This thesis addresses the question: how and by what paths a developing economy like Korea can build an innovate and competitive capital goods sectors? To answer this question, understanding roles played by the user firms/sectors of capital goods seems to be of crucial important because of unveiling the nature of technological change in capital goods. It is due to the fact that capital goods embody to a great extent user-specific, peculiar, technological know-how and are generally process innovations developed by user firms. To understand roles of user firms/sectors specifically in the development of capital goods, this thesis deals with the case of machine tools. Because machine tools are the basic components of capital goods sector and are a leading transmitter of technological innovation throughout the economy.
The main research questions of this thesis are as follows:
i) Are there any roles of user firms for innovation through investment of machine tools?
ii) To what extent have user firms directly participated in the development of machine tools, if they have involved in the development of machine tools?
iii) How have user firms interacted with specialized producers when they have purchased machine tools?
iv) Why have user firms attempted a entrepreneurial entry into machine tools, if they did so?
v) What are the differences of user's roles in machine tools between Korea and Japan?
The research model on serval roles triggered by investment activities are identified based on the review of literature and of general investment pattern and practices in Korea.
The empirical findings from the Korean case are as follows.
First, based on the empirical investigation, four distinctive roles were identified such as (1) user as creative user, (2) user as information provider, (3) user as innovator and (4) user as supplier.
Second, a substantial proportion of machine tools innovation have been made by the user firms especially as a result of the technological entry(user as innovator). Users can become active entrepreneurs(user as supplier) when they attempt commercial entries in order to exploit their innovations. There have been continuous user entries into machine tools by car producers since the 1980s in the Korea.
Third, user firms have participated vigorously in the development process of specialized producers. Case analysis of the review of 902 projects at S company shows that user firms are ascribed to 55% of idea generation and 39% of problem solving.
Fourth, according to the Japanese, user-supplier linkage should be strong to make both the user sectors and the machine tools sector (supplier) to be internationally competitive. In the Korean case, however, the linkage seems to be weak or at formative stage compared to the Japanese case. The Japanese innovation patterns are moving from cooperative one to technological discontinuity pattern, but Korea follows adaptive innovation pattern.
To activate effective innovation of machine tools in the Korea, additional research are required on total systematic approach. Also the results of the thesis can not be necessarily generalized into other industrial sectors.
