Technology transfer and development : a comparative study of China, South Korea and Japan
It is believed that the more backward a country, the great potential for her to catch up. The history of the modern economic growth, which started in the United Kingdom in 1780, seems to have indicated this. But why has only a tiny group of countries managed to achieve modern economic growth? The neo-classical growth theory, based on the assumptions of constant return to scale, law of diminishing return and perfect competition, failed to explain the key causes of economic growth. The post-war experience of some countries, particularly Japan and South Korea, indicates that some things other than the increase in weighted labour and capital inputs, as claimed by the neo-classical growth theory, may have played a more important role in their rapid economic growth. Technological progress is now regarded by many economists as the most important contributing factors to economic growth. Technological advance generates economic growth through its effect on total factor productivity. However, where the new technologies come from, raining down from heaven as many neo-classical economists suggest, or resulting from the intentional investment as the new growth theory shows, has been an important controversial issue over the past three decades. It is hoped by many that the new growth theory could help to open the 'balck [sic] box' in the near future. This thesis is to examine what role technological advance has played in the economic growth of Japan and South Korea over the past three decades or so. A comparative analysis of China, Japan and South Korea in technology transfer, adaptation and diffusion will also be one of the main tasks of the study. Through this, the study tries to identify the key factors responsible for the successful assimilation and diffusion of new technologies in the Japanese and Korean economies. The main aim of the thesis is not to test the new growth or new trade theories. However, the key elements of the key elements of the new theories have been analysed throughout the study. The present study goes further beyond the areas that have been raised in the new theories. The cultural factor, country's socio-economic background, role of government, role of industrial policies and the character of different institutions will also be examined. The findings of the present study are: economies of scale and external economies have been the important factors for Japan and South Korea to have gained some comparative advantages in petrochemical and electronics industries. Rapid and efficient transfer and diffusion of new technologies have been the driving forces behind the fast economic growth both in Japan and South Korea during the post war period. A highly competent and efficient government, appropriate economic and industrial policies, a disciplined and well educated labour force and close co-operation between the government and the business community and between the management and employees have also played important role in the Japanese and Korean economic success.