Flying-Wild-Geese development with a scarcity of a learning effect and an insufficient industrial efficiency?

A few years ago, “Development Import Scheme” got popular between the Japanese distribution industry and the Korean HEEI. In the “Development Import Scheme”, the Japanese enterprises planned products aiming at the Japanese market and entrusted the Korean manufacturers for the implementation of the plan. Light household electronic products are a good example. Nowadays in Japan, it is no rare case that one family has several tape recorders, electric pressors or hair driers with different functions. There is some potentiality for the Korean products with their advantage of low costs and simpler functions to flow into the Japanese market. While the imported products got noticeable in the Japanese market after the Plaza Accord, they lost their growing pace soon and lately only a few trading companies continue to take the advantages.

Noticeable here is that such development imports has mainly been made by an initiative of the Japanese enterprises. Although we cannot deny the importance of quality improvement in hardware technologies, software technologies and marketing are also important for an effective deployment of sales because they maximize the current advantages of developing countries. It is a local entrepreneurs that play a leading role to enhance such software technologies and maximize the learning effect in the short period in the development process. This also applies to the ASEAN countries which receive a massive investment flow from Japan.

### 4. Some Concluding Remarks

In this paper, we analyzed economic development in East Asia under the Flying-Wild-Geese development hypotheses and reached a tentative conclusion that the learning effect and the industrial efficiency gained through the development process are highly significant in late-starting countries. In the fact-findings, we found that the Flying-Wild-Geese development pattern is being realized in the trade of the manufactured products of the HEEI between Japan, Korea and Thailand through the investment and trade among each other. The analysis of export specialization in the parts industry shows, however, that the Korean HEEI is encountering difficulties to follow the Flying-Wild-Geese pattern without enough learning effects and gaining industrial efficiency through the development process.

While the fact-findings show us the interdependency of the East Asian economies and their development pattern, more theoretical examination and positive analysis should be made to give a clearer understanding. As has been mentioned in the introduction, a quantitative analysis of the trade and investment flow is required to get a clear interpretation of the Flying-Wild-Geese development pattern. We focused on the analysis of supply-side, in this chapter, however, a demand-side approach such as the analysis of the U.S. market and the domestic markets of Korea and Thailand is indispensable to enhance the quality of study. In order to get a clear idea of complicated production network established by the Japanese HEEI enterprises in the NIEs and the ASEAN countries, even deeper analysis such as an interview of the enterprises is required. Finally, the role of macroeconomic policies should be analyzed to give a clear understanding of the whole process of economic development.

The economic development in East Asia has surely been promoted by the interactions