2
0.0
0.0
13.0
0.0
0.0
0.0
8.7
42.7
H TI
1985
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
51.1
49.2
0.0
8.1
0.0
0.0
0.0
3.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.1
0.0
0.0
0.0
30.4
0.0
0.0
2.1
28.6
0.0
0.0
0.0
0.9
1988
0.0
0.0
32.1
0.0
2.7
9.0
0.0
0.7
12.7
0.0
0.0
86.7
0.0
0.0
1.1
0.0
0.0
49.4
27.1
0.0
0.0
0.0
0.0
4.5
0.2
0.0
0.0
16.5
0.7
0.0
0.0
0.0
6.8
16.9
0.0
0.0
48.8
20.4
0.0
0.0
62.1
2.8
301
1991
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
89.0
97.6
0.0
6.5
0.0
0.0
0.0
0.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.1
0.0
30.8
0.0
27.1
0.0
0.0
0.5
83.9
0.0
0.0
0.0
0.7
su e
628
629
633
634
635
641
642
651
652
653
654
655
656
657
658
659
661
662
663
664
665
666
667
668
671
672
673
674
675
676
677
678
679
681
682
683
684
685
686
687
689
691
692
693
694
1978
1.00
0.00
0.00
0.00
-0.88
1.00
1.00
-0.13
-0.81
0.99
1.00
1.00
1.00
1.00
-0.89
-1.00
0.00
-0.98
1.00
-0.50
1.00
-0.51
1.00
0.00
0.00
1.00
0.07
1.00
1.00
1.00
1.00
1.00
0.00
0.00
0.00
0.00
-1.00
0.00
0.00
-1.00
0.00
0.00
1.00
0.63
1.00
1982
1.00
0.00
1.00
-1.00
-0.38
0.99
0.93
-0.05
-1.00
0.99
1.00
1.00
0.00
0.96
-0.84
-0.99
1.00
0.00
1.00
0.00
1.00
-0.04
-0.90
0.00
0.00
1.00
1.00
1.00
1.00
0.00
1.00
1.00
0.00
1.00
1.00
0.00
0.00
0.00
1.00
-1.00
0.00
1.00
0.00
1.00
1.00
1985
1.00
0.00
G.00
-1.00
-0.60
1.00
0.95
0.02
0.43
0.96
0.89
0.00
0.83
1.00
-0.94
-1.00
1.00
1.00
1.00
1.00
1.00
0.22
-0.30
0.00
1.00
1.00
1.00
1.00
1.00
0.00
0.00
1.00
1.00
1.00
1.00
0.00
0.00
-1.00
-0.97
-1.00
0.00
1.00
1.00
0.95
1.00
1988
0.00
0.98
0.00
-1.00
-0.85
1.00
1.00
0.48
0.73
0.74
0.95
1.00
0.98
1.00
0.26
1.00
0.00
-0.47
1.00
-0.58
0.24
-0.96
-0.58
0.00
1.00
0.00
1.00
1.00
1.00
1.00
1.00
1.00
0.81
1.00
0.94
0.00
0.46
0.00
-1.00
-0.98
0.00
1.00
0.26
1.00
1.00
1991
0.00
0.31
0.00
-0.78
-0.92
0.94
0.94
-0.09
0.88
0.87
0.97
0.99
1.00
0.99
0.42
0.80
0.96
-0.96
0.95
0.09
-0.97
-0.92
-0.26
0.00
1.00
1.00
0.96
1.00
1.00
1.00
1.00
0.92
0.99
1.00
0.60
0.00
0.93
0.97
1.00
1.00
-1.00
1.00
0.66
1.00
0.94
1978
0.0
0.0
0.0
0.0
12.5
0.5
0.0
86.9
18.6
1.1
0.0
0.0
0.0
0.0
11.2
0.0
0.0
1.5
0.0
50.3
0.0
49.5
0.0
0.0
0.0
0.0
92.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
37.4
0.0
1982
0.0
0.0
0.0
0.0
62.5
1.0
6.7
95.4
0.0
0.7
0.0
0.0
0.0
4.0
15.9
0.5
0.0
0.0
0.0
0.0
0.0
96.5
9.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1985
0.0
0.0
0.0
0.0
40.0
0.0
5.1
97.7
57.5
3.8
11.0
0.0
16.7
0.2
6.5
0.0
0.0
0.0
0.0
0.0
0.0
77.8
70.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
3.2
0.0
0.0
0.0
0.0
4.6
0.0
1988
0.0
1.8
0.0
0.0
14.5
0.1
0.2
52.3
27.1
25.8
5.1
0.0
1.5
0.0
74.3
0.0
0.0
52.5
0.2
41.9
75.9
4.3
42.1
0.0
0.0
0.0
0.2
0.0
0.0
0.0
0.0
0.0
19.4
0.0
6.4
0.0
53.7
0.0
0.0
2.3
0.0
0.0
73.9
0.0
0.0
1991
0.0
0.0
0.0
0.0
0.0
0.0
1.7
69.5
32.8
2.7
8.0
0.0
13.8
0.2
25.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
81.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
4.9
0.0
0.0
0.0
0.0
4.8
0.0
302
1978
SITC
0.83
695
1.00
696
1.00
697
0.67
699
711
0.00
0.00
712
0.67
713
-1.00
714
1.00
716
1.00
718
1.00
721
722
1.00
0.00
723
1.00
724
1.00
725
0.00
726
727
1.00
728
731
0.00
0.00
733
0.00
735
-0.79
736
1.00
737
741
1.00
1.00
742
743
1.00
744
-1.00
1.00
745
0.00
746
747 . 0.00
0.00
748
1.00
749
0.00
751
752
0.00
0.00
759
1.00
761
1.00
762
0.98
763
1.00
764
1.00
771
0.98
772
1.00
773
1.00
774
0.99
775
-0.84
776
1982
1.00
-0.19
1.00
0.98
0.00
0.00
-0.05
-0.97
-0.13
0.00
1.00
0.00
0.00
0.98
0.00
1.00
0.00
1.00
0.00
0.00
0.00
-0.31
1.00
1.00
1.00
1.00
1.00
0.31
0.00
0.00
0.00
1.00
0.96
0.00
-1.00
1.00
1.00
0.82
0.95
1.00
0.21
0.78
1.00
-0.62
-0.22
1985
-0.18
0.15
0.84
0.73
0.00
0.00
0.65
1.00
-0.68
1.00
1.00
0.00
1.00
1.00
1.00
1.00
1.00
0.11
0.00
0.00
0.00
0.79
1.00
0.85
1.00
0.41
1.00
1.00
0.00
0.00
0.00
0.21
1.00
-0.76
0.85
1.00
1.00
0.96
0.99
1.00
1.00
0.71
0.25
0.99
-0.43
1988
0.99
0.06
0.96
0.99
1.00
0.00
0.45
0.00
-0.18
0.00
-0.79
1.00
1.00
1.00
1.00
0.80
1.00
0.98
1.00
1.00
1.00
0.00
1.00
1.00
1.00
0.90
1.00
1.00
-1.00
0.98
1.00
0.98
1.00
-0.68
0.29
1.00
0.97
0.99
0.94
1.00
0.94
0.83
0.63
1.00
0.32
1991
0.96
-0.15
0.29
0.78
1.00
0.00
-0.32
0.44
-0.65
1.00
-0.81
1.00
0.97
1.00
1.00
0.98
0.63
0.98
0.20
1.00
0.99
0.00
1.00
0.93
0.85
0.57
1.00
0.92
-1.00
0.65
0.76
0.99
0.27
-0.37
0.70
1.00
1.00
1.00
0.74
0.91
0.84
0.95
0.96
0.51
0.58
1978
17.2
0.0
0.0
32.9
0.0
0.0
32.7
0.0
0.0
0.0
0.0
0.0
0.0
0.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
20.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.4
0.0
0.0
0.0
0.0
0.0
1.6
0.0
0.0
1.9
0.0
0.0
0.5
16.2
1982
0.0
80.9
0.0
1.7
0.0
0.0
95.4
2.7
86.7
0.0
0.0
0.0
0.0
1.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
69.1
0.0
0.0
0.0
0.0
0.0
68.8
0.0
0.0
0.0
0.0
3.9
0.0
0.0
0.1
0.0
17.9
5.3
0.0
79.4
21.7
0.0
37.8
77.8
1985
81.9
85.3
16.0
26.6
0.0
0.0
35.0
0.0
32.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
88.5
0.0
0.0
0.0
21.3
0.0
15.0
0.0
59.3
0.0
0.0
0.0
0.0
0.0
79.2
0.0
24.2
15.1
0.1
0.0
4.1
1.3
0.0
0.0
29.0
75.0
0.8
56.7
1988
1.1
93.9
4.1
0.6
0.0
0.0
55.0
0.0
82.0
0.0
20.5
0.0
0.0
0.1
0.0
20.1
0.0
2.0
0.0
0.0
0.0
0.0
0.0
0.2
0.0
10.5
0.1
0.0
0.0
1.7
0.2
1.5
0.0
32.4
71.0
0.0
2.8
0.8
6.1
0.0
5.9
17.3
37.2
0.0
68.1
1991
94.3
81.0
18.8
9.4
0.0
0.0
4.5
0.0
32.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
47.4
0.0
0.0
0.0
68.7
0.0
5.7
0.0
57.1
0.0
0.0
0.0
0.0
0.0
71.0
0.0
33.6
14.3
0.0
0.0
1.7
0.7
0.0
0.0
5.2
100.0
0.4
92.0
303
1978
0.96
0.00
1.00
0.00
1.00
1.00
-1.00
1.00
0.99
0.00
0.00
-1.00
0.00
-0.16
0.00
0.00
0.00
0.00
1.00
0.00
0.00
1.00
0.63
1.00
1.00
1.00
1.00
-0.35
0.82
1.00
1.00
0.00
1.00
0.00
0.95
1.00
0.99
1.00
1.00
1.00
0.98
0.99
1982
0.99
1.00
1.00
0.00
1.00
0.00
1.00
1.00
0.00
0.00
0.00
0.00
0.00
-0.91
1.00
0.00
0.00
-1.00
0.00
0.00
0.00
1.00
1.00
1.00
1.00
1.00
1.00
0.49
1.00
1.00
0.97
0.50
0.99
0.00
0.47
0.20
1.00
1.00
1.00
1.00
1.00
0.90
1985
0.96
1.00
0.00
0.00
1.00
-1.00
1.00
1.00
0.06
-1.00
0.00
-0.40
0.00
-0.63
0.62
0.00
0.00
-0.83
0.00
0.00
0.00
0.00
0.95
0.85
1.00
1.00
0.00
0.70
1.00
1.00
0.16
1.00
0.99
0.00
0.23
-0.14
1.00
1.00
0.00
1.00
0.97
1.00
1988
0.89
0.87
0.00
0.00
1.00
-1.00
1.00
0.00
0.46
1.00
1.00
-0.99
1.00
-0.64
0.67
0.86
0.73
1.00
0.89
1.00
0.81
0.00
0.73
1.00
1.00
0.90
0.99
0.98
0.20
1.00
-0.43
0.71
-0.42
1.00
0.84
0.40
0.85
0.99
0.00
0.19
0.96
0.14
1991
0.64
1.00
0.00
1.00
1.00
-1.00
1.00
0.00
0.70
1.00
0.00
-1.00
0.98
-0.67
-0.52
-0.95
-1.00
-1.00
-1.00
-1.00
0.10
0.00
-0.43
0.95
1.00
0.12
1.00
0.64
0.36
1.00
o
SITC
778
781
782
783
784
785
786
791
792
793
811
812
813
821
831
841
842
843
844
845
846
847
848
851
871
872
873
874
881
882
883
884
885
891
892
893
894
895
896
897
898
899
-0.36
-0.64
1.00
0.81
-0.10
0.51
0.90
-1.00
0.18
0.95
0.57
1978
4.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1.2
0.0
0.0
0.0
0.0
84.0
0.0
0.0
0.0
. 00
* 0.0
0.0
0.0
0.0
37.5
0.0
0.0
0.0
0.2
65.2
18.2
0.0
0.0
0.0
0.0
0.0
4.8
0.0
0.5
0.0
0.0
0.0
2.1
0.8
1982
0.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
99.7
0.0
0.0
0.0
0.0
9.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
50.6
0.0
0.0
2.8
50.0
0.9
0.0
52.6
79.9
0.0
0.0
0.0
0.0
0.0
9.7
1985
4.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
93.9
0.0
0.0
60.0
0.0
37.0
38.1
0.0
0.0
17.4
0.0
0.0
0.0
0.0
5.3
15.4
0.0
0.0
0.0
30.4
0.0
0.0
84.4
0.0
0.6
0.0
76.9
86.0
0.0
0.0
0.0
0.0
2.9
0.2
1988
11.0
13.3
0.0
0.0
0.2
0.0
0.0
0.0
54.1
0.0
0.0
0.7
0.0
36.0
32.9
13.8
27.1
0.0
11.1
0.0
18.8
0.0
26.7
0.0
0.0
9.5
0.7
2.3
80.3
0.0
57.1
29.1
58.4
0.0
16.2
59.8
14.5
1.3
0.0
80.8
4.4
85.7
304
1991
1.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
56.4
5.9
0.0
60.0
0.0
47.0
58.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
18.2
40.0
0.0
0.0
0.0
35.5
0.0
0.0
62.3
0.0
0.3
0.0
48.4
76.3
0.0
0.0
0.0
0.0
1.2
1.0
8.INDONESIA
SITC
511
512
513
514
515
516
519
522
523
524
525
531
532
533
541
542
551
553
554
562
571
572
573
574
575
577
579
581
582
583
584
585
591
592
593
597
598
611
612
613
621
625
1978
0.00
-1.00
1.00
-0.32
1.00
0.00
0.00
1.00
1.00
0.00
0.00
1.00
-1.00
1.00
-0.41
0.00
0.00
0.00
0.00
1.00
0.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
1.00
1.00
1.00
0.00
0.00
0.00
0.00
0.00
0.47
0.00
0.00
0.00
1.00
1.00
1982
1.00
0.84
-0.09
1.00
1.00
1.00
0.00
0.25
1.00
0.00
0.00
0.96
-1.00
0.95
0.91
0.00
1.00
0.00
1.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.00
1.00
1.00
0.00
1.00
1.00
0.00
0.00
0.17
-1.00
1.00
0.00
1.00
1.00
TSI
1985
1.00
-0.90
0.93
-0.76
0.99
1.00
0.00
-0.44
0.79
0.00
0.00
0.95
-1.00
1.00
0.93
0.00
-1.00
0.00
1.00
1.00
0.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
1.00
1.00
1.00
0.00
1.00
0.74
0.00
0.00
0.85
-0.96
1.00
0.00
1.00
1.00
1988
1.00
-0.90
0.89
0.98
0.99
0.99
0.00
-0.07
0.83
0.94
0.00
0.56
-1.00
1.00
0.96
1.00
-1.00
0.00
1.00
1.00
1.00
1.00
1.00
0.95
1.00
0.00
1.00
1.00
0.97
1.00
0.00
0.00
1.00
1.00
1.00
1.00
0.61
-0.35
1.00
0.00
1.00
1.00
1991
-0.58
-0.40
0.72
0.35
0.86
1.00
0.00
1.00
1.00
1.00
1.00
0.55
0.65
0.98
0.98
1.00
0.90
0.78
-0.02
-0.84
1.00
1.00
1.00
1.00
1.00
0.00
1.00
1.00
0.87
1.00
0.00
0.00
1.00
1.00
1.00
1.00
0.34
0.90
1.00
1.00
0.77
1.00
1978
0.0
0.0
0.0
68.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
59.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
53.1
0.0
0.0
0.0
0.0
0.0
1982
0.0
15.6
91.4
0.0
0.0
0.0
0.0
74.7
0.0
0.0
0.0
4.4
0.0
4.7
9.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
83.5
0.0
0.0
0.0
0.0
0.0
HTI
1985
0.0
10.0
7.2
23.6
0.5
0.0
0.0
56.3
20.9
0.0
0.0
4.6
0.0
0.0
7.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
26.0
0.0
0.0
15.0
4.1
0.0
0.0
0.0
0.0
1988
0.0
10.2
11.4
2.5
0.8
1.3
0.0
92.9
17.4
5.9
0.0
44.0
0.0
0.0
4.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
4.7
0.0
0.0
0.0
0.0
3.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
39.4
64.5
0.0
0.0
0.0
0.0
1991
41.6
60.3
28.5
65.0
14.1
0.2
0.0
0.0
0.0
0.0
0.0
45.3
34.6
2.4
2.0
0.0
10.3
21.7
97.7
16.3
0.0
0.0
0.0
0.0
0.1
0.0
0.0
0.0
13.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
65.8
10.5
0.0
0.0
23.3
0.0
305
1978
1.00
0.00
0.00
1.00
1.00
1.00
0.00
0.88
1.00
1.00
1.00
0.00
1.00
1.00
1.00
0.92
1.00
1.00
1.00
1.00
1.00
1.00
0.00
0.00
0.00
1.00
1.00
0.00
1.00
1.00
1.00
1.00
1.00
0.00
0.00
1.00
0.00
1.00
0.00
0.00
-1.00
0.00
1.00
0.00
1.00
1982
1.00
0.00
0.00
-1.00
0.91
1.00
1.00
1.00
1.00
0.98
1.00
0.00
1.00
1.00
0.98
1.00
1.00
1.00
1.00
1.00
1.00
0.00
0.00
0.00
0.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
0.00
1.00
0.00
1.00
1.00
1.00
-1.00
0.00
1.00
1.00
1.00
1985
1.00
0.00
1.00
-1.00
1.00
1.00
1.00
0.64
0.93
0.97
-0.33
1.00
1.00
1.00
1.00
-1.00
0.00
1.00
1.00
0.67
1.00
1.00
0.00
0.00
0.00
0.00
1.00
1.00
1.00
1.00
1.00
1.00
0.94
1.00
0.00
1.00
0.00
0.39
0.00
1.00
-1.00
0.00
1.00
1.00
1.00
1988
0.00
0.88
-1.00
-1.00
-1.00
1.00
1.00
-0.51
0.78
0.63
0.97
1.00
0.80
1.00
0.92
0.00
- 1 .0 0
0.94
0.67
-0.80
0.00
1.00
0.00
0.00
0.00
1.00
1.00
1.00
1.00
1.00
0.87
1.00
1.00
1.00
0.00
-0.75
1.00
0.23
0.00
1.00
-1.00
0.00
1.00
1.00
1.00
1991
0.00
0.75
0.00
-1.00
-0.98
0.85
0.98
0.41
0.67
0.83
1.00
1.00
1.00
1.00
0.99
-0.97
-0.27
0.85
0.63
0.43
-0.72
0.92
-1.00
0.00
0.00
1.00
0.22
0.35
1.00
1.00
0.20
1.00
0.97
1.00
1.00
-0.03
1.00
0.63
-0.85
1.00
O
O
f-H
1
SITC
628
629
633
634
635
641
642
651
652
653
654
655
656
657
658
659
661
662
663
664
665
666
667
668
669
671
672
673
674
675
676
677
678
679
681
682
683
684
685
686
687
689
691
692
693
1.00
1.00
1.00
0.64
1978
0.0
0.0
0.0
0.0
0.0
0.0
0.0
12.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
8.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1982
0.0
0.0
0.0
0.0
9.1
0.0
0.0
0.0
0.0
2.1
0.0
0.0
0.0
0.0
2.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1985
0.0
0.0
0.0
0.0
0.0
0.0
0.0
36.4
7.3
3.3
67.0
0.0
0.0
0.2
0.0
0.0
0.0
0.0
0.0
32.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
6.0
0.0
0.0
0.0
0.0
61.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1988
0.0
12.1
0.0
0.0
0.0
0.0
0.0
49.1
22.3
36.9
3.5
0.0
19.6
0.0
7.8
0.0
0.0
6.2
32.5
19.9
100.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
13.3
0.0
0.0
0.0
0.0
24.7
0.0
77.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
306
1991
0.0
24.7
0.0
0.1
1.9
14.8
2.2
58.8
33.1
16.7
0.0
0.0
0.0
0.5
0.6
3.2
73.5
15.1
37.5
57.1
28.1
8.2
0.0
0.0
0.0
0.0
77.8
64.5
0.0
0.0
80.3
0.0
3.0
0.0
0.0
96.8
0.0
37.2
15.3
0.0
0.0
0.0
0.0
0.0
36.2
SITC
695
696
697
699
711
712
713
714
716
718
721
722
723
724
725
726
727
728
731
733
735
736
737
741
742
743
744
745
746
747
748
749
751
752
759
761
762
763
764
771
772
773
774
775
776
1978
1.00
1.00
1.00
1.00
0.00
0.00
1.00
0.00
0.96
0.00
0.00
1.00
1.00
1.00
0.00
1.00
0.00
1.00
0.00
0.00
0.00
1.00
1.00
1.00
0.91
0.00
1.00
1.00
0.00
0.00
o.oo
0.96
0.00
0.00
0.00
1.00
-1.00
-1.00
0.94
1.00
1.00
1.00
1.00
1.00
-0.78
1982
1.00
1991
0.97
0.66
0.41
0.53
1.00
1.00
0.99
1.00
1985
1.00
1.00
1.00
0.95
1.00
1988
0.99
1.00
1.00
1.00
1.00
0.00
0.00
0.00
0.00
1.00
1.00
1.00
1.00
1.00
1.00
0.00
0.00
0.00
1.00
1.00
0.93
1.00
1.00
0.00
0.00
0.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
1.00
1.00
1.00
1.00
-0.42
1.00
1.00
1.00
1.00
0.04
0.78
0.98
1.00
1.00
1.00
0.79
0.97
1.00
1.00
1.00
1.00
1.00
1.00
0.99
0.98
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.98
1.00
0.97
1.00
0.98
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
0.99
1.00
0.98
1.00
0.79
1.00
0.48
1.00
0.99
0.99
1.00
0.99
0.98
1.00
0.99
1.00
1.00
1.00
0.87
1.00
1.00
1.00
1.00
0.86
0.91
1.00
0.97
0.82
1.00
0.93
0.00
0.00
0.00
0.00
1.00
1.00
-1.00
0.67
1.00
1.00
1.00
1.00
1.00
-1.00
0.75
1.00
1.00
1.00
0.00
0.00
1.00
0.93
1.00
0.53
0.00
1978
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
4.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
9.0
100.0
0.0
0.0
0.0
0.0
0.0
3.8
0.0
0.0
0.0
0.0
0.0
0.0
6.4
0.0
0.0
0.0
0.0
0.0
22.2
1982
0.0
0.0
0.0
1.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.2
0.0
0.0
0.0
1.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1.9
0.0
0.0
0.0
0.1
0.0
0.0
33.3
0.0
0.0
0.0
0.0
0.2
7.4
1985
0.0
0.0
0.0
5.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.5
0.0
2.3
0.0
0.0
0.0
0.0
24.8
0.0
0.0
0.0
0.0
0.0
47.0
1988
1.0
0.0
0.5
0.0
0.0
0.0
0.0
0.0
6.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
58.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.4
1.3
0.0
1.6
0.0
20.9
0.0
52.4
1991
2.7
34.1
58.8
46.7
0.0
0.0
96.1
22.2
2.1
0.0
0.0
0.0
21.4
2.9
0.0
0.0
0.0
0.1
0.0
0.0
0.9
0.0
0.0
0.6
0.5
0.0
1.1
1.9
0.0
0.8
0.0
0.0
0.2
12.9
0.3
0.1
0.0
0.0
13.7
8.9
0.2
2.7
18.5
0.0
6.9
307
1978
1.00
1.00
0.00
0.00
1.00
1.00
1.00
1.00
0.00
1.00
0.00
0.00
0.00
0.97
1.00
0.00
1.00
1.00
1.00
0.00
0.00
0.00
0.97
1.00
1.00
0.00
1.00
1.00
-1.00
1.00
0.00
0.00
1.00
0.00
0.99
1.00
0.98
0.00
1.00
1.00
1.00
-0.89
1982
1.00
1.00
1.00
0.00
1.00
1.00
1.00
1.00
0.00
1.00
0.00
1.00
0.00
0.86
1.00
0.00
0.71
0.00
0.00
1.00
1.00
1.00
1.00
1.00
0.00
1.00
1.00
0.98
0.00
0.00
1.00
1.00
1.00
0.00
0.99
1.00
0.92
1.00
0.00
0.00
0.93
0.86
1985
0.95
0.00
0.00
0.00
1.00
1.00
1.00
1.00
0.00
0.00
0.00
-0.20
0.00
0.39
1.00
0.00
1.00
1.00
0.00
0.00
0.00
1.00
1.00
1.00
0.00
1.00
1.00
1.00
0.00
0.00
0.00
1.00
1.00
0.00
1.00
1.00
1.00
1.00
0.87
1.00
0.99
0.38
1988
0.63
0.00
1.00
1.00
0.00
1.00
1.00
1.00
0.00
-0.11
1.00
-1.00
1.00
0.33
0.99
0.00
0.98
0.00
0.00
1.00
1.00
0.00
1.00
0.99
1.00
1.00
1.00
1.00
-0.96
1.00
-0.67
1.00
1.00
1.00
0.88
1.00
0.99
1.00
-1.00
1.00
-0.42
-0.17
1991
-0.10
0.00
0.80
1.00
-1.00
0.00
1.00
1.00
0.49
0.40
1.00
-0.03
1.00
-0.95
0.35
-1.00
O
SITC
778
781
782
783
784
785
786
791
792
793
811
812
813
821
831
841
842
843
844
845
846
847
848
851
871
872
873
874
881
882
883
884
885
891
892
893
894
895
896
897
898
899
0.55
-1.00
-0.99
0.97
0.00
0.92
0.92
1.00
1.00
1.00
0.97
1.00
1.00
0.00
0.52
-0.30
1.00
0.99
0.91
0.35
0.56
1.00
-0.49
-0.03
0.49
1978
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1.1
0.0
1.8
0.0
0.0
0.0
0.0
10.8
1982
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
13.7
0.0
0.0
28.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.1
0.0
0.0
0.0
0.0
0.0
0.0
0.9
0.0
7.6
0.0
0.0
0.0
6.6
14.2
1985
4.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
80.0
0.0
60.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
13.3
0.0
0.6
62.2
1988
37.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
88.9
0.0
0.0
0.0
66.5
1.5
0.0
2.1
0.0
0.0
0.0
0.0
0.0
0.0
1.3
0.0
0.0
0.0
0.0
4.0
0.0
32.7
0.0
0.0
0.0
11.9
0.0
0.8
0.0
0.0
0.0
58.1
82.8
308
1991
90.4
0.0
19.7
0.0
0.0
0.0
0.0
0.0
50.7
60.5
0.0
96.8
0.0
5.1
65.0
0.2
0.0
44.9
0.0
0.8
3.1
0.0
7.6
7.9
0.0
0.0
0.0
3.5
0.0
0.0
0.0
47.6
69.6
0.0
0.8
9.3
65.0
44.1
0.0
50.9
97.3
50.6
8. PHELLEPPINE
1978
0.00
-0.93
1.00
1.00
1.00
1.00
0.00
-0.62
1.00
0.00
0.00
1.00
0.00
0.52
0.98
0.00
-1.00
0.00
0.00
1.00
0.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.96
0.65
1.00
1.00
0.00
1.00
0.00
0.00
0.51
1.00
1.00
1.00
1.00
1.00
1982
1.00
-0.98
1.00
1.00
1.00
1.00
0.00
1.00
1.00
0.00
0.00
0.78
0.00
1.00
1.00
0.00
0.00
0.00
0.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.16
1.00
1.00
0.00
0.00
1.00
0.00
0.00
0.24
0.88
1.00
-0.29
1.00
0.90
1988
1.00
-1.00
1.00
1.00
1.00
1.00
0.00
1.00
1.00
0.85
0.00
1.00
0.00
1.00
1.00
1.00
0.00
0.00
0.98
1.00
1.00
0.90
1.00
1.00
1.00
0.00
0.00
0.96
1.00
1.00
0.00
0.00
0.00
1.00
0.00
1.00
-0.11
0.36
0.00
-0.22
1.00
0.99
1991
1.00
-0.94
0.96
0.10
0.97
1.00
0.00
1.00
1.00
1.00
0.00
1.00
1.00
1.00
0.96
1.00
1.00
O
O
1
SITC
511
512
513
514
515
516
519
522
523
524
525
531
532
533
541
542
551
553
554
562
571
572
573
574
575
577
579
581
582
583
584
585
591
592
593
597
598
611
612
613
621
625
TSI
1985
1.00
-0.97
1.00
1.00
1.00
0.00
0.00
1.00
1.00
0.00
0.00
1.00
0.00
1.00
1.00
0.00
1.00
-1.00
1.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.12
1.00
1.00
0.00
0.00
0.96
0.00
0.00
0.97
0.95
0.85
0.00
0.95
1.00
0.90
0.79
1.00
1.00
1.00
0.62
1.00
0.00
0.00
1.00
0.91
1.00
0.00
0.00
1.00
1.00
-1.00
1.00
-0.07
0.97
-1.00
0.89
1.00
0.99
1982
1978
0.0
0.0
6.5
2.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
38.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
21.5
0.0
0.0
0.0
47.8
1.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0 . 0.0
4.3
83.9
34.7
0.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
49.0
75.8
0.0
12.4
0.2
0.0
0.0
71.4
0.0
0.0
0.0
9.6
IIT I
1985
0.0
3.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
87.8
0.1
0.0
0.0
0.0
3.9
0.0
0.0
3.2
5.0
14.9
0.0
5.2
0.0
1988
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.1
0.0
15.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.3
0.0
0.0
10.3
0.0
0.0
0.0
0.0
0.0
3.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
88.6
63.7
0.0
77.8
0.0
0.5
309
4AA4
iyyx
0.0
6.0
4.4
90.2
2.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
4.0
0.0
0.0
0.0
9.5
21.0
0.0
0.0
0.0
38.4
0.0
0.0
0.0
0.0
9.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
93.3
3.0
0.0
11.0
0.0
1.3
SITC
628
629
633
634
635
641
642
651
652
653
654
655
656
657
658
659
661
662
663
664
665
666
667
668
669
671
672
673
674
675
676
677
678
679
681
682
683
684
685
686
687
689
691
692
693
1978
0.99
0.00
0.00
0.00
-0.39
1.00
1.00
0.50
1.00
0.91
1.00
1.00
1.00
1.00
1.00
0.00
0.00
-0.94
0.98
1.00
-0.30
0.00
0.00
0.00
0.00
1.00
1.00
1.00
1.00
0.00
0.00
1.00
0.00
0.00
0.00
1.00
-1.00
1.00
0.00
0.00
-1.00
0.00
0.00
-0.78
1.00
1982
1.00
0.00
0.00
0.00
0.47
1.00
1.00
-0.46
1.00
0.99
1.00
1.00
1.00
1.00
1.00
0.00
1.00
1.00
1.00
-0.63
1.00
0.89
0.00
0.00
0.00
-0.95
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
0.00
1.00
-1.00
0.96
1.00
1.00
0.00
0.00
1.00
0.93
1.00
1985
1.00
0.00
1.00
0.00
-1.00
1.00
1.00
O.ol
1.00
0.97
1.00
1.00
0.99
1.00
0.99
-1.00
0.00
0.00
1.00
-0.06
1.00
1.00
0.00
0.00
1.00
-1.00
1.00
1.00
0.00
1.00
0.00
1.00
1.00
1.00
0.00
-0.94
-1.00
1.00
0.00
0.00
-1.00
0.00
1.00
1.00
1.00
1988
0.00
1.00
0.00
0.00
-0.05
1.00
1.00
0.13
0.96
0.99
0.99
0.93
0.96
1.00
0.99
-1.00
0.97
1.00
0.99
-0.45
1.00
0.93
0.00
0.00
0.00
-0.97
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
-0.96
1.00
1.00
1.00
1.00
0.00
0.00
1.00
1.00
1.00
1991
0.00
0.95
0.00
1.00
-0.66
0.03
0.95
0.70
0.94
0.99
0.89
0.98
0.95
0.99
0.83
-0.33
0.62
0.59
0.96
0.84
0.57
0.78
-0.65
0.00
0.00
-1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
-0.98
-0.93
0.00
1.00
0.60
1.00
0.00
0.00
1.00
0.44
1.00
1978
1.0
0.0
0.0
0.0
61.1
0.1
0.0
49.6
0.0
9.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
6.0
1.9
0.0
70.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
21.6
0.0
1982
0.5
0.0
0.0
0.0
53.3
0.3
0.0
54.1
0.0
1.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
36.9
0.0
10.7
0.0
0.0
0.0
5.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
3.9
0.0
0.0
0.0
0.0
0.0
7.2
0.0
1985
0.0
0.0
0.0
0.0
0.0
0.0
0.0
39.4
0.0
2.9
0.0
0.0
1.3
0.0
0.8
0.0
0.0
0.0
0.0
93.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
5.6
0.0
0.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1988
0.0
0.0
0.0
0.0
94.9
0.0
0.0
86.8
3.7
0.7
1.5
6.9
4.3
0.4
0.9
0.0
2.8
0.0
0.8
54.9
0.0
6.6
0.0
0.0
0.0
2.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
4.1
0.0
0.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
310
1991
0.0
4.6
0.0
0.0
33.7
96.8
4.7
29.6
5.5
0.8
10.8
1.5
4.6
0.6
16.7
66.7
37.8
40.9
4.3
15.9
43.0
22.2
34.8
0.0
0.0
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.3
7.4
0.0
0.0
40.0
0.0
0.0
0.0
0.0
55.6
0.0
SITC
694
695
696
697
699
711
712
713
714
716
718
721
722
723
724
725
726
727
728
731
733
735
736
737
741
742
743
744
745
746
747
748
749
751
752
759
761
762
763
764
771
772
773
774
775
1978
1.00
1.00
1.00
1.00
0.91
0.00
0.00
1.00
0.00
1.00
0.00
1.00
1.00
1.00
0.90
1.00
0.00
0.00
1.00
0.00
0.00
0.00
1.00
1.00
0.93
0.00
0.00
1.00
1.00
0.00
0.00
0.00
1.00
1.00
0.00
0.00
0.00
-1.00
0.00
1.00
1.00
1.00
1.00
1.00
0.00
1982
0.45
1.00
1.00
1.00
0.84
0.00
0.00
1.00
-1.00
0.99
0.00
1.00
0.00
0.00
0.83
1.00
-0.48
1.00
0.51
0.00
0.00
0.00
-0.04
-0.15
1.00
1.00
1.00
1.00
-0.56
0.00
0.00
0.00
0.36
1.00
-1.00
1.00
-1.00
0.00
-1.00
1.00
1.00
0.95
1.00
1.00
0.00
1985
1.00
0.99
1.00
0.98
0.50
1.00
0.00
1.00
0.00
1.00
0.00
1.00
0.00
1.00
1.00
1.00
1.00
0.00
1.00
0.00
0.00
0.00
0.00
1.00
0.38
1.00
1.00
1.00
1.00
0.00
0.00
0.00
0.99
1.00
1.00
0.56
1.00
0.00
-0.03
1.00
0.85
0.55
1.00
0.00
-0.23
1988
1.00
0.95
1.00
0.93
0.99
1.00
0.00
-0.65
0.00
0.51
0.00
1.00
1.00
0.00
1.00
1.00
0.00
0.00
1.00
1.00
1.00
0.00
0.00
1.00
1.00
1.00
1.00
1.00
0.88
1.00
1.00
1.00
0.98
1.00
-0.64
0.60
1.00
1.00
0.93
0.49
0.13
1.00
1.00
1.00
0.98
1991
1.00
1.00
1.00
0.99
0.89
1.00
0.00
1.00
-1.00
0.99
1.00
1.00
1.00
-1.00
1.00
1.00
1.00
1.00
0.95
1.00
0.99
1.00
0.00
1.00
1.00
0.92
1.00
1.00
1.00
1.00
1.00
1.00
0.95
1.00
-0.96
0.54
0.96
0.99
1.00
0.43
0.95
0.89
0.99
1.00
0.96
1978
0.0
0.0
0.0
0.0
8.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
10.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
7.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1982
55.2
0.0
0.0
0.0
16.3
0.0
0.0
0.0
0.0
0.5
0.0
0.0
0.0
0.0
16.9
0.0
52.2
0.0
48.9
0.0
0.0
0.0
96.1
85.0
0.0
0.0
0.0
0.0
44.0
0.0
0.0
0.0
64.1
0.0
0.0
0.0
0.0
0.0
0.0
0.3
0.0
5.1
0.0
0.0
0.0
1985
0.0
1.1
0.0
2.3
49.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
62.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1.2
0.0
0.0
43.5
0.3
0.0
97.3
0.3
14.7
45.5
0.0
0.0
76.9
1988
0.0
5.2
0.0
6.8
1.4
0.0
0.0
34.7
0.0
49.2
0.0
0.0
0.0
0.0
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
11.7
0.0
0.0
0.0
1.6
0.0
35.7
39.6
0.0
0.0
6.8
51.1
87.4
0.0
0.0
0.0
1.8
1991
0.0
0.0
0.0
0.6
10.7
0.0
0.0
0.0
0.0
0.9
0.0
0.0
0.0
0.0
0.3
0.0
0.0
0.0
4.7
0.0
1.4
0.0
0.0
0.0
0.5
8.4
0.0
0.0
0.0
0.0
0.0
0.0
4.7
0.0
4.0
45.7
4.3
1.0
0.1
56.6
5.4
11.2
1.1
0.0
3.8
311
1978
-0.85
1.00
-1.00
0.00
0.00
0.83
1.00
1.00
1.00
1.00
1
t
O
o
SITC
776
778
781
782
783
784
785
786
791
792
793
811
812
813
821
831
841
842
843
844
845
846
847
848
851
871
872
873
874
881
882
883
884
885
891
892
893
894
895
896
897
898
899
0.00
-1.00
0.00
0.44
0.00
0.00
1.00
1.00
1.00
-1.00
1.00
0.80
1.00
1.00
1.00
1.00
0.00
1.00
-1.00
0.98
1.00
1.00
1.00
1.00
0.40
0.91
1.00
1.00
1.00
-1.00
0.00
1.00
1982
-0.91
0.85
-1.00
0.00
0.00
-0.73
1.00
1.00
1.00
-1.00
0.01
1.00
0.00
0.00
-0.62
1.00
0.00
1.00
-0.29
1.00
1.00
0.00
1.00
0.45
1.00
0.00
1.00
1.00
1.00
0.00
1.00
1.00
-1.00
1.00
1.00
0.83
0.56
1.00
1.00
0.00
1.00
0.98
0.92
1985
0.12
0.72
0.82
0.00
0.00
-0.08
0.00
0.00
0.00
1.00
0.00
0.00
0.88
0.00
-0.05
-1.00
0.00
-0.87
1.00
1.00
0.00
0.00
0.99
-0.14
0.00
0.00
1.00
1.00
0.98
1.00
1.00
0.00
1.00
1.00
0.00
0.71
0.83
0.88
1.00
1.00
-0.76
0.38
0.08
1988
0.82
0.90
1.00
1.00
0.00
1.00
0.00
-1.00
0.00
1.00
1.00
1.00
-1.00
0.60
0.49
0.42
1.00
1.00
1.00
-1.00
0.89
0.96
0.00
0.16
1.00
1.00
1.00
1.00
0.82
1.00
1.00
0.00
0.71
0.99
0.00
0.98
0.38
0.81
1.00
-0.50
0.17
0.82
-0.50
1991
0.67
0.85
1.00
1.00
1.00
1.00
0.00
0.69
0.00
-0.07
1.00
0.00
-0.88
0.98
0.42
-0.82
0.89
-0.42
-1.00
0.77
0.28
1.00
0.00
-0.32
0.59
0.95
0.95
1.00
0.69
0.53
0.50
0.70
0.17
0.85
1.00
0.99
0.95
0.77
1.00
-1.00
0.53
0.99
-0.17
1978
14.8
0.0
0.0
0.0
0.0
17.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
56.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
20.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.5
0.0
0.0
0.0
0.0
60.0
8.6
0.0
0.0
0.0
0.0
100.0
0.0
1982
9.2
15.0
0.0
0.0
0.0
26.6
0.0
0.0
0.0
0.0
98.9
0.0
0.0
0.0
38.2
0.0
0.0
0.0
71.4
0.0
0.0
0.0
0.0
54.5
0.0
0.0
0.0
0.0
0.0
0.0
0.4
0.0
0.0
0.0
0.0
16.7
43.6
0.0
0.0
0.0
0.0
2.2
8.3
1985
87.9
27.8
18.2
0.0
0.0
92.5
0.0
0.0
0.0
0.0
100.0
0.0
12.3
0.0
95.4
0.0
0.0
13.3
0.0
0.0
0.0
0.0
1.0
85.7
0.0
0.0
0.0
0.0
1.5
0.0
0.0
0.0
0.0
0.0
0.0
28.6
16.9
11.9
0.0
0.0
23.5
62.5
91.7
1988
17.9
9.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
40.0
51.2
57.6
0.0
0.0
0.0
0.0
10.9
4.1
0.0
84.4
0.0
0.0
0.0
0.0
17.8
0.0
0.0
0.0
29.4
1.2
0.0
2.1
62.0
19.1
0.0
50.0
83.0
17.5
50.5
312
1991
32.7
15.3
0.1
0.0
0.0
0.2
100.0
30.8
0.0
93.3
0.0
0.0
11.6
2.4
58.0
18.0
10.8
57.6
0.3
22.6
71.7
0.0
0.0
68.0
40.6
5.4
4.6
0.0
31.0
46.9
50.0
29.8
82.8
15.0
0.0
0.7
4.6
22.8
0.0
0.0
46.7
1.0
83.4
9. MALAYSIA
1
1.00
1.00
1.00
-1.00
0.00
1.00
1.00
0.00
0.00
1.00
0.00
1.00
1.00
0.00
0.00
-0.98
0.98
1.00
0.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.67
1.00
-1.00
0.00
1.00
1.00
0.00
0.00
0.77
1.00
1.00
1.00
-1.00
0.90
TSI
1985
1.00
0.92
0.88
1.00
1.00
0.00
0.00
-0.28
0.00
0.00
0.00
1.00
0.00
1.00
0.89
0.00
0.00
1.00
1.00
1.00
0.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.05
1.00
1.00
0.00
1.00
0.48
0.00
0.00
0.12
1.00
-0.85
0.00
1
1982
1.00
^ -4
SITC
511
512
513
514
515
516
519
522
523
524
525
531
532
533
541
542
551
553
554
562
571
572
573
574
575
577
579
581
582
583
584
585
591
592
593
597
598
611
612
613
621
625
1978
1.00
-0.90
1.00
1.00
1.00
0.00
0.00
0.00
1.00
0.00
0.00
1.00
-1.00
0.00
1.00
0.00
0.00
0.00
0.00
1.00
0.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
-1.00
1.00
1.00
0.00
1.00
0.00
0.00
0.00
0.93
0.00
1.00
0.00
-1.00
0.44
0.89
1988
-0.02
-1.00
-0.60
1.00
1.00
1.00
0.00
0.71
1.00
0.00
0.00
0.98
-1.00
0.99
0.46
0.99
1.00
0.99
0.23
1.00
0.00
1.00
0.87
0.33
1.00
0.00
1.00
0.45
1.00
1.00
0.00
0.00
1.00
0.88
0.00
0.00
-0.90
0.98
1.00
0.00
-1.00
0.95
1991
0.92
-1.00
-0.13
1.00
1.00
0.98
0.00
0.96
0.99
1.00
1.00
1.00
-1.00
0.94
0.16
1.00
1.00
0.84
-0.24
0.89
1.00
1.00
1.00
0.95
0.99
0.00
1.00
1.00
0.97
1.00
0.00
0.00
-0.75
0.51
0.00
1.00
-0.96
-0.38
1.00
0.00
-1.00
0.71
1978
0.0
10.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.3
0.0
0.0
0.0
0.0
0.0
0.0
6.5
0.0
0.0
0.0
0.0
56.5
1982
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.1
1.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
33.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
23.1
0.0
0.0
0.0
0.0
10.5
IIT I
1985
0.0
8.3
11.9
0.0
0.0
0.0
0.0
72.2
0.0
0.0
0.0
0.0
0.0
0.0
11.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
94.7
0.0
0.0
0.0
0.0
52.4
0.0
0.0
88.1
0.0
14.9
0.0
0.2
11.3
1988
98.1
0.5
39.7
0.0
0.0
0.0
0.0
28.5
0.0
0.0
0.0
1.5
0.0
1.1
53.9
1.3
0.0
1.0
77.4
0.4
0.0
0.0
12.9
67.1
0.0
0.0
0.0
54.5
0.1
0.0
0.0
0.0
0.0
12.5
0.0
0.0
9.9
1.8
0.0
0.0
0.0
4.6
313
1991
8.0
0.2
86.6
0.0
0.0
1.9
0.0
3.9
0.7
0.0
0.0
0.0
0.0
6.3
83.7
0.0
0.0
16.4
75.5
11.1
0.0
0.3
0.0
5.1
1.2
0.0
0.0
0.0
3.3
0.0
0.0
0.0
25.3
49.0
0.0
0.0
3.7
62.1
0.0
0.0
0.0
29.5
SITC
62$
629
633
634
635
641
642
651
652
653
654
655
656
657
658
659
661
662
663
664
665
666
667
668
669
671
672
673
674
675
676
677
678
679
681
682
683
684
685
686
687
689
691
692
693
1978
1.00
0.00
0.00
0.00
1.00
1.00
0.00
-0.38
-0.93
0.77
1.00
1.00
1.00
0.75
1.00
-1.00
1.00
0.00
1.00
0.00
1.00
1.00
0.00
0.00
0.00
0.00
1.00
0.00
1.00
1.00
0.00
1.00
1.00
0.00
0.00
0.00
0.00
1.00
0.00
0.00
-1.00
0.00
0.00
0.14
1.00
1982
0.86
0.00
1.00
-1.00
-0.49
1.00
0.98
-0.40
0.15
0.99
1.00
1.00
1.00
0.86
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
0.00
0.00
0.00
0.00
1.00
1.00
1.00
1.00
0.00
0.97
1.00
1.00
0.00
1.00
0.00
1.00
0.14
0.00
-1.00
0.00
1.00
1.00
1.00
1985
0.51
0.00
1.00
-1.00
1.00
1.00
0.67
-0.62
0.86
0.80
-1.00
1.00
1.00
0.97
1.00
1.00
1.00
1.00
0.99
1.00
1.00
1.00
0.00
0.00
0.00
-1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
0.00
1.00
-1.00
0.99
-1.00
1.00
-1.00
0.00
1.00
1.00
1.00
1988
0.00
0.83
0.00
-1.00
0.90
1.00
0.96
0.05
0.82
0.84
0.90
1.00
1.00
1.00
0.98
1.00
0.00
-0.86
0.97
0.71
0.99
1.00
0.00
0.00
0.00
-1.00
1.00
1.00
0.95
1.00
1.00
1.00
1.00
1.00
0.00
1.00
0.00
0.99
-1.00
1.00
-1.00
0.00
1.00
0.63
1.00
1991
0.00
0.57
1.00
-1.00
-1.00
1.00
0.78
-0.04
0.61
0.91
1.00
1.00
0.59
0.97
0.93
1.00
0.45
-0.60
0.88
0.91
0.93
0.76
0.00
0.00
0.00
-1.00
0.00
0.96
1.00
1.00
0.99
1.00
0.98
0.99
1.00
1.00
0.00
0.90
1.00
0.00
-1.00
1.00
1.00
0.91
0.38
1978
0.0
0.0
0.0
0.0
0.0
0.0
0.0
62.0
6.6
23.2
0.0
0.0
0.0
25.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
85.7
0.0
1982
14.4
0.0
0.0
0.0
50.9
0.0
2.0
59.5
85.2
1.4
0.0
0.0
0.0
14.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.6
0.0
0.0
0.0
0.0
0.0
0.0
85.7
0.0
0.0
0.0
0.0
0.0
0.0
1985
48.6
0.0
0.0
0.0
0.0
0.0
33.1
38.2
14.4
20.5
0.0
0.0
0.0
2.7
0.0
0.0
0.3
0.0
1.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1988
0.0
16.8
0.0
0.0
10.4
0.0
3.7
95.2
18.3
16.0
10.3
0.0
0.0
0.2
2.0
0.0
0.0
13.9
2.6
28.6
0.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
5.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1.2
0.0
0.0
0.0
0.0
0.0
37.1
0.0
1991
0.0
43.2
0.0
0.0
0.2
0.0
22.4
96.3
38.9
8.8
0.0
0.5
40.6
3.5
7.4
0.0
54.8
40.3
11.5
9.3
7.3
24.1
0.0
0.0
0.0
0.0
0.0
3.8
0.0
0.0
1.1
0.0
2.1
0.9
0.0
0.0
0.0
9.9
0.0
0.0
0.0
0.0
0.1
9.4
61.8
314
SITC
694
695
696
697
699
711
712
713
714
716
718
721
722
723
724
725
726
727
728
731
733
735
736
737
741
742
743
744
745
746
747
748
749
751
752
759
761
762
763
764
771
772
773
774
775
1978
1.00
0.13
0.74
1.00
0.86
0.00
0.00
1.00
0.00
1.00
0.00
1.00
1.00
0.00
1.00
0.00
0.00
0.00
0.75
0.00
0.00
0.00
0.40
0.08
0.98
-0.14
1.00
0.00
-1.00
0.00
0.00
0.00
1.00
1.00
0.00
-1.00
0.00
1.00
0.98
0.29
1.00
1.00
1.00
1.00
0.93
1982
1.00
0.96
1.00
1.00
1.00
1.00
0.00
1.00
0.00
0.99
1.00
0.00
0.00
1.00
1.00
0.00
1.00
1.00
0.83
0.00
0.00
0.00
1.00
0.63
-0.90
1.00
1.00
1.00
1.00
0.00
0.00
0.00
0.71
1.00
0.00
0.00
1.00
1.00
0.93
0.30
0.63
-0.32
1.00
1.00
0.75
1985
1.00
0.88
1.00
1.00
0.87
1.00
0.00
0.39
0.00
1.00
1.00
-0.20
0.00
1.00
0.81
1.00
1.00
0.00
0.95
0.00
0.00
0.00
0.17
1.00
0.86
1.00
0.95
0.99
1.00
0.00
0.00
0.00
0.99
1.00
-0.61
-0.53
1.00
1.00
0.98
-0.30
0.90
0.55
1.00
1.00
0.61
1988
0.83
0.97
1.00
1.00
0.90
0.00
0.00
1.00
0.00
-0.84
1.00
0.97
1.00
1.00
0.99
1.00
1.00
0.00
0.80
1.00
1.00
1.00
0.00
0.83
0.99
1.00
0.33
1.00
0.90
1.00
1.00
1.00
0.80
1.00
0.28
0.92
1.00
0.99
0.99
0.52
-0.54
0.66
0.19
1.00
1.00
1991
0.89
0.98
1.00
1.00
0.43
1.00
0.00
0.69
-0.39
-0.41
1.00
0.16
1.00
-0.52
1.00
1.00
1.00
-0.85
0.95
0.99
1.00
1.00
0.00
0.58
0.98
1.00
0.65
1.00
1.00
0.37
1.00
0.98
0.94
-0.84
-0.91
0.49
0.79
0.75
0.31
0.74
0.79
0.84
0.98
0.43
0.98
1978
0.0
87.5
25.6
0.0
14.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
25.0
0.0
0.0
0.0
60.0
92.3
1.6
85.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.1
71.3
0.0
0.0
0.0
0.0
7.0
1982
0.0
4.4
0.0
0.0
0.2
0.0
0.0
0.0
0.0
1.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
16.8
0.0
0.0
0.0
0.0
37.0
9.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
28.7
0.0
0.0
0.0
0.0
0.0
7.0
70.1
36.6
68.1
0.0
0.0
25.0
1985
0.0
11.6
0.0
0.0
13.0
0.0
0.0
60.5
0.0
0.0
0.0
80.0
0.0
0.0
18.8
0.0
0.0
0.0
4.9
0.0
0.0
0.0
82.9
0.0
13.7
0.0
5.4
0.6
0.0
0.0
0.0
0.0
0.5
0.0
39.2
46.5
0.0
0.0
1.6
69.9
9.7
44.8
0.0
0.0
39.2
1988
17.4
2.7
0.0
0.2
9.8
0.0
0.0
0.0
0.0
15.9
0.0
3.1
0.0
0.0
0.8
0.0
0.0
0.0
19.9
0.0
0.0
0.0
0.0
17.0
1.1
0.0
67.4
0.0
9.7
0.0
0.0
0.0
20.3
0.0
71.7
8.3
0.0
1.1
0.6
47.8
45.9
34.2
80.8
0.0
0.1
315
1991
11.2
1.8
0.0
0.0
57.0
0.0
0.0
30.8
60.8
58.6
0.0
84.2
0.0
47.6
0.2
0.0
0.0
15.1
5.3
0.7
0.0
0.0
0.0
41.9
2.5
0.0
35.0
0.1
0.5
63.5
0.5
1.9
5.8
16.5
9.1
51.3
21.4
25.0
69.4
26.1
21.3
15.7
2.4
57.1
2.2
SITC
776
778
781
782
783
784
785
786
791
792
793
811
812
813
821
831
841
842
843
844
845
846
847
848
851
871
872
873
874
881
882
883
884
885
891
892
893
894
895
896
897
898
899
1978
-0.67
0.09
0.00
0.00
0.00
1.00
0.00
1.00
1.00
0.00
0.99
0.00
-1.00
0.00
0.50
1.00
0.00
1.00
1.00
0.00
1.00
1.00
1.00
-1.00
1.00
0.00
0.00
0.00
1.00
1.00
1.00
1.00
-0.61
0.17
0.00
1.00
0.93
0.31
1.00
0.00
1.00
0.59
1.00
1982
-0.90
0.97
0.79
1.00
0.00
1.00
1.00
1.00
1.00
-1.00
1.00
0.00
1.00
0.00
0.45
1.00
0.00
1.00
1.00
0.80
1.00
0.00
1.00
0.65
1.00
0.00
1.00
1.00
0.26
1.00
1.00
0.48
1.00
1.00
0.00
0.96
0.98
0.42
1.00
0.00
1.00
0.35
1.00
1S85
0.01
0.38
1.00
1.00
0.00
1.00
-1.00
0.00
1.00
0.67
0.05
0.00
1.00
0.00
0.80
1.00
0.00
1.00
1.00
1.00
0.00
1.00
1.00
-0.76
1.00
0.00
0.43
1.00
-0.06
1.00
0.00
-0.11
0.43
1.00
0.00
-0.19
0.95
0.90
1.00
0.00
1.00
0.85
1.00
1988
0.25
0.47
-1.00
1.00
0.00
0.99
0.00
1.00
1.00
-1.00
0.50
0.00
-1.00
0.63
-0.60
1.00
1.00
1.00
1.00
0.00
0.82
0.89
0.00
-0.98
1.00
0.73
-0.08
1.00
0.66
-0.84
0.00
0.10
0.54
1.00
1.00
0.59
0.14
0.95
0.88
0.05
0.73
0.95
0.65
1991
0.45
0.17
1.00
1.00
0.00
0.71
-0.40
1.00
1.00
0.52
1.00
0.00
0.88
0.54
-0.76
0.95
-0.15
0.70
-0.95
-0.80
-0.99
0.95
0.00
-0.64
0.99
0.93
-0.17
0.21
0.81
-0.22
0.69
0.46
0.01
-0.05
1.00
0.11
-0.14
0.85
-0.26
-0.98
1.00
0.94
0.88
1978
33.3
90.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1.0
0.0
0.0
0.0
50.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
39.0
83.3
0.0
0.0
7.0
69.3
0.0
0.0
0.0
40.7
0.0
1982
9.8
2.6
20.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
54.5
0.0
0.0
0.0
0.0
20.0
0.0
0.0
0.0
34.9
0.0
0.0
0.0
0.0
73.6
0.0
0.0
52.2
0.0
0.0
0.0
3.9
1.9
58.4
0.0
0.0
0.0
65.2
0.0
1985
98.9
62.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
33.3
94.6
0.0
0.0
0.0
20.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
24.4
0.0
0.0
57.1
0.0
94.2
0.0
0.0
89.5
57.1
0.0
0.0
81.3
4.8
9.8
0.0
100.0
0.0
15.4
0.0
1988
74.5
53.0
0.0
0.0
0.0
1.1
0.0
0.0
0.0
0.0
50.0
0.0
0.0
37.5
40.2
0.0
0.0
0.0
0.0
0.0
18.2
11.0
0.0
2.1
0.0
26.8
92.1
0.0
34.5
16.1
0.0
90.0
45.9
0.0
0.0
41.3
86.2
4.9
11.9
94.7
27.0
5.4
35.1
1991
55.0
82.7
0.0
0.0
0.0
29.3
60.4
0.0
0.0
47.6
0.3
0.0
12.0
46.5
23.7
4.7
84.6
30.0
4.5
20.0
1.1
4.6
0.0
35.6
1.4
6.6
83.3
78.8
19.1
78.1
30.8
53.9
99.3
95.2
0.0
88.6
86.3
15.3
74.5
2.1
0.0
6.2
12.0
316
10. CHINA
SITC
511
512
513
514
515
516
522
523
524
525
531
532
533
541
542
551
553
554
562
571
572
573
574
575
577
579
581
582
583
584
585
591
592
593
597
598
611
612
613
621
625
629
1978
-1.00
-1.00
1982
TSI
1986
0.53
-0.31
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
0.00
-1.00
-1.00
-1.00
-1.00
0.00
-1.00
-1.00
-1.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.98
0.88
0.00
0.00
0.00
-1.00
0.00
0.00
-0.12
-1.00
0.00
-1.00
0.00
1.00
0.00
1988
0.80
-0.76
-0.02
0.07
-0.58
-1.00
-0.95
-0.84
-1.00
-1.00
-0.58
-1.00
-0.76
-1.00
-1.00
-1.00
-1.00
0.99
1.00
0.91
1.00
0.91
1.00
0.27
-1.00
0.00
0.00
0.96
0.00
0.00
0.00
1.00
1.00
0.00
0.00
0.59
-0.91
0.00
-1.00
-0.83
1.00
0.00
1991
0.13
-0.29
0.49
-0.72
-0.99
-0.61
-0.99
-0.91
-1.00
-1.00
-0.90
0.06
0.94
-1.00
-0.99
-1.00
-0.70
0.84
0.94
0.90
0.99
-0.96
0.98
0.41
0.00
1.00
0.90
0.72
1.00
0.00
0.00
-1.00
0.29
0.00
-0.58
0.12
0.78
1.00
-0.85
-0.69
1.00
-0.80
1978
0.0
0.0
1982
HTI
1986
46.9
69.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1.5
12.4
0.0
0.0
0.0
0.0
0.0
0.0
87.6
0.0
0.0
0.0
0.0
0.0
0.0
1988
19.5
23.6
97.5
93.4
42.4
0.0
5.2
15.7
0.0
0.0
41.5
0.0
23.5
0.0
0.0
0.0
0.0
1.4
0.1
8.7
0.0
9.4
0.0
73.4
0.0
0.0
0.0
4.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
40.8
9.4
0.0
0.0
16.7
0.0
0.0
1991
86.7
70.6
50.5
27.9
1.3
38.5
1.3
9.4
0.0
0.0
9.9
94.1
6.1
0.0
0.8
0.0
29.6
15.9
6.4
9.8
0.6
4.2
1.6
59.5
0.0
0.0
10.0
28.4
0.0
0.0
0.0
0.0
70.9
0.0
41.8
88.3
22.1
0.0
15.1
31.3
0.0
20.3
317
1982
1986
-1.00
0.00
-1.00
1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
0.98
0.00
-1.00
-0.71
0.00
-1.00
-1.00
-1.00
1.00
1.00
1.00
1.00
0.00
1.00
1.00
0.00
0.00
0.77
-1.00
1.00
-1.00
-1.00
0.00
-1.00
0.00
0.00
-1.00
0.00
-1.00
-1.00
0.00
1988
-1.00
0.88
-1.00
0.67
0.94
-0.97
-0.96
-0.89
-1.00
0.65
-0.50
0.74
-0.52
-1.00
0.94
-1.00
-0.93
-0.92
-1.00
-1.00
-1.00
-1.00
-1.00
1.00
0.00
1.00
1.00
0.00
0.51
1.00
0.00
-0.85
-1.00
-0.97
1
1978
-0.84
-1.00
-1.00
0.00
1.00
-0.47
0.00
-0.81
-1.00
-0.38
1991
-1.00
0.84
-0.99
0.95
0.85
-0.79
-0.59
-0.47
-0.94
0.94
0.76
0.92
-0.93
-0.86
-1.00
o
SITC
633
634
635
641
642
651
652
653
654
655
656
657
658
659
661
662
663
664
665
666
667
671
672
673
674
675
676
677
678
679
681
682
683
684
685
686
687
689
691
692
693
694
695
696
697
-0.91
-0.61
-0.94
-0.81
41.89
-1.00
-1.00
-0.04
1.00
0.91
-0.81
0.94
0.53
0.03
-1.00
0.33
1.00
-0.89
-1.00
-0.99
-1.00
-1.00
0.89
-0.68
-0.42
-0.30
-0.66
-0.84
0.20
1978
1982
1986
0.0
0.0
0.0
0.3
0.0
0.1
0.0
0.4
0.0
0.0
0.0
0.0
0.0
0.0
1.9
0.0
0.0
29.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
22.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1988
0.0
11.8
0.0
32.8
6.5
2.8
3.8
11.0
0.2
34.7
50.3
26.3
48.0
0.0
6.2
0.0
7.5
8.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
49.0
0.3
0.0
15.0
0.0
3.5
0.0
15.7
0.0
0.0
0.0
0.0
52.9
0.0
19.0
0.0
62.4
318
1991
0.0
15.6
1.0
5.4
14.6
21.5
41.3
52.6
5.7
6.0
23.7
8.4
7.1
13.6
0.0
0.0
8.9
38.9
6.2
19.4
11.0
0.0
0.0
96.1
0.0
8.8
18.8
5.9
47.1
96.8
0.0
66.9
0.0
10.9
0.2
0.6
0.0
0.0
11.3
31.7
57.6
70.2
33.7
15.9
79.6
1978
1982
1986
-0.39
0.00
0.00
0.00
-1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-1.00
0.00
0.00
0.00
1988
-0.99
0.00
1.00
0.00
-1.00
1.00
0.00
0.00
0.00
0.99
0.00
-0.99
0.63
0.99
-1.00
1.00
-0.73
0.00
0.67
1.00
1.00
1.00
-0.28
1.00
-1.00
-1.00
-1.00
1.00
SITC
699
711
713
714
716
718
721
722
723
724
725
726
727
728
731
733
735
736
737
741
742
743
744
745
746
747
748
749
751
752
759
761
762
763
764
771
772
773
774
775
776
778
781
782
783
1.00
0.00
1.00
0.00
-1.00
-1.00
-1.00
-1.00
1.00
0.00
1.00
0.99
-0.81
1.00
1.00
1.00
1991
-0.26
1.00
-0.13
-1.00
-0.93
-1.00
0.32
-1.00
-0.86
0.93
0.78
0.75
0.70
0.93
-0.15
0.39
-0.89
0.00
0.09
0.89
-0.89
0.18
-0.42
0.30
-0.99
-0.43
0.00
0.96
-0.93
-0.55
-0.47
1.00
-0.75
-0.98
0.52
-0.51
0.29
0.97
-0.66
0.54
0.91
-0.60
0.97
-0.91
1.00
1978
1982
1986
60.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1988
0.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1.2
0.0
1.4
37.1
1.4
0.0
0.0
27.2
0.0
33.3
0.0
0.0
0.0
72.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1.5
19.0
0.0
0.0
0.0
1991
73.5
0.0
87.4
0.0
6.8
0.0
67.8
0.0
13.6
7.1
22.5
24.9
30.3
7.4
85.2
60.7
10.8
0.0
91.0
11.5
11.3
82.1
58.3
70.2
1.0
57.1
99.8
4.4
6.9
45.4
53.1
0.0
25.1
2.0
47.8
48.6
71.3
2.7
33.7
46.0
9.5
39.7
3.3
8.9
0.0
319
SITC
784
785
786
791
792
793
811
812
813
821
831
841
842
843
844
845
846
847
848
851
871
872
873
874
881
882
883
884
885
892
893
894
895
896
897
898
899
1978
1982
1986
0.00
0.00
0.00
0.00
0.00
1.00
0.00
0.00
0.00
0.00
-1.00
0.00
-1.00
0.00
0.00
0.00
0.00
0.00
-1.00
-1.00
0.00
0.00
0.00
-1.00
0.00
-1.00
0.00
-1.00
0.00
0.00
-1.00
1.00
-1.00
0.00
0.00
0.78
-1.00
1988
1.00
-1.00
1.00
0.00
0.00
0.00
0.00
0.00
-1.00
-0.99
0.40
0.00
-0.96
-1.00
-1.00
-0.33
0.22
0.00
-0.31
-0.23
-1.00
0.00
0.00
-0.98
-0.70
-1.00
0.00
-1.00
-0.94
-0.56
-0.48
-0.80
-1.00
-1.00
-1.00
0.92
-0.98
1991
-0.81
-0.79
0.98
-1.00
1.00
0.01
-0.20
-0.66
-0.96
-0.88
-0.51
-0.78
-0.74
-1.00
-1.00
-0.92
-0.20
0.00
-0.12
0.03
-0.83
-0.81
-0.81
0.09
-0.73
-1.00
0.00
-0.37
-0.78
0.39
0.62
-0.54
-0.80
-0.11
0.07
0.07
-0.65
1978
1982
1986
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
22.1
0.0
1988
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.5
59.6
0.0
4.2
0.0
0.0
66.7
78.3
0.0
68.8
77.1
0.0
0.0
0.0
1.7
29.9
0.0
0.0
0.0
6.1
44.0
51.9
20.5
0.0
0.0
0.0
7.6
1.9
320
1991
18.9
21.1
2.0
0.0
0.4
98.7
80.0
34.2
3.6
11.6
48.6
21.5
26.3
0.0
0.0
7.8
80.1
0.0
87.6
96.9
16.5
18.7
18.8
91.2
26.8
0.0
0.0
63.4
21.6
61.2
38.4
45.8
19.9
89.1
93.3
92.9
35.3
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KOREAN NATIONAL SYSTEM OF INNOVATION: ITS CHARACTERISTIC

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Copyright by Jayoon Koo 1995

THE GRADUATE SCHOOL OF INTERNATIONAL STUDIES

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KOREAN NATIONAL SYSTEM OF INNOVATION: ITS CHARACTERISTIC

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government for advancing

industrial technologies; and 3) a social environment conducive to technological

learning and efficient adaptation to a changing environment by way of organiza

Empirical investigation shows that Korea has been

strategically positioned as an intermediate link between Japan and the United

Statement of the Problem.......................................................

Purpose and Objective of the Study.......................................

Korean National System of Innovation Supporting

Major Working Assumptions andMethodology ......................

Major Working Assumptions

Structure of the Study .................................................................

A CRITICAL ANALYSIS OF THE THEORIES OF THE DIFFUSION

Economic Theories of Technological Diffusion ........................

National Systems of Innovation ..............................................

Major Proponents of National System of Innovation

Technology Gap/Catching Up Theory

The Need for a New Theory

INDICATORS OF TECHNOLOGICAL CAPABILITY AND ECONOMIC

The Stock of Technological Knowledge ..............................

Technological Change in an Input-Output Framework .........

Summary of Industry Trend in R and S

Technological Balance of Payment

THE CHARACTERISTIC FEATURES OF THE KOREAN NATIONAL

The Role of Private Firms in Improving Technological

The Economic Environment and the Characteristics of

Establishment of Institutional Foundations for

Social Movement for Creating a Climate Conducive

V. INNOVATION SYSTEM OF A FIRM BUILDING UP TECHNOLOGICAL

Why Was Sam Sung Electronics Company Chosen?

The Growth of SEC Through Learning and Institutional

Start - Up Period (1969 - 1971)

Human Resource Management

THE POSITIONAL CHARACTERISTICS OF THE KOREAN NATIONAL

The Evolutionary Development of the International

The Relationship Between Technological Change

Political Economy of Koreas Technological

A Classification of Manufactured Good By Use (Based on

B. Trade Specialization Index (TSI) and Intra-Industry Trade

SELECTED BIBLIOGRAPHY ...................................................................................

VII. SUMMARY AND CONCLUSIONS

Technology Stock Based on Accumulated R & D

Technology Stock Based on Patent and Technology Import

Degree of Substitutions (R )................................................................ 4S

Degree of Fabrications (S ).................................................................

Summary of Industry Trend in R and S (75 - 78 )..............................

Summary of Industry Trend in R and S (80 - 8 8 )..............................

Major R&D Indicators in Korea

Trends of Industrial property Rights Applied By Korean and

Status of Foreign Applications Filed By Korean Nationals

Technological Balance of Payments