sábado, 21 de diciembre de 2019

Can we industrialize a country only with light industry?


As the interesting video about the Korean development experience, “the secrets of Korean development”, says (see in the next blog post), South Korea took advantage of everything in its development effort, including the light industry, consisting of exports of clothing, wigs and embroidery, along with a heavy industry that, as always is the case, delayed to bear fruit.
Indeed, the heavy industry, pivoted with the steel industry, the basic industry, but "crawled" in the first place shipbuilding, construction of machinery (then automotive), civil construction, coal, petrochemical and pharmaceutical industry. Since the construction of the Pohang Steelworks, the process of creating world-class industrial export skills was very slow and risky.
Therefore, South Korea contracted with the light industry to save some moments of crisis.
But soon the country realized that this light industry could only provide complementary and short-term support. Based on cheap labor, two things happened:
• I lost competitiveness very soon;
• Profit levels (accumulation) were very low
Therefore, Korea instead focused on strongly retaking the core strategy, improving it with the inclusion of information technology (chip manufacturing), through a strategy of industrial areas and parks, (see post and video) linked to phisical infraestructure and institutions of Science and technology.
The Korean experience can give a lot of light to the often lost industrialization strategy “for export substitution” that they sold to us in the subcontinent, which led us to run aground over and over again in disastrous crises, and that until today continue selling us, with other clothing and names (agro-export? Tourism?).
This blog has proposed lines of industrial development (see post), including steel, special alloys, shipbuilding, petrochemicals, lithium´s transformation, etc., which will be greatly enriched by open and frank discussion.
December 20, 2019

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