Case Study: South Korea
- Countries that have undergone rapid and successful industrialisation since the 1960s. - Economic growth initially achieved through the development of manufacturing industry and exportation of cheap consumer goods. The Asian Tigers benefitted from a large, flexible and very cheap labour supply and each country developed low skilled and labour-intensive industries. - The emergence of NICs has been a key element in the process of globalisation.
Asian NICs 3 generations
Filter down concept of industrial location
- In Asia 3 generations of NIC can be recognised in terms of the timing of industrial development and their current economic characteristics. - Nowhere else in the world is the filter-down concept of industrial location better illustrated
Positive Consequences of economic growth
TNCs have brought in valuable foreign currency which has been used to increase domestic production, reduce imports and fund infrastructure and social development Old and new technologies have been introduced and this has allowed the development of Asian TNCs in these fields With increased prosperity Asian NICs rapidly improved their essential infrastructure such as roads and airports and then set about improving the quality of basic life.
Case study: South Korea
South Korea has grown rich in a short time:
- After the Korean War of 1950-3 the South had a GDP per head the same as much of Sub Saharan Africa. It is now the 14th richest country in the world. - From the early 1960s the economy took off achieving amazing rates of growth for 40 years. - Wages rose steadily and all aspects of the quality of life improved. e.g. life expectancy increased from 47 years in 1955 to 75 in 2002.
Reasons for South Korea’s success
- Government influence
• State-directed bank loans at negative real rates of interest • Held the growth of wages well below that...