East Asian Economic Models for Chile

Abstract

East Asia's economy grew rapidly from the 1970s through 2000s: Its population now constitutes about 50% of the world's population and its economic output, 45% of the GDP. In recent years, East Asia has become an important place for the Chilean economy, because it also constitutes the most dynamic market for Chilean exports, with reported annual growth rates of over 200%. This paper examines the Chilean economy and its enterprises with respect to those of the East Asian economic models of Keiretsu (Japan), Commonwealth (China), and Chaebol (South Korea), using a case study approach to understand the ways in which these East Asian economic models have affected economic performance and development. Our analysis shows that job specifications in East Asian structure are less detailed and not strictly tied to individual tasks, and that formal rules and procedures tend to be interpreted rather flexibly, which is similar to Chilean structures. This similarity could allow Chile to better understand Asia's success and to achieve a higher level of performance in its own operations. Economic groups and medium Chilean enterprises could learn from the ways in which Keiretsu, Commonwealth, and Chaebol expand into the global market, using different sources of competitive advantage, achieving higher efficiency and risk management, and developing more innovations.