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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 27, No. 1, pp.41-65
ISSN: 1225-0279 (Print)
Print publication date 28 Feb 2014
Received 06 Jan 2014 Revised 23 Jan 2014 Accepted 24 Jan 2014

The State, Systems of Innovation and Economic Growth: Comparative Perspectives from India and South Korea

Lakhwinder Singh ; Kesar Singh Bhangoo
Professor, Department of Economics and Coordinator, Centre for Development Economics and Innovation Studies (CDEIS), Punjabi University, Patiala 147002, India, Tel: +91-98-8875-5642, Fax: +91-17-5228-3073 lakhwindergill@pbi.ac.in
Professor, Centre for Research in Economic Change, Punjabi University, Patiala-147002, India, Tel: +91-98-1542-7127, Fax: +91-17-5228-3073 kesarbhangoo@pbi.ac.in

JEL Classification: O43, O53, O57, O31, O38, P19

Abstract

Why long run growth rate differs across countries and over time remained unresolved question in development economics. In this paper an attempt has been made to examine the economic growth performance of India and South Korea to throw light on the above stated issue. National and sectoral growth rates of India and South Korea covering the period 1961-2011 have shown a dramatic differential in economic growth performance and concomitant structural change. The engine of growth in the South Korean economy during the fast phase of economic development has remained the manufacturing sector and followed standard patterns of economic growth as observed by the industrially advanced countries. In the case of India, despite massive efforts to industrialize and capacity building for establishing manufacturing base, the engine of growth has remained the service sector. The factors that contributed to the observed pattern of economic development in both the countries were national innovation system and nature and character of the state intervention. The analysis of sustainability and disruption of economic growth momentum in both the countries, India and South Korea, gives credence to the view that a wider approach to national systems of innovation that encompasses judicious combination of the state and the market is more suitable in understanding the long run growth differentials.

Keywords:

Long run economic growth, National systems of innovation, Structural change, Public policy, India, South Korea, State

Acknowledgments

This is the revised version of the paper which was presented in the 21st SJE-KERI International Symposium on “Understanding Economic Growth in India: Implications for India-Korea Cooperation,” September 3, 2013, Seoul National University, Seoul. The authors are grateful to two anonymous referees of the journal for their insightful suggestions and Professors Donghyu Yang, Keun Lee, Dae Woo Lee and several participants in the Symposium for their helpful comments and suggestions. However, the usual disclaimer applies

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