ECONOMY OF KOREA (October 4th)

1. Concepts

Source: South Korean Flag. [Online]. Available at: http://www.gettyimages.com/detail/86805622/Comstock-Images

Newly industrialized countries (NICs): these are countries that recently increased the portion of their national production and exports, derived from industrial operations. In the Asiatic case most important example of NICs is “four tigers” that include Hong Kong, South Korea, Singapore and Taiwan. (Wild, 2004: p. 133)

Knowledge based economies:  these are economies which are directly based on the production, distribution and use of knowledge and information. [...] economic growth is based on high-technology investments, high-technology industries, more highly-skilled labour and associated productivity gains. The term “knowledge-based economy” results from a fuller recognition of the role of knowledge and technology in economic growth. Knowledge, as embodied in human beings (as “human capital”) and in technology, has always been central to economic development (OECD, 1996)

2. Question

 Which have key factors been in Korea’s economic development?

History of South Korea was marked by the relationship with North Korea, a country which has a different economy and political system. But after the partition of the Korean territory, in 1948, South Korea has increasingly becoming in a country with a strong economic performance and with a high level of industrialization. According to The World Factbook of the CIA (2010), “Since the 1960s, South Korea has achieved an incredible record of growth and global integration to become a high-tech industrialized economy. Four decades ago, GDP per capita was comparable with levels in the poorer countries of Africa and Asia”

Nowadays, South Korea is the third largest economy in Asia and the 13th in the world (BBC, 2010) and one of the most exporter countries of electronic goods and cars. But it is the result of a transition process that has been supported by international institutions such as the World Bank (Korea is member since 1955) and the Organization for Economic Cooperation and Development (OECD), in which Korea access in 1996.

In a book called “Korea and the Knowledge based economy: making the transition” the OECD and The World Bank (2000) identified the key areas for the Korean development and all of them response to be knowledge-based economy, that is, increases in scientific understanding and very rapid advances in Information and Communication technologies (ICTs) oriented to gain more competitiveness. The transition included four main areas:

• Economic incentives and institutional regime: to have a more flexible economy and to become in a market economy. This area implied reforms in products, financial, labor, knowledge and industrial markets. 
• Education, training and human resources management: the country has one of the highest investments in education. 
•  Information infrastructure: in this area, the country has strength because of the production of electronic goods for telecommunication. The country captured advancing technologies to create a competitive advantage. 
•   Innovation system: it comprises firms, science and research centers, universities and other organizations that facility knowledge appropriation.

 On the other hand, as most of emerging or new industrialized countries. Korea has a long term strategy that supports its aims and its inversion in strategic sectors such education and innovation and gives it a way to face economic challenges. 

3.  Point of view

I have always believed that investments in education, technology, science and cultural activities are the best way to achieve development, not only economic but also social development. For this reason, I think that Korea is an amazing example of this:  A country that understands the importance of “human capital” into its economy as the best engine for progress and tries to use its capabilities and strengths in order be a better position internationally.

Besides, I think that South Korea is an excellent example for Latin countries, since, many scholars talk about the similarities among Korea and Latin countries and I think that like Korea, Latin countries can be stronger economically using all potentials of the region, including the “Human Capital”. On the other hand, I think that Latin countries should have a closer relation with Korea, because it could be a partner for commerce and cooperation in order to transfer knowledge in several topics.

BIBLIGRAPHY

BBC (2010). South Korea country profile.[Online]. Available at: http://news.bbc.co.uk/2/hi/africa/country_profiles/1123668.stm

CIA (2010). The World Factbook- South Korea. [Online]. Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/ks.html

OECD (1996) the knowledge-based economy. [Online]. Available at: http://www.oecd.org/dataoecd/51/8/1913021.pdf

OECD and World Bank (2000). Korea and the Knowledge based economy: making the transition. [Online]. Available at:

ooks.google.com/books?hl=en&lr=&id=WS8xNmGBncYC&oi=fnd&pg=PA10&dq=knowledge-based+economy+Korea&ots=oYToo_mkSy&sig=AAr51LrIXHCW6Z2MAPhaJ-2-JTY#v=onepage&q&f=false

Wild, Jj. (2010) .International Business the challenge of Globalization. Pearson. Pag.463