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Industry 4.0: Yet, we still have basic problems
Most, if not all of the policies the South Korean government put in place in the past can be found in our policy prescription. Why have we not succeeded?
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Seoul Tower in winter at Namsan mountain, Seoul, South Korea. (Shutterstock/File)
W
e have been working hard to realize one of the goals of independence as stipulated in the Constitution, namely ensuring the welfare of all citizens. We have achieved quite a lot thus far as, among others, we are now a member of the elite G20 and have just joined the club of 1 trillion dollar gross domestic product (GDP) countries.
During the last 46 years, our GDP per capita has increased 45 times from US$80 in 1970 to $3,570 in 2016. It is faster than Thailand and Malaysia, in which GDP per capita increased by 31 and 27 times respectively, from $192 to $5,907 and from $358 to $9,502 in the same period. However we are trailing China and South Korea, where GDP per capita has grown 71 times and 98 times respectively, from $113 and $279 to $8,123 and $27,539 in 2016.
The economic performance of the latter two countries defied conventional wisdom of economic development and as such are considered “miracles” by many economists. Based on the principle of comparative advantage, a country capitalizes on its resources to promote economic development.
South Korea is poor in natural resources, with only 30 percent of its land area cultivable and arable. Furthermore, arable land per farm household is among the lowest in the world. Nevertheless, over 50 years South Korea has rapidly upgraded its industrial structure, transforming itself from a poor agricultural nation into a global leader in multiple advanced industries, including electronics, automobiles, steel, machinery and petrochemicals.
