How might we best account for the economic success of the countries of East Asia in the period 1945 to 1980?
The countries in the East Asia experienced economic success from the year 1945 to the year 1980. Some countries in the East Asia like Japan and Korea are said to have gone through industrial transformation following technological advancements. These countries came up with production mechanisms that made them competitive during these period globally. For instance, Japan and Korea are said to become very innovative due to the increased use of technology in production making them very competitive globally. There was increased industrialization in East Asia that led to economic development. Between the year 1960 and the year 1980, the process of industrialization had grown by around 6.3% leading to increased country output. The exports in these countries increased leading to improvement in the balance of payments as the countries in East Asia were now exporting more than they were importing due to the increased industrialization. The increased industrialization in the countries in East Asia led to production of more than they could consume locally leading to the surplus that was then exported.
Factors that is accountable for success of East Asia countries
Various factors can be attributed to the economic success of the nations in East Asia between the year 1945 and the year 1980. Some of these countries worked towards ensuring that the exporting policies could assist in increasing the volume of exports. For instance, Philippines ensured that the exporting policies were promoted aiming at increasing the volume of exports. However, the economy of Philippines is said to have undergone stagnation despite the increase in output between the years 1973 to 1980 as the ratio of the exports manufactured. The manufactured value-added had doubled.as a result, the key factor that led to the economic success of the countries in East Asia can be attributed factors that are beyond the exporting factors to the increased exporting activity. Instead, the economic success of these countries can be attributed to comparative advantages and specialization. For instance, the countries were able to produce their products at relatively low costs as compared to other countries. The manufacturing costs were reduced due to the increased efficiency in these countries leading to increasing the returns of exported products. For instance, the countries have skilled labor forces that played a key role in improving the manufacturing process.
The increased use of technology in the countries in the East Asia can be attributed to the increase in the economic success. These countries increased the use of technology in the manufacturing process where they automated most of their manufacturing process leading to increasing efficiency. The manufacturing process realized a decrease in costs reduction, as the industries in these countries were increasingly becoming efficient making them able to offer competitive prices of their products in the international markets. Besides, technological advancements led to a reduction in the labor costs as the use of machines in the production process resulted in a reduction in the number of employees working in manufacturing plants. Countries like Hong Kong, South Korea, Singapore, and Taiwan made a great make great progress in the use of technology.
The technological development in Asia is among the economic events that followed after the Second World War. The easy Asian Tigers were developing their innovation systems that were very distinct. The innovation systems played a crucial role in the industrial revolution leading to increased economic output in the countries. The technological advancements led to improvement in the quality of the products of the countries making them very competitive in the international market. For instance, Singapore becomes the best manufacturer of the complex consumer and professional electronics. The systems and electronic good produced by the Tigers became very sophisticated making as they embraced the technological advancement that was present then hence able to meet the needs of the consumers in the international market better.
There was an increase in industrialization in the countries in the East Asia, especially after the second world. The potential models that can be used to explain the increased industrialization in the countries in East Asia include institutional and market-oriented models. Considering the market-oriented model of industrialization, achieving competitive prices and the strategy of specialization are crucial. The competitive prices can be achieved through proper management of the manufacturing costs that can be achieved through following comparative advantages of the countries. Comparative advantages entail a country specializing in the area of production that it can be able to offer products to the market using minimal costs. This involves the consideration of the factors of products, as they are key in the price theory. According to price theory, the costs of production do affect the prices of the products in the market. As a result, the countries in East Asia concentrated in manufacturing products that they can manufacture cheaply leading to specialization. The institutional model of industrialization entails coming up with institutions that do support industrialization. For instance, many countries in East Asia like Japan ensured that the learning institutions taught skills that could assist in increasing industrialization.
The increased industries can be attributed to the efforts of the governments of these countries to ensure that they achieve economic development. Some countries like Korea proved to be very competitive as the output for electronics improved leading to increased electronic exports. However, the economic success of these countries especially due to the industrialization can be attributed to their collaboration and alliances. For instance, the electronic manufacturing in South Korea was done under the license of Japanese electronics companies.
The countries in the East Asia were united to achieve economic success as they shared resources and technology aiming at achieving increased industrialization. As a result, after the second war, most of the countries in East Asia achieved sustainability in economic growth and industrialization. Many of these countries went through a Great transformation to achieve industrialization. For instance, in early 1960 Korea was among the poorest states where its per capita was approximate $80. The government of Korea came up with policies that enhanced its rate of industrialization making Korea achieve a phenomenal growth rate by 1980.