7.1 Experiences of Japan and Korea

It has rightly been observed that the success stories of Japan, the Republic of Korea and, to some extent India, have clearly demonstrated the favorable result of direct government intervention. In Japan, multidisciplinary research laboratories with common goal thrived under the directional role of the government. Japan’s success in technology development since the early 1950’s shows the importance of the governmental promotion for innovation activities. Japan has successfully promoted its technological development by concentrating its efforts on industrial innovation, based on import of basic know-how. The interventionist role of the government in the Republic of Korea for technology development pertains to country’s historical tradition and the government plays a vigorous role in encouraging and supporting industry for developing and utilizing technologies.

As far as the guiding role of State in technology transfer and development is concerned, the east Asian experience points to the need to establish a balance between State planning and markets, which accords a substantial role to the state as the executor of a national economic interest. The relationship between state and economy is more organic and multifaceted and the state’s impact on economic changes depends heavily on its broader “non-economic, social and political influences”.

In Japan and the Republic of Korea, the State has acted to guide markets and modeled the competitive process even by the direct coercion against sections of business class, and the distinction between ‘public’ and ‘private’ has been blurred. Intermediate organizations such as industry and farmer’s associations, hybrid state/private institutions acting as ‘transmission belts’ between state and economy, especially the Republic of Korea, have also played an important role. As the experience of these countries shows, the government can identify industries for their up-gradation, and provide stimulation and incentives for industrial growth.