Abstract: Developing Technological Capabilities: Technology Transfers and the Korean Synthetic Fiber Chaebols in the 1960s-1970s

Soojeong Kang

Abstract

Capturing the challenges firms face in less developed countries, Nathan Rosenberg (1982) emphasized that technology transfer is "an ongoing activity," the success of which depends on "the domestic capacity to alter, modify, and adapt in a thousand different ways." Conceptualization of that process has resulted in what is referred to in the literature as "technological capabilities," or the acquisition of capabilities in investment, production, and innovation to manage technology and claim mastery. This paper applies this analytical framework to the Korean synthetic fiber chaebols, which helped the textile industry spearhead Korea's economic takeoff in the 1960s-1970s. In the acquisition of technological capabilities, corporate differences were prominent in the investment stage. Basic and detailed engineering of plant projects influenced the firms' choice of technology the most, as they refer not only to the core technology but also to the peripheral technology necessary to make the technology operational in plant settings. The case studies find that detailed engineering may matter as much as basic engineering; that even under the stringent conditions of the Korean industrialization era, the chaebols had options in selecting foreign suppliers of technology; but that once these were established, they tended to persist over time as the chaebols expanded and diversified their production.