The Effect of GRI and ODA in Korean electronics industry development

Abstract

The rapid development of the Korean electronics industry is one of the factors leading to Korea''s miraculous economic growth. Despite the unfavorable conditions (i.e., scarce natural resources and small domestic market) and limited technological base in its early years, in 2019, the Korean electronics industry has become the third-largest electronics producer in the world. To support the development of the sector, the public sector played an active role. The government enacted a series of laws and basic plans to enhance and promote the electronics industry. The government also established several government-funded research institutes (GRIs). They developed the basic/appliance technology, facilitated technology transfer, and trained the experts. At the same time, it would be essential to highlight that Korea was a recipient country of Official Development Assistance (ODA) until 1995. Despite its remarkable growth between the 1970s and 1980s, the country graduated IBRD in 1995. Therefore, this thesis aims to answer two questions. The first question is how these GRIs affected the industrial development of Korea. The second question is what roles the ODA played in this development. To answer these questions, this research conducts a case study of the ''Electronics Technology Project'' funded by the International Bank for Reconstruction and Development (IBRD)/World Bank. This project was implemented to establish a government-funded research institute for the Korean Institute of Electronics Technology (KIET). Therefore, this thesis will describe how the government affected/supplemented industry through the public research institute and how the ODA assisted this move for the recipient country''s economic and social development. The KIET functioned as a bridge between the technology adoption phase and the technology embodiment phase by leading the technology assimilation phase. This institute trained personnel for the industry, recruited Korean experts from abroad, provided research infrastructure, developed technologies, and facilitated technology transfer. At the same time, this institute encouraged the private sector to enter the industry with its successes in developing semiconductor technologies. By studying the case of KIET from its recommendation to the completion, it would be possible to grasp the ideal role of government intervention to the industry and the role of ODA for the recipient country''s economic and societal development through the development of specific/desirable sector.