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The Republic of Korea has become a leading industrial nation within two generations
Photo: maroke – stock.adobe.com
clusters. A country that was one of the poorest in the world in 1960 has become a leading – and prosperous – industrial nation within two generations. The key question for development theorists and practitioners therefore is: Why aren’t there more Republic of Koreas in the world? This is in line with the ideas promoted by the economist Mariana Mazzucato, the leading representative of the idea of the entrepreneurial state, where the sovereign should act in similar ways to a venture capital fund, creating and investing in markets based on emerging technologies and basic research, filling the gap that risk-averse private capital is failing to close. Mazzucato has a chapter in the book and expands on her concept. She wants the state to act as a market- making investor; one that creates the environment and the market for new technological sectors. After their successful emergence and careful fostering these green sprouts can outgrow infancy and become robust enough to attract private investors, she claims.
perspective, where the Global South bears the ecological destruction caused by pollution and extraction driven by the industrial world. The main theme is the observation that not all industrial policy generates the same economic welfare. This may be stating the obvious. But as we can see from certain countries pushing more towards a service-based economy over industrial production (for example Kenya and India), the idea persists that “a job is a job”. Reality, however, is more complicated. As previously discussed with the economist Jostein Hauge 2 from the University of Cambridge, jobs in industry can have a higher multiplier effect. Take the famous case of the Republic of Korea. Deviating from Ricardo’s theory and ignoring stern warnings from the World Bank the country forged ahead in the 1960s to set up its own steel industry. This is turn became the basis for highly successful industrial development with a globally competitive car and ship building industry and, later, as a producer of state-of-the art electronics and microelectronics in high-tech
Editors Erik S. Reinert and Ingrid Harvold Kvangraven
2 “You can’t leave it entirely to the market,” OPEC Fund Quarterly 1/2025, p. 38
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