Revisiting South Korean industrial development and innovation policies: from implementation capability to design capability

ABSTRACT This study examines the effects of two types of technological capabilities, i.e. implementation and design capabilities, across different industrial development stages, and coherent yet evolving innovation policies to foster each of the technological capabilities. This framework provides a theoretical basis to analyse the two different types of non-continuous transitions between the stages of industrial development. It also explains that these transitions come from the accumulation of technological capability led by deliberate policy intervention to manage the transition process. The Korean industrial development experience shows how the country’s innovation policies and following upgrades in technological capability led to successful transitions of industries. The lessons from Korean development provide strong policy implications to countries facing slowdowns during industrial transitions, and explain the slowdowns from the perspective of two distinct technological capabilities.