Learning-by-doing and knowledge spillovers: national system of innovation and the development of the Japanese and Korean DRAM industries

Summary form only given. The DRAM market the US created and dominated had been captured by Japanese firms by the mid-1980s. However, by the mid-1990s, Korean firms have taken more than 30% of world share, Japan less than 50% and the US only 15%. The competitive scene is still changing. Taiwanese and Chinese firms are poised to compete in the DRAM market. The catch-up observed in the DRAM industry does not follow the traditional model of innovation, channeling knowledge from R&D to production. Such catch-up strategies depend primarily on successful techniques for rapid learning, and have been demonstrated particularly clearly in the case of East Asian nations. A particular form of learning, learning-by-doing, is widely believed to play a key role in development of high-technology industries in those nations. However, the history of DRAM industry development in Japan and Korea suggests that the mechanisms by which learning takes place are not uniform across the countries involved in DRAM sectors. It is important to understand the differences in learning-by-doing capacity (LBDC) at the firm, agency, and national levels. This paper examines the example of LBDC development that has proven effective in the creation of the semiconductor industries in Japan and Korea. Both of these countries pursued catch-up strategies in the DRAM industry. The DRAM examples reinforce our understanding of differences in development patterns between Asian countries, especially Japan and the NICs, and Western developed world. Spillover effect of DRAM development may also be understood in the light of changes in LBDC