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close this bookTechnological Independence The Asian experience (UNU, 1994, 372 pages)
close this folder3. The Republic of Korea
View the documentPreamble
View the documentHistory
View the documentDevelopment policies and strategies from the 1960s to the 1980s
View the documentThe plans
View the documentImpact on the agricultural and industrial sectors
View the documentScience and technology in korea before the 1960s
View the documentThe role of science and technology in recent development
View the documentScience and technology and the exogenous environment
View the documentEducation and training
View the documentResearch and development
View the documentReassessment of the policy and strategy
View the documentAchievements in industrial development
View the documentThe electronics industry as a case-study
View the documentSelf-reliance targets at each stage
View the documentProblems and issues
View the documentFuture plan for self-reliance of science and technology
View the documentThe long-term goals and strategy of national development
View the documentRole of science and technology for future development
View the documentLong-term goal of S&T development
View the documentSumming-up and regional cooperation
View the documentRegional cooperation
View the documentBibliography

Reassessment of the policy and strategy

To attain an equitable distribution of the benefits of growth, the government since the 1980s has made serious efforts to improve living conditions in rural areas and raise the income of rural households. The efforts to improve rural living conditions include setting up bus routes in small farming and fishing villages and constructing nurseries and schools.

Table 4 shows the ratio of paved to total local roads and of rural to urban incomes of households from 1981 to 1984. To raise farm incomes, efforts were made to use arable land fully, increase farm mechanization, and promote floriculture and stock-breeding. To increase non-farm rural incomes, small and medium-size factories were built in rural areas. As a result, the income of rural households now approaches that of urban households.

Table 4. Ratio of paved to total local roads and the ratio of rural to urban household incomes (%)


1980

1981

1982

1983

1984

Paved/total local roads

-

11.0

12.8

18.1

22.3

Rural/urban incomes of households

84.0

96.6

103.2

102.8

99.9

Source: EPB.

To enhance the competitive power of industries, the government reduced its leadership in economic activities and its protection of the domestic market. To promote competition in the market, a fair trade system was established and trade liberalization expanded. To strengthen the competitive power of industries, the government supported small and medium-size firms.

As a result of these efforts to promote competition, R&D investment in industries increased sharply. Table 5 shows the ratio of S&T investment to total GNP from 1980 to 1986. The government has also made efforts to improve the financial structure of the industries. Loans to big enterprises have been restrained. As a consequence, the capital -asset ratio has increased since 1980.

Since 1980, then, the Korean government has implemented some new policies and complemented ongoing policies for the further development of science and technology. Securing enough investment and adequate manpower was now the most important task for S&T development. The government made serious efforts to encourage private investment, first by offering tax incentives. Though tax incentives for R&D activities had been offered in the 1970s, they were not sufficient to induce enough private R&D investment. In the 1980s some new incentives were added and existing ones were strengthened.

The remarkable increase in S&T investment and R&D expenditures is mainly due to the sharp increase in the contributions of the private sector. The share of the private sector in total R&D expenditure increased from 48 per cent in 1980 to 70 per cent in 1984, although the actual performance by industry is somewhat lower than these figures. The difference arises from the fact that industry gives R&D to government-sponsored research institutes and universities.

The Republic of Korea's gradual mastery of technology resulted eventually in technology exports. Such exports in fact began in 1976 with Korean companies participating in construction works in the Middle East. But performance is still poor and technology exports (excluding technical labour and service exports) declined between 1981 and 1984.

Table 5. Investment in science and technology (billions of won)


1980

1981

1982

1983

1984

1. GNP

37,205

45,775

48,088

58,280

63,277

2. Investment in S&T

317

404

526

682

886

3. 2/1

0.85

0.88

1.09

1.17

1.46

Source: MOST, Statistical Year Book of Science and Technology. 1984.