1. Introduction
Korea has been transformed from a closed, low-income agricultural economy in
the 1960s to a high-income open diversified, and growing economy. Korea is no
longer poor or closed economically. The Korean economy is linked to the world
economy which is rapidly progressing skills- and knowledge-based technological
change. Korean society has become freer and more democratic.
Korea used to be a small poor closed agriculture-based economy. Per capita GDP
value was only $121 by 1962. In 2007 it had reached $20,220 per person. Thus it
has experienced miraculous growth over a short four decades. This paper attempts
to describe how Korea shifted from its poor agricultural base to the advanced
industrial economy, followed by the presentation of per capita GDP, production and
employment structure, education, and total factor productivity growth. We ask what
factors lay behind Korea’s economic success. In addition, this paper addresses the
appropriate economic policy for Korea in a high-tech skill world and the likely
challenges that Korea will need to confront in the 21st century.