Rachel Anne NatialMalgun Kim

A 2-2

INDUSTRY OF SOUTH KO-REA

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What is Industry?

economic activity concerned with the processing of raw materials and manufacture of goods in factories (Oxford)

a group of businesses that provide a particular product or service (Merriam-Webster)

Industrialization

the process in which a society or country trans-forms itself from a primarily agricultural society into one based on the manufacturing of goods and services. (investopedia.com)

occurs when industry is introduced on a large scale to a region or country (vocabulary.com)

HISTORY

• Following the Korean war, South Korea was one of the poorest countries in the world. In 1960, its gross domestic product per capita was $79, much lower than that of most of its neigh-boring countries.

• In 1961, General Park Chung-hee seized political power and decided the country should become self-reliant by utilizing five-year plans.

• The chaebol were to be guaranteed loans from the banking sector

• 1962-1966 - Korean economy observed a 7.8% growth, while GNP per capita grew from 83 to 125 US dollars.

• 1967-1971 - The second five-year plan sought to shift the South Korean state into heavy industry by making South Ko-rea more competitive in the world market

HISTORY

• 1971- Saemaul Undong (modernization community-based rural development strategy) was launched.

• 1972-1976 - Park Chung Hee (박정희 ) implemented the third five-year plan which was referred to as the Heavy Chemical Industrialization Plan (HCI Plan) 

• 1977 - By the time of the fourth plan, GNP per capita was 1,000 US dollars.

• In 1979, the second oil shock pushed the Korean economy to harsher standards

• In 1981 – the Korean economy starts to recover

Stages of Industrialization

Commodity export stage Import-substitution industrialization

(ISI) Export-oriented industrialization

(EOI) Balance and stabilization

The Role of Korean firms in Industrial Development

• 1960 – 1970: Korean firms concentrated mainly on basic as-sembly, beginning the manufacture of standard, simple goods often supplying foreign transnational corpora-tions (TNCs), mostly from the USA and Japan, under the sub-contracting arrangement called original equipment manufacturer (OEM).

• 1970 – 1990: Samsung and others learned to not only mas-ter the manufacturing process but also to innovate with manufacturing and product improvement.

• From the mid-1990s onwards, firms learned how to produce original product designs from scratch, and they began to rely more on their own research and development to in-novate.

The Role of Korean firms in Industrial Development

• By the mid-2000s Samsung Electronics had become one of the most successful electronics producers in the world.

• In 2007 it registered 2,725 patent in the USA, nearly as many as the world leader IBM with 3,148.

• In 2006 Samsung spent US$5.6 billion on research and development, employed around 123,000 workers, oper-ated 17 R&D centers around the globe

IMPORTS

Products imported by South Korea:

Crude Petroleum (20%), Petroleum Gas

(6.3%), Integrated Circuits (5.1%),Refined Petroleum (4.7%), and Coal Briquettes (2.8%)

IMPORTS

 Import origins of South Korea:

China (16%), Japan (13%), United States (8.4%), Saudi Arabia (7.0%), and Qatar (4.6%)

EXPORTS

Products exported by South Korea:

Refined Petroleum (9.2%), Integrated Cir-cuits (8.7%), Cars (7.6%), Passenger and Cargo Ships (5.2%), and LCDs (4.3%)

EXPORTS

•  Export destinations of South Korea:

China (23%), United States (11%), Japan (6.9%), Hong Kong (4.8%), and Singapore (4.6%)