Making a Technological Catch‐up: Barriers and opportunities

Summary

This paper has discussed several issues regarding the barriers and opportunities for technological catch‐up by the late‐comer countries and firms. As one of the barriers to technological catch‐up, the paper emphasizes the uncertainty involved with the third stage of learning how to design. The barriers arise because as the forerunner firms refuse to sell or give license to successful catching‐up firms who thus have to design the product by themselves. The paper discusses how to overcome this barrier. It also notes that if the crisis of design technology is a push factor for leapfrogging, arrival of new techno‐economic paradigm can serve as a pull factor for leapfrogging, serving as a winder of opportunity. The, it emphasized the two risks with leapfrogging, namely the risk of choosing right technology or standards and the risk of creating initial markets, and how to overcome these risks. It discusses how to overcome these risks in leapfrogging, and differentiates diverse forms of knowledge accesses.

Then, the paper takes up the issue of whether there can be a single common or several models for catch‐up. A common element of catching‐up is to enter new markets segments quickly, to manufacture with high levels of engineering excellence, and to be first‐to‐market by means of the best integrative designs. This observation is supported by the fact that Korea and Taiwan has achieved higher levels of technological capabilities in such sectors as featured by short cycle time of technology. The possibility of two alternative models for catch‐up is also discussed in terms of the key difference between Korean and Taiwan, especially in the position toward the source of foreign knowledge and the paths taken toward the final goal of OBM. Taiwan followed the sequential steps of OEM, ODM and OBN, in collaboration or integration with the MNCs. Korean chaebols jumped from OEM directly to OBM even without consolidating design technology.

Key words:

• technological catch‐up
• leapfrogging
• OEM strategy
• Korea
• Taiwan

Notes

This paper draws from a longer paper that was presented at the 2005 Asialics Conference, held in Jeju, Korea, April 2005. This research is supported by the LG Yonam foundation.