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.
Foreword and Acknowledgements
Centre de Développement de l’OCDE
The relationship between industrial and technological catching up and territorial development is a major economic development puzzle, both in theory and in practice. Industrialisation and technological catching up are key ingredients for national development; but there are no automatisms that guarantee that the benefits will be equally distributed across the territory and the society, and that positive backward and forward linkages will be established, thus fostering an inclusive and more resilient production structure. How to support industrialisation avoiding territorial and social exclusion is a common concern for OECD and non-OECD economies. There will be no unique response to this challenge, but there are good policy principles that can be shared and lessons to be learned from the experience of other countries.