From technological catch-up to innovation-based economic growth: South Korea and Taiwan compared

This paper sets out to analyse the divergent models pursued by South Korea and Taiwan in regard to technological catching-up and their ongoing transition towards innovation-based economies. It is found that South Korea's former high-debt and chaebol-dominated model inclined it to pursue a Schumpeterian scale-based technological development, while Taiwan's former pro-stability, small- and medium-sized-enterprise (SME)-based model tended to favour its emphasis on a neo-Marshallian network-based technological development. It will be argued that the state's approach to economic liberalisation and firms' demand for capital for technological upgrading are the major factors that have underpinned the adjustment efforts of these two countries.