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South Korean development strategyEducational investment has undoubtedly played a significant role in South Korea’s rapid and sustained economic growth. Development strategies have focused on achieving sustained productivity growth by consistently increasing the value-added of output. To achieve this, a highly educated labour force was necessary. In the 1960s, South Korea embarked on the promotion of both export and import-substitution industries, starting with subsistence agriculture (rice) and labour-intensive, light manufacturing sectors (textiles and bicycles). Considerable capital accumulation and investment in primary education during this period allowed a gradual shift up the value-added chain toward more sophisticated commodities. Key to this shift was also the use of technologies obtained through foreign licensing and adapted for domestic production.In the mid-1970s, the government’s use of a well-targeted industrial policy resulted in a major shift to the development of heavy industries (e.g., chemicals and shipbuilding). Along with industrial targeting, policies were enacted to further improve technological capabilities, together with improving access to and quality of technical and vocational training.In the 1980s, South Korea undertook efforts to ensure a market-conducive environment by deregulating various sectors and liberalising trade. Concurrently, it expanded higher education while investing in indigenous research and development through the establishment of the National Research and Development Program.South Korea continued to pursue high value-added manufacturing in the 1990s by promoting indigenous high-technology innovation. Domestic wage hikes and the appreciation of the currency had resulted in chronic current account deficits, which sparked a series of reforms, including the reform of the financial market. Together with the setting up of a modern and accessible information infrastructure, there was continued expansion of research and development capabilities in South Korean industries, which drew on the skilled labour force that had resulted from the government’s expansion of the higher education system.In the aftermath of the financial crisis in the mid-1990s, policy efforts were made to transform the South Korean economy into a knowledge-based one in which innovation could thrive, enhancing overall productivity and thereby sustaining economic growth.Many factors have enabled South Korea’s rapid change. Key amongst these were the building of an information infrastructure and harnessing the potential of science and technology.
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