Evolution of Industrial Policies and Economic Growth in Korea: Challenges, Crises and Responses

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This paper1 examines the evolution of industrial policies and economic growth in Korea by focusing on the effects of two economic crises in 1997 and 2008. Korea successfully surpassed the two big economic crises with the support of the industrial restructuring policies and the appropriate responses of private and public actors. Past Korean economic growth resulted from the development of manufacturing for export, which were driven by the high growth of Korean conglomerates, chaebols. Active infrastructure investment, such as social overhead capitals and industrial complexes played pivotal roles at the beginning of the economic development. Although input-driven growth strategy led during the initial stage of economic development, innovation-driven industrial policies were magnified later in the focus on R&D and technological progress. In addition, the implementation of region-based industrial innovation policies, such as industrial cluster policies, obtained relatively successful results.