les Nouvelles - December 2013


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Samsung And LG: From Also-Rans To Dominance In Consumer Electronics

Robert A. Myers

Fairfield Resources International and Columbia U. Business School

Today Samsung is the world leader in flat screen TV and smart phone sales. LG is second in TV sales, fifth in cellphones. Samsung fabricated its first LCD screen in 1995, well after such screens already dominated laptop computers, and had shipped its first cell phone only in 1988. LG wasn't even founded until 1958 when it started its development of the first Korean-made radios. By 1982 it shipped its first color TV—made in the USA. In this time frame, not even twenty years ago, TV shipments were dominated by Japanese consumer manufacturers and cell phones were led by Motorola and Nokia. This paper explores possible sources of the secret to the Koreans' success and finds that the usual metrics—in particular patents, R&D investment, and low cost labor—don't explain it. We speculate that "industrial policy" measures of the South Korean government may have been decisive.

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