Co - evolution of technology and institution in the developing countries

1. Introduction From the 1980s, Korea and Taiwan have switched from a concentration on labour intensive products like textile and toys to technology intensive products such as semiconductors. In the process they had achieved by 1996 the respective positions of 12 th and 14 th largest exporters of merchandise in the world (WTO 1997, p.6). Over the same period, Korea and Taiwan have also increased their technological and scientific activities to the point where in the listings of US patents granted to foreign nationals, Korea appeared 7 th in 1995 (with 1161 patents), and Taiwan ranked 6 th (with 1620 patents). This should be compared with their positions in 1985, when Korea was 24 th with just 41 patents and Taiwan 16 th with 174 patents (USPTO 1996). In scientific activities, represented by the SCI (Science Citation Index) index of scientific papers, Korea ranked 23 rd in 1995 (with 5277 papers) compared with its position of 40 th (with 1178 papers) in 1987. In the same year Taiwan appeared 19 th (with 6550 papers) compared to 37 th (with 1510 papers) in 1987 (NSCa). This acceleration in the economic growth of both countries, and a significant level of " catching-up " in both technological and scientific activities, has stimulated many attempts to explain their success, and to draw implications for the prospects for other developing countries. Given the distinctive features of their industrial structure, several studies have focused on the impact of the different industrial structures on the strategies