You are on page 1of 4

Examine the trend of the market catching-up with a view to link the market share trend with the

trend
of technological capabilities.

It is shown that those industries, which show steady increase of market shares, include automobiles, D-
RAM, and mobile phones

A dramatic setback is most clear in the case of computers, in which Korean shares declined from a 7.22%
peak in 1989 to a mere 1.76% in 1995.

 Share I is share of Korea exports in world exports.


 Share II is share of Korea exports in world top seven country’s exports.

Standard International Trade


Classification (SITC) is a classification of
goods used to classify the exports and
imports of a country to enable comparing
different countries and years. The
classification system is maintained by
the United Nations.

Growth Rate Formula:

Or
The consumer electronics and personal computers all show the slowdown of export growth.

Model developed in Section 2, which defines market shares as a function of technological capabilities
among other things

A. For example, the continuing increase of market shares in D-RAM is supported by the sustained
increase of technological capabilities, whereas PCs have been losing shares as the one-time high
market share was based only on cost advantage but had no solid basis of technological
capability building.
B. Increasing market shares in automobiles are supported partly by the increasing technological
capabilities and partly by price edges, and their not so-high market shares reflect the still
significant existing gaps in technological capabilities
C. The same is true of machine tools where Korean firms are very slowly increasing their
technological capabilities. One of the reasons for the lower market shares, compared to
automobiles, is simply that cost advantages are less important for machine tools than for
automobiles.
Technological catch-up to technological regimes:
Although this will be mainly done in Section 4 presenting detailed qualitative studies of the six
industries, before doing that, let us present here some informative figures on the nature of
technological regimes of the different industries and one indicator of the relative degree of catching-up.

We note the four industries, which show a higher-than-average frequency of innovation measured by
the number of patents. They are

1) Personal computers
2) D-RAM
3) Consumer electronics
4) Sound and communication equipment.

Technological trajectory:

Technological trajectories can be defined as the paths by which innovations in a


given field occur.
Automobiles, machine tools and D-RAM to be less fluid than those of telecommunications, PC and
consumer electronics. Two reasons: product ages and the currently unfolding technological
development.

These figures imply that Korean catching-ups in these industries were supported more
by cost advantages and less by technological capabilities.
When cost advantages disappear, market shares plummet as in PCs and consumer
electronics.
In the case of automobiles, Korean firms are still maintaining cost advantages, which is
the reason for the steady rise in market shares despite a slow catching up in
technological capabilities.

Earlier hypothesis, as derived in Section 2, that the more fluid and frequent the
technological change is, the more difficult technological catching-up will be.
As you notice, patent data presented above can serve only as a measure of speed of
relative catching-up.
But, it does not show how close to the forerunner the Korean firms have actually
advanced in terms of technological capabilities. Since technological capabilities is more
than that can be represented by patent data but also include both explicit and tacit
knowledge, we have no choice but to rely on qualitative measures.