Paths to Participation in ‘Hi-Tech’ Industry: A Comparative Analysis of Computers in Brazil and Korea

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ASIAN PERSPECTIVE, Vol. 13, No. 1, Spring-Summer 1989, pp. 5-35 PATHS TO PARTICIPATION IN HI-TECH' INDUSTRY: A COMPARATIVE ANALYSIS OF COMPUTERS IN BRAZIL AND KOREA Peter B. Evans and Paulo Bastos Tigre * In the late seventies and early eighties, the advent of a new generation of computers, based on a standard set of silicon micro-processors, transformed the organization of the com­ puter industry. In the U.S., new companies gained a foothold in the personal computer market by competing successfully with IBM. Even more interesting from the point of view of those in­ terested in industrialization, was the spread of computer pro­ duction capacity to the Newly Industrialized Countries (NICs). Brazil and Korea were among the most successful of these. Since their success was based on very different models of state policy, industrial organization, and economic strategy, comparing the paths they chose should not only help us to understand these two countries but also the problems confronting other devel- *The research on which this paper is based was funded by a grant from the Tinter Foundation. The ideas and interpretations offered here are the author's alone and should in no way be taken to reflect the opinions of the foundation. A research grant from the Pacific Rim Program of the University of California provided support for the field work in Korea. Without local institutional support from the Institute for Far Eastern Studies of Kyungnam University, especially from the Institute's research director Lee Su Hoon, and without the aid of Prof. Kim Kwang Woong of Seoul National University, the research would not have been possible. Support from the Latin American Institute of the University of New Mexico was crucial to both research and writing. Research in Korea and analysis of the Korean data depended on the assistance of Lew Seok Jin, Kim Mi Kyoung and Kang Mungu. We are also grateful to numerous colleagues in Brazil, Korea and the United States and to executives in the private and public sectors in both Brazil and Korea who spent valuable time sharing their insights. A revision of the manuscript was made possible by a Guggenheim Fellowship and by a fellowship from the Center for Advanced Study in the Behavioral Sciences supported by a NSF Grant #BNS8700864. 6 Peter B. Evans and Paulo Bastos Tigre oping countries interested in participating in high-tech industry as well as the options open to them. Comparisons of the Korean and Brazilian computer in­ dustries, like comparisons of Asian and Latin American models of development in general, too often tend to be content with contrasting Asian export success and current openness to im­ ports and investment with Latin America's relatively closed, domestically-oriented industry (Cline, 1987). This stereotypical portrayal captures only one dimension of the differences be­ tween the two industries, and that dimension only partially. A more adequate comparison must involve a discussion of orientations toward internal and external markets in the context of an overall description of production, sales and installed base of computers. It must link this discussion with an historical understanding of the evolution of industrial organization. This requires a description of the major firms, including their current computer sales, involvements in other industries and histories, including their installed base. A range of state policies must be considered as well. The structure of both industries is the result of "state intervention." While they have used different tactics and different instruments, state policy makers in each country have been deeply involved in the development of the two industries. This paper is a preliminary attempt to present an integrated analysis of economic strategy, industrial organization, and state policy in the Brazilian and Korean computer industries. It offers a snapshot of the two industries as they appeared in the mid­ eighties and should therefore be useful as a base from which to assess the industry's evolution in the latter half of the eighties. While we don't claim to be able to predict the future of these industries, we do feel that careful analysis of their position in the mid-eighties should help to assess the opportunities and pit­ falls that each industry must face and to provide some...

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