As a strong Yen, the Japanese trade surplus with the US, and the U.S.’ financial deficit since mid-1992 are expected to continue for a considerable period of time, this study explores some measures the Korean government should take in order for Korea’s high-tech industries to gain a competitive advantage.
Korea can take advantage of strong yen to narrow the technological gap with Japan by gaining a competitive advantage in the high-tech industries, rather than seeking short-term profits from the improvement of price competitiveness over Japan.
As Korea is now focusing on technology-intensive items, such as materials, parts, machinery, and industrial infrastructure with the growth of technology and technology-intensive industries, it is supplying domestic production to overseas production bases and advocating related policies at the government level. However, Korea has yet to narrow the technological gap with Japan and improve competitiveness, as it focuses mainly on the localization of specific parts, facility environments, and high-tech goods dependent on Japan. High-tech machinery made in Korea is performing poorly in the global market.
The fundamental reason for Korea to import parts and machinery in high-tech fields from Japan is not because Korea is not capable of producing them, but because Korea does not have the systematized core technology to develop them. Even if Korea starts developing technology to localize the production of specific parts and facilities that have been imported mostly from Japan, Japan will be able to develop new and more powerful products or lower prices by the time Korea develops the technology, rendering Korean-made products less competitive.
In order to develop high-tech machinery and parts-related industries, Korea should make it a goal is to localize core technologies, not to localize the production of the products. To that end, Korea should start making investments in developing next-generation products when businesses in technologically advanced nations develop them. Korea may not be able to develop next-generation products first, but it will be able to narrow the technological gap if it can develop the products businesses in technologically advanced nations introduce to the market in a short period of time.
고기술산업의 경쟁우위와 정부정책(Measures to gain a competitive advantage in the high-tech industries and government policy)
|Series Title; No||정책포럼 / 제86호(9514)|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < Science/Technology|
|Holding||KDI; KDI School|