Korea's Transition to a Knowledge Economy
The First Report
Policy Lessons for Developing Countries
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Korea's Transition to a Knowledge Economy

The Republic of Korea has been experiencing rapid, and more importantly, sustained economic growth since the 1960s. This has resulted in its real GDP per capita increasing rapidly enabling the once low-income country to join the ranks of high-income industrialized nations within a short time span of four and half decades. Moreover, the majority of this growth can be attributed to knowledge accumulation, rather than to the accumulation of traditional factors of production of capital and labor. 
Korea had achieved this knowledge-based growth by investing heavily in education and training, boosting innovation through intensive research and development, developing a modern and accessible information infrastructure, all coupled with a stable economic and conducive institutional regime that enabled the knowledge-related investments to flourish. Due to this, Korea has ably made its transition to a knowledge economy, that is, an economy that uses knowledge as the key engine of growth. Its successful knowledge-based development experience offers many valuable lessons for developing economies.

 

The First Report

Korea as a Knowledge Economy: Evolutionary Process and Lessons Learned has been jointly produced by the Korea Development Institute and the Knowledge for Development (K4D) Program of the World Bank Institute. It is a follow-up to the joint World Bank Institute-OECD report on Korea and the Knowledge-Based Economy: Making the Transition (2000) that was produced at the request of the Government of Korea. This first report, which targeted Korean policymakers in the main, looked at the Korean economy just after the 1997 financial crisis. It focused on providing knowledge-economy related policy recommendations to overcome the crisis and to prevent the reoccurrence of a similar economic downturn. 

 

 

Policy Lessons for Developing Countries

In contrast, this new report on Korea is geared towards policymakers from developing countries that are in the midst of, or are intending to, embark on the transition towards the knowledge economy. It provides pragmatic policy lessons drawn from Korea’s forty-five years of knowledge-based growth. This report not only looks at the current policies and challenges of today’s high-income Korea, but also reviews its historical economic development since the 1960s when Korea was still a low income country. It follows Korea through the decades as it undertook an array of knowledge strategies that propelled it through the various income levels. The report therefore provides compelling policy lessons that are relevant for developing countries at different stages of economic development.

 

View the launching event for this publication. Please buy the book online.