Abstract

Despite the decade-long debate surrounding the role of markets and states in NICs'(newly industrialized countries) development, relatively litter attention has been paid to defining the meaning of the term "strategic industries" and systematically evaluating the strategic value of the industries selected for government support. This paper uses theories and techniques of social network analysis to define the strategic value of an industry in four different ways: better export performance, better ability to facilitate resource flows between upstream and downstream industries (brokerage), more upstream spillover effects (upstream prominence), and more downstream spillover effects (downstream prominence). South Korea's "Big Push" is used as a sample case of state support for empirical analysis, using Korea's input-output tables from 1980 to 1990, export performance and network variables representing across HCIs (Heavy and Chemical Industries) and non-HCIs. In terms of export performance, HCIs were not necessarily strategic in 1980 but are becoming so in 1990. In terms of brokerage and prominence, "Big Push" was generally successful in the sense that variables, on which HCIs have significantly higher scores than non-HCIs, are positively correlated with export. However, "Big Push" was not a complete success, for it did not take full advantage of potential opportunities. As the Korean economy enters the 1990s, "Big Push" is largely becoming less effective than it was in the 1980s. There are signs that the strategic value of HCIs is changing from important broker industries to important supplier industries. However, HCIs have failed to establish significant backward linkages in the domestic economy. At the theoretical level, this paper makes one of the few attempts to productively combine development study and network analysis to generate empirically meaningful results.