Industrial Policy and Territorial Development
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Industrial Policy and Territorial Development

Lessons from Korea

This report reviews the Korean catching up and it analyzes the recent reforms which have been put in place to address the territorial dimension in the design and implementation of industrial policies, with a view to share knowledge and policy experience with emerging and developing economies. Korea is a well known success case, but less is known about the efforts and reforms introduced to factor in the territorial dimension in its national development strategy.  

The report identifies the advances and challenges of the Korean approach to regional development. Results show that beside the specificities of the Korean experience it conveys several lessons for developing countries: i) Planning actions on a multi-annual basis is essential to achieve policy goals in fields such as industrial and regional development where policy outcomes depend on structural changes that will require long term horizons to be materialised and where coordination across several ministries (such as education, infrastructure and access to finance) is needed. ii) It is important to establish mechanisms that ensure a high level political support to regional development as well as to target resources to regions. iii) Supporting industrial development in regions requires designing specific programs beyond administrative boundaries. iv) The space for bottom up initiatives and regional empowerment has to be matched by a gradual approach to build the necessary capabilities at the regional level.

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Publication Date :
16 May 2012
DOI :
10.1787/9789264173897-en
 
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Author(s):
OECD
Pages :
19–23
DOI :
10.1787/9789264173897-5-en

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Korea is a well-known case of successful catching up achieved through an effective government-led export-oriented strategy. It is one of the few countries in the world that has managed radically to transform its domestic economy from one based on agriculture to that of a leading world industrial power, with a constant increase in income per capita and a high growth pattern. The Korean catching up has been the result of a deliberate national development strategy which fostered industrialisation in heavy and chemical industries through sequenced and complementary policy interventions targeting the creation of domestic industrial capacities (through a mix of export promotion and import controls), development of education and skills, infrastructure building and management of capital markets.