Korea's plans postulate a major increase in the role of the machinery industries in investment, production, and exports. Achievement of targets will require a concerted and carefully orchestrated effort. The primary purpose of this report is to present suggestions on policies and institutional arrangements that would affect the development of the program as a whole, as well as measures that would improve the capabilities and performance of existing enterprises. Its central focus is on the market opportunities, a comparison of these opportunities with the economic targets of the Fourth Plan, and the current capabilities of the industries. Development efforts should concentrate on particular product lines to serve domestic and foreign demand and should pursue more effective market diversification. Protectionism in the developed countries is a major impediment. Failure to concentrate on a select number of products and an inability to realize sufficient specialization through a subcontracting system could retard growth. A vigorous research, development, and engineering program would provide needed technology to improve quality of output. An evaluation of current capabilities of a sample of plants highlights deficiencies and indicates types of possible corrective action.