Post catch-up system transition failure: the case of ICT technology development in Korea

Abstract

'Emerging economies' like Korea in the 2000s face major challenges as they make a transition from (a) a phase of economic development characterised by 'catching up' with the global technological frontier, involving technological 'imitation', to (b) a phase of continuing development based on the development of new knowledge for globally leading (post catchup) product and process innovation. That transition is about accumulating new narrowly defined 'technological' components of innovation capability and changing the broad organisational and institutional context within which the technological (and economic) process of innovation takes place. During the catch-up phase of technological and economic development in successful emerging economies, that institutional dimension of the innovation system evolves particular characteristics that are well adapted to achieving effectiveness in the catch-up mode of innovation. This paper suggests that (1) these institutional characteristics may be less effective with respect to post catch-up innovation and (2) the institutional context adapted for catch-up innovation may not evolve adequately rapidly into the new forms required for effectiveness in post catch-up innovation. Consequently, these rigidities may become a source of lock-in - so contributing an institution-centred source of 'failure in system transition' in the innovation system.