Additional properties of technology transfer process in the Republic of Korea

During the first and second five-year plans the Republic of Korea faced the necessity of the introduction of new technology. The country did not have its own large research and technology base and began to participate fully in the technology transfer process which was carried out in two ways: by foreign direct investment and by the purchase of licenses abroad. The leading suppliers of technologies were Japan and the USA. The Purchase of licenses dominated over foreign investment in the total value of transferred technologies. The composition of investment changed in line with the economic development of the Republic of Korea - from labor-intensive industries based on using unskilled low-cost labour to capital-intensive heavy and chemical industries. The state tried to regulate the technology transfer process, on the one hand by trying to simplify it, on the other hand by creating the most favourable conditions for the acquisition of quickly rewarding and effective technology. In 1978 - 1978 the law on stimulating foreign investment was amended, in 1984 the liberalization of legislation was continued, oriented at the simplification of the license purchase mechanism. After that, to confirm the contract for the purchase of licenses, a company had just to report about this decision to the relevant authorities and, in case of the absence of objections, the bargain came into force. In general patents and licenses were bought by large companies. Only 1300 firms had bought foreign technologies, 30-40 thousand of small and medium-sized companies were involved occasionally. The assessment of the efficiency was problematic: the Korean counterparts considered that importers supplied outdated technology. Importers, on their turn, answered that they supplied the technology convenient for the Republic. Staff training, prolonged bargaining (18 months on average), and Korean management skills shortage were problems, too. However, the Republic of Korea used transferred technology effectively and it led to the economic growth in the country. The USA and Japan, fearing of competition, were not enthusiastic about importing technology. Later it led Korea to a logical and reasonable step, the development of its own scientific and technological complex, which was in fact accomplished. The Republic of Korea shifted to a new stage of economic development and started to export high-technology goods.

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