Globalisation Case Study: South Korea
by Dan Nguyen
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Globalisation, an important characteristic within the contemporary economic environment, has resulted in signiﬁcant changes to individual nations in terms of economic development strategies undertaken by national governments. The term globalisation refers to the integration of local and international economies into a globally uniﬁed political, economic and cultural order. Globalisation is not a singular phenomenon however, but a term to describe the forces that transform an economy into one characterised by the embracement of the freer movement of capital, labour, technology, and ﬁnancial ﬂows.
It is often difﬁcult to determine or categorise and economy as being globalised, yet there are several key indicators that suggest economic management decisions of an economy have in fact been undertaken as a result of globalisation. The main evidence that suggests the burgeoning existence of globalisation is resource use patterns, and the establishment of intergovernmental agreements, as well as transnational corporations. Globalisation has essentially been driven by the breaking of economic barriers between different nations over the last half-century. The global markets have experienced economic liberalisation, resulting from the global drive for the deregulation and micro-economic reform of national economies. These measures have translated into a reduction in the restriction on trade, capital ﬂows, and ﬁnancial investment. In addition, this economic liberalisation has in part been determined by the current state of technological advancement. As a result of this technology growth, transport costs have reduced dramatically, making trade more costefﬁcient. Communication costs have also reduced due to telecommunication advances, and also, international ﬁnance movements have been escalated due to the innovations such the Internet for e-commerce. Therefore there is an evident interactive relationship between economic liberalisation and technological advancement in the process of globalisation.
Since World War II, a number of East-Asian nations have experienced signiﬁcant economic growth, and the rapid nature of this growth rate has allowed them to be classiﬁed as 2 of 6
Newly Industrialised Countries (NICs). South Korea is a prime example, and major NIC, as since the 1960s, Korea has experienced per annum GDP growth of well over 9%. This exceptional performance is attributable mainly the high-quality labour supply and careful government planning, has resulted from the emergence of globalisation.
Gross world production, the total output by every nation, totals each individual nation’s GDP ﬁgures, and currently, South Korea is the 14th largest economy in the world, at almost US$600 billion, accounting for 1.6% of total world output, which highlights the phenomenal turn around for South Korea, from an underdeveloped third-world nation, to becoming a high-tech and rich manufacturing economy.
A key factor that has propelled South Korea’s growth has been its strong export emphasis since the 1960’s, where growth of exports climbed 21% annually. Emphasis has been placed upon the more skill-intensive, high-quality industries such as the motor vehicle industry and electronics manufactures. This has translated into South Korea presently having the sixth largest motor vehicle industry in the world, and is now also the fourth largest manufacturer of electronics goods.
Korea’s emphasis towards stronger education has directly contributed to its strong growth period by resulting in an extremely highly educated workforce. Currently, Koreas devotes 14% of GDP towards educating the young. Another key factor in Korea’s growth has been the rise of transnational business conglomerates or “Chaebol” in Korean. During 1998, the four largest Chaebol – LG, Daewoo, Samsung, and Hyundai – constituted a massive 60% of total...