ABSTRACT
The South Korean state now faces the challenge of both sunrise and sunset industries, development and decline, growth and adjustment. Despite exporting close to 18.4 billion dollars of textiles in 1996,2 profits have fallen due to higher labor costs, growing competition in their former niche market of the lower value-added products of yarn and fabric, and aging technology. Spinning mills have slashed their workforce in half since 1990, shed 80 per cent of their looms and 30 per cent of the spindles, leaving 29,000 workers to operate a total of 4,500 looms and 2.5 million spindles in 1995.3 A long production stream for export includes upstream spinners and synthetic fiber producers, midstream weavers and dyers, and downstream assemblers in the garment industry. Larger and smaller firms have had to choose among difficult alternatives of product specialization and upgrading, offshore production, or diversification out of the textile industry. The state fostered the industry from the mid-1960s as its leading exporter, ignored it in the mid-1970s in favor of heavy and chemical industry, and tried to rescue the industry from the 1980s with the Industrial Development Law of 1985.
