Technology strategy of a technology follower and its competitiveness in a high-technology industry: An analysis of the Korean semiconductor industry case

A technology innovation can bring about changes in competitive structure in the marketplace and threaten the very existence of existing technology and established firms. But many studies in economics and management science proceed as if there is no difference in technological approaches, and thus, there is no difference in technological responses among competing economic entities. Yet, several studies on technology and innovation have shown such was not the case. For competing entities (firms and nations) to maintain strong competitiveness, they need to ask whether they are "doing the right thing right." New challenges are continually created by emerging new technologies and continuing technology evolution. Each economic entity does not face the same level or degree of external challenges because each has different sets of internal capabilities and experiences; thus, an appropriate technology strategy for each entity is different. Moreover, an appropriate technology strategy for each entity may change over time, so that what was right today may not be right tomorrow.; The semiconductor industry offers several contrasting technology strategy models. While the U.S. model emphasizes the military significance of semiconductors, the Japanese, European, and Korean models emphasize the commercial significance. The difference between the military and commercial orientations results in differing technology strategies. In recent years, Japan has either overtaken the leadership or closed the technological gap with the United States in many semiconductor segments. Both the Europeans and Koreans possess many of the same characteristics as the Japanese. Despite these similarities, the European model exemplifies an unsuccessful strategy since the European industry is now a technology follower in many mainstream semi-conductor segments and has only a small role in semiconductor technology evolution. The Korean model is viewed as a copy of the Japanese model. But like the Europeans, the Koreans face mounting challenges.; Although the Korean model appears to be a smaller version of the Japanese model on the surface, these two models are very different at the core. Whereas the Japanese model is relatively more adaptable to the changing technology evolution, the Korean model is entrenched in the present. Technology strategy of a follower like Korea should not only fit its current resources and current environment, but should fully address the fundamental problem of creating the resources necessary for the future. Against new challenges in the comning future, the present Korean model may not be appropriate for improving its competitiveness.