2 - Technology Leverage as Latecomer Strategy

Summary

Attempts to understand the phenomenon of high-technology industrialisation in East Asia have foundered on the apparent contradictions involved when viewed from the dominant Western perspective. It appeared that Japan, and then Korea and Taiwan, were creating hightechnology companies and industries with minimal research and development expenditures, with little evidence of skilled engineering talent, and with minimal investment in brands and marketing outlets. All this contributed to a view that their efforts were superficial at best or ‘cheating’ at worst.

The problem was that these perspectives were not attuned to the special characteristics of industrialisation by catch-up. Such a process clearly involves a very different set of strategies from those developed in the nineteenth and twentieth centuries by Western industrialising countries. Alice Amsden captured the essence of the shift in her phrase ‘industrialisation by learning’, using it to contrast the experience of new industries in NIEs such as Korea and Taiwan in such sectors as steel, shipbuilding or electronics, with previous phases of industrialisation by ‘invention’ (the case of Britain in the eighteenth century) and by ‘innovation’ (the cases of Germany and the US in the nineteenth century). Amsden argues that the East Asian industrialisation experience is essentially a process of catch-up, in which replication of industrial techniques is achieved through ‘learning’, that is, through accelerated acquisition and adaptation of product and process technologies. Thus it is the institutions of ‘economic learning’ which turn out to be the passport to success in these endeavours, rather than the institutions of conventional R&D.