Mr. Bin Kim Young on The Development models of four Asian Tigers

My MBA colleague Mr. Bin Kim Young comments on the Asian business models:

“Four Asian Tigers” or “Asian Four Little Dragons” means the newly developed Asian economies of Hong Kong, South Korea, Singapore, and Taiwan. These countries had become famous for their high economic growth and rapid industrialization between the early 1960s and 1990s. The growth rate of real gross domestic product per capita from 1960 to 1995 was around 6% per year. Even though attention has increasingly shifted to other faster growing economies, such as China, Indian, and Vietnam, all of these tigers have successfully transformed into high-income economies. All four Asian Tigers have a highly educated workforce and good infrastructures, but have specialized in areas where they have a competitive advantage. In other words, each of them has a different model.

For example, the economy of South Korea relies heavily on exports from a few conglomerates and it is among the world's top exporters. It is home of well known global conglomerates such as Samsung, Hyundai-Kia, and LG. The Hyundai-Kia Automotive Group is Asia's second largest car company and one of the top five automakers in the world. Samsung is world second largest cell phone maker. And South Korea makes half of heavy ships in a world.

On the other hand, small and medium-sized businesses make up a large proportion of businesses in Taiwan. Most of the development was thanks to the flexibility of familiar companies which is relatively small, but produced for foreign partners like IBM, DEC, and HP. But the importance of the State must not be forgotten. It was the central government which coordinated the industrialization process, created the infrastructures, decided the strategic priorities and, when necessary, recurred to impose its conditions.

Hong Kong is the gateway of Mainland China, thanks to favorable geographical position and trading opportunities to and from China. Under British administration, it soon became a thriving legitimate international port. By the late 20th century, Hong Kong had become the seventh largest port in the world and second only to New York and Rotterdam in terms of container throughput. The Kwai Chung container complex is the largest in Asia. Moreover, Hong Kong shipping owners are second only to those of Greece in terms of total tonnage holdings.

The economy of Singapore is a highly developed state-driven capitalism. Although the government intervention in the market is kept at a minimum, the state controls and owns firms that comprise at least 60% of the GDP through government-related companies, such as Temasek, and GIC. It has a business-friendly environment, relatively corruption-free government, and stable inflation. Exports from multinational companies provide the main source of revenue for the economy. Thus Singapore could be an extended concept of entrepot, which is a trading post where merchandise can be imported and exported without import duties.