South Korean technology policies for the industrial competitiveness between Japan and China

Abstract

(cont.) In addition, this paper will propose new technology policies for Korea in order to secure its position as a leader in the information technology (IT) industry, particularly in the context of its relationships with Japan and China. Lastly, this study recommends that the Korean government foster entrepreneurs to create novel global IT businesses and keep pace with the United States regarding technology development and learn from Japan regarding globalization experiences. This study also suggests that the Korean government focus its research and development (R&D) funds on making electronic materials to enhance competitiveness of domestic IT companies.

In Korea, as in many developing countries, government has played a major role in leading technological development. The technology policies of this government have been aiming to increase the competitiveness of local companies. However, as the new trade system represented by the World Trade Organization (WTO) emerged and Korean companies quickly grew, the Korean government had difficulties in keeping pace. Furthermore, the government began to feel a mismatch between its technology policies and the demands of private companies. For example, in the past, Korean companies had asked the government to make a new exclusive market for their initial products through governmental procurement. However, in order not to violate the new international trade rules, the government could no longer do this. Some say that government should not intervene in private business but let companies make their own decisions, according to market signals. On the other hand, in spite of the bureaucracy they entail, government policies are still necessary as long as the policies are implemented at the right time and in the right direction. This paper will analyze the changes of relationships between the Korean government and private companies in terms of technology policies.