Jitendra Uttam

Korea's New Techno-Scientific State

The article aims to map the process of transformation in the Korean ‘developmental state’ which is evolving into a new ‘techno-scientific state’. In the past, the Korean ‘developmental state’ directed national economic development by decisively controlling the entire financial system. However, after successfully leading economic change for half a century, the role of the Korean state appears to be drastically diminished. The literature that deals with this issue tends to focus on the demise of the ‘developmental state’ and discusses the ‘post-developmental minimalist state’. However, it clearly ignores the strategic role of the state in creating a distinct ‘techno-scientific’ ethos, which has been critical in enhancing Koreas industrial competitiveness in the face of the established Japanese and the emerging Chinese challenges. The hypothesis is that the linkages between techno-scientific and techno-industrial progress can be firmly established only by state power because (a) market forces can push innovation in the same or similar techno-industrial sector but not in a distinct techno-scientific sphere; (b) high uncertainty and high-risk factors constrain the ability of market actors to invent new techno-scientific frontiers. Theoretically, this article is sceptical about the rationale of the neo-liberal ‘minimalist state’ and argues for an enhanced but transformed role of the state in supporting the techno-scientific regime formation. It provides empirical evidence from the experiences of the transforming Korean state. This article argues that the vast policy experience of the Korean State in engineering the ‘economic miracle on the Han River’ can be utilised to establish a distinct techno-scientific regime that can help create a new techno-industrial sector.

Korea’s New Techno-Scientific Strategy: Realigning State, Market and Society to Move Beyond Technological Catch-Up

Being a late-late industrializing country, Korea carefully designed a unique model of technological catch-up led by a ‘developmental state’ (Johnson 1982) and spearheaded by chaebol. The model became operational in two distinct but mutually reinforcing phases: first, an imitation-driven GRI System based on reverse engineering of foreign technologies; and second, a chaebol-led, private sector funded system of corporate R&D. During both phases, an uninterrupted inflow of foreign technology to Korea was supported by Cold War era ‘strategic constraints’ to maintain the U.S.-led ‘alliance system’ aimed at containing the perceived Soviet threat. The dynamic interplay between foreign technology and indigenous R&D efforts paved the way for Korea to substantially bridge its technological divide with the developed world, particularly in the manufacturing sector.1 Korean products from ships to chips, from computers to semiconductors acquired global recognition. Reflecting fierce competition with technologically advanced economies, the R&D budget of Korea has witnessed a phenomenal rise2.

Economic Growth in India and China: A Comparative Study

The author is Research Associate, Centre for East Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi. Economic backwardness in China and India share certain characteristics with preindustrial Europe and Japan. Yet Europe forged ahead in the early nineteenth century and Japan in the late nineteenth century. Furthermore, China started to take off in the late twentieth century leaving India to think about the possible causes of its economic backwardness.’ This situation amounts to an economic paradox .2 It is important to note that the two Asian giants-India and China-embarked on the path of industrialization at the same time with almost similar historical settings. However, the economic growth gap between the two continued to persist. Figures show that during the period of 1978-94, China’s annual per capita gross domestic product (GDP) grew by 8 per cent whereas that of India grew by 3 per cent. Moreover, during the period 1980-90, China’s economy grew by 10.1 per cent whereas that of India grew by 5.8 per cent. In the period 1990-2000 China posted 10.3 per cent growth and India remained at a distant 6 per cent. What factors

Japan’s Collective Capitalism and the Origins of the Asian Model

This chapter identifies the distinctive features of Japanese capitalism, and reviews competing interpretations of how capitalism has evolved in post-war Japan. It argues that ‘collective capitalism’ has been the main organising idea since WWII. Furthermore, the chapter argues that the state has shaped economic institutions in order to achieve specific developmental goals. Industrial policy has been the primary means of state intervention, and it has been increasingly used as a defensive rather than developmental measure. The chapter concludes that the most evidence for change in Japanese capitalism since the founding of the post-war developmental regime has been in policy, rather than ideas or institutions.

Asian Capitalism and the VoC Debate

This chapter first collates the findings of the case studies and uses them to draw conclusions about the nature of Asian capitalism. Capitalist societies across the region differ markedly in ideas, institutions, and policies, but we argue that there is a degree of commonality that constitutes a distinctive approach to capitalist development. Second, the chapter illustrates how our new theory of Asian capitalism enriches conventional understandings of capitalism. The new theory refines both the VoC literature and also the DS thesis. The chapter resolves tensions between the two literatures, and in doing so makes it possible to better understand the world-historic transformation of the Asian region since WWII.

Malaysia’s ‘State Capitalism’ and Thailand’s ‘Alliance Capitalism’

This chapter explains how capitalism in Malaysia and Thailand derived its logical core from the ‘statist developmentalism’ perfected by the first and second generations of Asian capitalism. It identifies diverse socioeconomic orders, marked by variety in nationalism, ethnicity, race, and religion, that produced different types of politics of development. In Thailand, it gave rise to a conservative political constituency that ignored a persistent rural–urban divide. In Malaysia, it provided impetus to a progressive political outreach to Malays through the NEP. Spreading regional production networks, modelled after the ‘flying geese’ pattern, necessitated wider convergence in policies. The different performances of these two societies can be explained by policies that limit the social base of Thai capitalism, and policies aimed at widening the social base of Malaysian capitalism.

Asia Amid the Varieties of Capitalism Debate

This chapter explains how and why Asia has been excluded from debates about capitalist development. The ‘varieties of capitalism’ approach has hitherto been primarily used to analyse Western capitalism, while the ‘developmental state’ (DS) thesis has been the main framework for analysing capitalism in Asia. The chapter illustrates how these separate and yet overlapping literatures can be reconciled, and used as a basis for a new theory of capitalism in Asia. Such as theory is valuable, we argue, because it can provide a more nuanced understanding of the social and political bases of capitalism, how economic agents contest the ends and means of capitalist development, and the variation in the policies used to promote capitalism.

State and Society in Asian Capitalism

This chapter begins by arguing that the DS thesis was a retrospective and revisionist validation of the state-led developmental paradigm in some Asian societies, but not necessarily a genuine theory of capitalism. It next explains how and why Asia has been a notable oversight from the VoC literature. The chapter then reviews prior attempts to reconcile the DS and VoC literatures, and explains why these do not constitute a theory of Asian capitalism. The final section of the chapter outlines methods for analysing how the leaders of Asian societies think about capitalist development, and contestation of the goals of capitalism; how economic agents cooperate, compete, and contest the organisation of capitalism; and how capitalism is furthered through economic policy.

Entrepôt Capitalism in Hong Kong and Singapore

This chapter analyses the development of capitalism in Singapore and Hong Kong. It identifies the similarities between these ‘entrepot economies’ and other Asian DSs, and also how and why the city states are distinct in their own right. These economies, we argue, reacted differently from Northeast Asian DSs to their perceived vulnerability to external threats. The entrepot economies have practiced more open-market forms of capitalism, and they have generally been more reliant on external markets. The city states are also diverging from each other somewhat: Singapore has diverged relatively little from its open-market form of developmental statism, but Hong Kong’s political–economic systems are changing as a result of the territory’s absorption into mainland China.

Confucian Capitalism: ‘Organised from the Top’ in Korea and ‘Reorganised from the Bottom’ in Taiwan

This chapter analyses how the seemingly similar developmental regimes of South Korea and Taiwan produced quite different outcomes. Differing structural-institutional contexts, we argue, explain these outcomes. Korea’s ethnic homogeneity produced a state-business alliance exemplified by the rise of the chaebol, but Taiwan’s ethnic diversity resulted in a lack of trust between the state and business. So the Taiwanese state promoted the growth of smaller firms. Korea’s big business-centred ‘developmental alliance’ helped to ‘organise capitalism from the top’. This narrowed capitalism’s social base. By contrast, Taiwan’s approach ‘reorganised capitalism from the bottom’ and was connected to a wider social base. The chapter illustrates how Korean capitalism’s comparatively lower degree of social embeddedness differs from Taiwan’s more well-embedded form, but converging policies explain exceptional performance in both societies.