The Basis for South Korea's Ascent in the Shipbuilding Industry, 1970–1990

Abstract

The last 50 years have seen a dramatic shift in the hegemony of the shipbuilding industry. Today more than 90 per cent of the world's newbuilding orders have been placed at yards in South Korea, China and Japan. South Korea emerged as a major shipbuilding nation in the period from 1970 to the late 1980s, when world shipping was in crisis. The aim of this paper is to explain how the country managed to gain this position. After a presentation of world shipbuilding in general, and South Korean shipbuilding in particular, the paper analyses domestic and international factors that can explain South Korea's growing market share. At the domestic level, we consider the interplay between the country's comparative advantages, technological learning and a conscious industrial policy aimed at escalating shipbuilding capacity. At the international level, we suggest that the severe crisis in shipping and shipbuilding might in fact have been beneficial for South Korea's ability to grab market shares.