This study aims to review the industrial policies implemented in the 1970s in Korea and their impacts, and to suggest guidelines for the future industrial policy-making based on basic and urgent tasks implied by the analysis.
Industrial policies attempt to allocate the scarce resources of a national economy such as labor or capital goods across various industrial sectors in an efficient way. Thus seen, the amazingly high growth that Korea had achieved through the 1960s and 1970s reflects an efficient and desirable allocation of resources across sectors based on their respective productivity merits. The rapid growth of the Korean economy was mainly driven by the fast advance of the country’s manufacturing industries, and Korea’s industrial policy regime was characterized by an outward-looking industrialization strategy. However, as the international political and economic order began to transform itself from the 1970s, uncertainty surrounding the export-driven Korean economy has been on the rise.
The heavy and chemical industry sector drive promoted by the Korean government in the 1970s only generated inward-looking industrial structures mainly due to its methodological limitations. Korea must tackle the urgent tasks of export-driven growth, reorient towards higher value-added export goods, less dependence on light industrial goods for export, and more balanced domestic industrial structure.
The strategies to perform the tasks include developing agricultural regions, heightening value-added of light industrial goods, developing products with comparative advantages within the heavy and chemical industry sectors and transitioning to resource-saving industrial structures. The problem with the current measures to support industry and technology is that, although they are not small in overall size and scope, they fail to make appropriate use of incentives with their overly protective nature. Therefore, future industrial policies must focus on re-organizing the industrial support regime, enlarging the domestic market for machinery, promoting contracting in machinery building, and establishing an efficient technology development system.
Reforming industry protection scheme requires import liberalization, overall tariff reduction, removing differences of effective protection across sectors, gradual re-organization, and reforming import regulation and tariff protection for infant industries with the principle of temporary protection in place.
산업정책의 기본과제와 지원시책의 개편방안
|Series Title; No||연구보고 / 82-09|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < General|
|Holding||KDI; KDI School|