The industrial policies applied in Taiwan and Korean during the 1960s are examined. Following the completion of the process of import substitution in consumer durables and their inputs in the late 1950s, both countries have adopted an outward-looking development strategy with emphasis on the exports of labor-intensive manufactured goods. This strategy has resulted in rapid increases in exports, the expansion of exports in turn has led to an acceleration of economic growth. Exports of labor-intensive manufactured goods have contributed to the growth of the national economies of Taiwan and Korea by utilizing their most abundant resource, labor, and by economizing on their capital, by permitting the use of large-scale production methods and encouraging technical improvements in export industries, and by creating demand for domestic materials, raising incomes, and augmenting the availability of imports. Numerous references.