Korean electronics firms have been aggressively involved in learning and knowledge
accumulation over the past two decades. Their consumer products, including color television
sets (CTVs), video cassette recorders (VCRs), and microwave ovens, were able to remain
competitive in the low-end segment of world markets until the late 1980s, generating the cash
flow needed to support development of more advanced technologies. In recent years, however,
Korean products are meeting increased competition.
Increased overseas production has been a major component of Korea's strategic response.
Korean production networks in Asia now extend beyond the ASEAN region to China and India.
The ratio of overseas production to total production has increased sharply in recent years, from
19 to 27% for CTVs and from 16 to 17% for VCRs during the period 1992-1994. However,
those of their Japanese electronics counterparts increased even faster, from 67% to 86% for
CTVs and from 36 to 71% for VCRs during the same period (see Table 1), keeping competition
intense in the cost-driven struggle for low-end markets.