ABSTRACT
A strategic industrial policy, contributing to technological strength, has been the foundation for expanding industrial capacity in Japan and Korea. By maintaining an investment momentum the state ensured best-practice standards and enhanced the long-term competitiveness of the steel industry. New innovations were rapidly adopted and the state worked with the private sector in industrial transformation. The autonomy of the state was critical for securing modern technology and sustaining the high rate of capacity expansion. The late industrialization of Japan and Korea has been based on institutional arrangements that have been conducive to successful technological borrowing.
