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International Transfer of Tacit Knowledge: The Transmission of Shipbuilding Skills from Scotland to South Korea in the Early 1970s

Published online by Cambridge University Press:  17 March 2020

STIG TENOLD ,
J. Y. KANG ,
SONG KIM  and
HUGH MURPHY
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Abstract

This article analyzes the transfer of tacit knowledge between countries and continents, based on a case from the shipbuilding industry. The South Korean shipbuilder Hyundai Heavy Industries (HHI) was established in the early 1970s and had by the late 1980s become the world’s leading shipbuilder. Aided by foreign loan capital, HHI acquired technology through foreign licenses and imported equipment. However, shipbuilding is about more than hardware. This article presents and analyzes another important means of knowledge transfer: the acquisition of tacit knowledge in the form of shipbuilding skills, including shipyard processes and operations. This transfer was mainly accomplished through the “import” of foreign managers and the dispatch abroad of South Korean employees. One important element, which we investigate in detail, was the Korean personnel that HHI sent in 1972 to the Scott Lithgow shipyards in Scotland to observe and learn. Based on archival sources and interviews, we detail the manner in which tacit knowledge could be transferred across language and cultural barriers.

Type
Article
Information
Enterprise & Society , Volume 22 , Issue 2 , June 2021 , pp. 335 - 367
Copyright
© The Author(s), 2020. Published by Cambridge University Press on behalf of the Business History Conference. All rights reserved.

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Footnotes

The authors would like to thank the editor of Enterprise and Society as well as two anonymous referees for very useful comments on an earlier version of the article. The research for this article was supported financially by the Insitute for Asan Studies, University of Ulsan, South Korea.

References

Bibliography of Works Cited

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Johnman, Lewis, and Murphy, Hugh. Scott Lithgow: Déjà vu All Over Again! The Rise and Fall of a Shipbuilding Company. St. John’s: IMEHA [Liverpool University Press], 2005.Google Scholar
Jonsson, Gabriel. Shipbuilding in South Korea: A Comparative Study. Stockholm: East Asian Institute, 1995.Google Scholar
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McCormick, Kevin. Engineers in Japan and Britain: Education, Training and Employment. Routledge Japanese Studies. London, Nissan Institute, 1999.Google Scholar
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Choi, Young-Jin, and Glassman, Jim. “A Geopolitical Economy of Heavy Industrialization and Second Tier City Growth in South Korea: Evidence from the ‘Four Core Plants Plan.’” Critical Sociology, 44, no. 3 (2018): 405–420.CrossRefGoogle Scholar
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Golant, Benjamin D. “The State, Culture and Organizational Learning in South Korea: The Comparative Case of South Korea and India.” Cambridge Review of International Affairs, 11, no. 2 (1998): 238–257.CrossRefGoogle Scholar
Hagemeister, Marcus. “The Four Largest South Korean Business Groups and Foreign Technology: Acquisition of Technology and Foreign Direct Investment.” Prometheus: Critical Studies in Innovation, 17, no. 1 (1999): 59–75.CrossRefGoogle Scholar
Hassink, Robert, and Shin, Dong Ho. “South Korea’s Shipbuilding Industry: From a couple of Cathedrals in the Desert to an Innovative Cluster.” Asian Journal of Technology Innovation, 13 (2005): 133–155.CrossRefGoogle Scholar
Hassink, Robert, and Shin, Dong Ho. “Cluster Life Cycles: The Case of the Shipbuilding Industry Cluster in South Korea.” Regional Studies, 45, no. 10 (2011): 1387–1402.Google Scholar
Johnson, Björn, Lorenz, Edward, and Lundvall, Bengt-Åke. “Why All This Fuss About Codified and Tacit Knowledge?” Industrial and Corporate Change, 11, no. 2 (2002): 245–262.CrossRefGoogle Scholar
Johnston, Ian, and Murphy, Hugh. “The Newshot Isle Project.” Scottish Geographical Journal, 117, no. 3 (2001): 207–218.Google Scholar
Kang, J. Y., Kim, Song, Murphy, Hugh, and Tenold, Stig. “Old Methods Versus New: A Comparison of Very Large Crude Carrier Shipbuilding at Scott Lithgow and Hyundai Heavy Industries, 1970–1977.” Mariner’s Mirror, 101, no. 4 (2015): 426–457.CrossRefGoogle Scholar
Kim, Linsu. “The Dynamics of Technological Learning in Industrialisation.” International Social Science Journal, 53, no. 168 (2001): 297–308.CrossRefGoogle Scholar
Lee, Changsoon. “Technological Dependence in a Developing Country: The Case of South Korea.” Unpublished PhD thesis, University of Chicago, Chicago, IL, 1985.Google Scholar
Lim, Jungkeun. “Urbanization, Production System, and the Labour Movement in South Korea.” Unpublished PhD thesis, Michigan State University, Ann Arbor, 1997.Google Scholar
McGaughey, Sara L., Liesch, Peter W., and Poulson, Duncan. “An Unconventional Approach to Intellectual Property Protection: The Case of an Australian Firm Transferring Shipbuilding Technologies to China.” Journal of World Business, 35, no. 1 (2000): 1–20.Google Scholar
McWiggins, Dan Patrick. (2013) “Sunrise in the East, Sunset in the West: How the Korean and British Shipbuilding Industries Changed Places.” Unpublished PhD thesis, University of Texas at Austin, Austin.Google Scholar
Minns, John. “The Labour Movement in South Korea.” Labour History, 81 (November 2001): 175–195.CrossRefGoogle Scholar
Murphy, Hugh. “China, Philippines, Singapore, Taiwan and Vietnam.” In Shipbuilding and Ship Repair Workers Around the World: Case Studies 1950–2010, edited by Varela, R. Murphy, H., and Linden, M. Van der, 637–656. Amsterdam: Amsterdam University Press/ Chicago University Press, 2017.Google Scholar
Wonchol, O. “Construction of the Shipbuilding Industry: A Model for Korean Industrialization.” Reference Paper—The Knowledge Partnership Project. Seoul: Korea Development Institute, 2002.Google Scholar
Rapping, Leonard. “Learning and World War II Production Functions.” Review of Economics and Statistics, 47 (1965): 81–86.CrossRefGoogle Scholar
Rørvik, Kjell Arne. “Knowledge Transfer as Translation: Review and Elements of an Instrumental Theory.” International Journal of Management Reviews, 18 (2016): 290–310.CrossRefGoogle Scholar
Sohn, Eunhee, Chang, Sung Yong, and Song, Jaeyong. “Technological Catching-Up and Latecomer Strategy: A Case Study of the Asian Shipbuilding Industry.” Seoul Journal of Business, 15, no. 2 (2009): 25–57.Google Scholar
Solli-Sæther, Hans, and Karlsen, Jan Terje. “Knowledge Transfer in Shipbuilding Projects: A Study of Facilitating Mechanisms.” International Journal of Project Organisation and Management, 4, no. 3 (2012): 256–271.CrossRefGoogle Scholar
Shin, Kyoung-ho, and Ciccantell, Paul S.. “The Steel and Shipbuilding Industries of South Korea: Rising East Asia and Globalization.” Journal of World Systems Research, 15, no. 2 (2009): 167–192.CrossRefGoogle Scholar
Song, Sungsoo. “Growth and Technological Development of the Korean Shipbuilding Industry.” STI Policy Review, 2, no. 4 (2011): 55–63.Google Scholar
Tenold, Stig. “The Declining Role of Western Europe in Shipping and Shipbuilding.” In Shipping and Globalization in the Postwar Era—Contexts, Companies, Connections, edited by Petersson, Niels P. Tenold, Stig, and White, Nicholas J. 9–36. Cham: Palgrave MacMillan, 2019.CrossRefGoogle Scholar
Todd, Daniel. “Going East: Was the Shift in Volume Shipbuilding Capacity from Britain and Continental Europe to the Far East and Elsewhere During the Latter Half of the Twentieth Century Inevitable?” Mariner’s Mirror, 97, no. 1 (2011): 259–271.CrossRefGoogle Scholar
Wright, Christopher, and Kwon, Seung-Hu. “Business Crisis and Management Fashion: Korean Companies, Restructuring and Consulting Advice.” Asia-Pacific Business Review, 12, no. 3 (2007): 355–373.Google Scholar
Yülek, Murat A. “On the Middle-Income Trap, the Industrialization Process and Appropriate Industrial Policy.” Journal of International Competition and Trade, 17, no. 3 (2017): 325–348.CrossRefGoogle Scholar
University of Glasgow, Business Archive Centre (UGBAC)Google Scholar
Amsden, Alice D. Asia’s Next Giant: South Korea and Late Industrialization. Oxford: Oxford University Press, 1989.Google Scholar
Chida, Tomohei, and Davies, Peter N.. The Japanese Shipping and Shipbuilding Industries: A History of their Modern Growth. London: Athlone, 1990.Google Scholar
Fukasaku, Yukiko. Technology and Industrial Development in Pre-war Japan: The Mitsubishi-Nagasaki Shipyard 1884–1934. London: Routledge, 1992.Google Scholar
Hwang, Sung Hyuk. Let There Be a Yard: Memories of a Shipbroker. 2nd ed. Seoul, Korea: E&B Plus, 1998.Google Scholar
Johnman, Lewis, and Murphy, Hugh. Scott Lithgow: Déjà vu All Over Again! The Rise and Fall of a Shipbuilding Company. St. John’s: IMEHA [Liverpool University Press], 2005.Google Scholar
Jonsson, Gabriel. Shipbuilding in South Korea: A Comparative Study. Stockholm: East Asian Institute, 1995.Google Scholar
Kim, Linsu. Imitation to Innovation: The Dynamics of Korea’s Technological Learning. Cambridge, MA: Harvard Business School Press, 1997.Google Scholar
Kirk, Donald. Korean Dynasty: Hyundai and Chung Ju Yung. New York: Routledge, 1994.Google Scholar
Krishnan, Navaneetha. Prosperous Nation Building Through Shipbuilding. New Delhi: National Maritime Foundation, 2013.Google Scholar
McCormick, Kevin. Engineers in Japan and Britain: Education, Training and Employment. Routledge Japanese Studies. London, Nissan Institute, 1999.Google Scholar
Nam, Hwasook. Building Ships, Building a Nation: Korea’s Democratic Unionism Under Park Chung Hee. Seattle: University of Washington Press, 2009.Google Scholar
Polanyi, Michael. Personal Knowledge: Towards a Post-critical Philosophy. Chicago: University of Chicago Press, 1962.Google Scholar
Polanyi, Michael. The Tacit Dimension. London: Routledge & Kegan Paul, 1966.Google Scholar
Steers, Richard M. Made in Korea. Chung Ju Yung and the Rise of Hyundai. London: Routledge, 1999.Google Scholar
Tenold, Stig. Tankers in Trouble: Norwegian Shipowners and the Crisis of the 1970s and 1980s. St. John’s: IMEHA [Liverpool University Press], 2006.Google Scholar
Todd, Daniel. Industrial Dislocation: The Case of Global Shipbuilding. London: Routledge, 1991.Google Scholar
, World Bank, . The East Asian Miracle Economic Growth and Public Policy. Washington, DC: World Bank, 1993.Google Scholar
Woronoff, Jon. Asia’s Miracle Economies. 2nd ed. New York: M.E. Sharpe, 1992.Google Scholar
Arima, Seiho. “The Western Influence on Japanese Military Science, Shipbuilding, and Navigation.” Monumenta Nipponica 19, no. 3/4 (1964): 118–145.Google Scholar
Bae, Suk-Man. “A Study of Technology Transfer and Its Trajectory in the Initial Phase of the HHI.” [In Korean.] Review of Business History, 26, no. 3 (2011): 181–214.Google Scholar
Bae, Yong-Ho. “Shipbuilding Technology Development in Hyundai Heavy Industries Co., Ltd. (HHI).” In Case Study on Technological Innovation of Korean Firms, edited by Bae, Yong-Ho Song, Sungsoo Um, Mi-Jung Lee, Dae-Hee, and Hobday, Michael 132–155. Seoul: Science & Technology Policy Institute, 2002.Google Scholar
Bruno, Lars C., and Tenold, Stig. “The Basis for South Korea’s Growth in the Shipbuilding Industry, 1970–1990.” Mariner’s Mirror, 97, no. 3, (2011): 201–217.CrossRefGoogle Scholar
Buxton, Ian, Fenton, Roy, and Murphy, Hugh. “Measuring Britain’s Shipbuilding Output in the Twentieth Century.” Mariner’s Mirror, 101, no. 3 (2015): 304–322.CrossRefGoogle Scholar
Choi, Young-Jin, and Glassman, Jim. “A Geopolitical Economy of Heavy Industrialization and Second Tier City Growth in South Korea: Evidence from the ‘Four Core Plants Plan.’” Critical Sociology, 44, no. 3 (2018): 405–420.CrossRefGoogle Scholar
Cowan, Robin, David, Paul A., and Foray, Dominique. “The Explicit Economics of Knowledge Codification and Tacitness.” Industrial and Corporate Change, 9, no. 2 (2000): 211–253.CrossRefGoogle Scholar
Craggs, John, Murphy, Hugh, and Vaughan, Roger. “A Shipbuilding Consultancy Is Born: The Birth, Growth and Subsequent Takeovers of A&P Appledore (International) and the A&P Group, 1971–2017.” International Journal of Maritime History, 30, no. 1 (2018): 106–130.CrossRefGoogle Scholar
Golant, Benjamin D. “The State, Culture and Organizational Learning in South Korea: The Comparative Case of South Korea and India.” Cambridge Review of International Affairs, 11, no. 2 (1998): 238–257.CrossRefGoogle Scholar
Hagemeister, Marcus. “The Four Largest South Korean Business Groups and Foreign Technology: Acquisition of Technology and Foreign Direct Investment.” Prometheus: Critical Studies in Innovation, 17, no. 1 (1999): 59–75.CrossRefGoogle Scholar
Hassink, Robert, and Shin, Dong Ho. “South Korea’s Shipbuilding Industry: From a couple of Cathedrals in the Desert to an Innovative Cluster.” Asian Journal of Technology Innovation, 13 (2005): 133–155.CrossRefGoogle Scholar
Hassink, Robert, and Shin, Dong Ho. “Cluster Life Cycles: The Case of the Shipbuilding Industry Cluster in South Korea.” Regional Studies, 45, no. 10 (2011): 1387–1402.Google Scholar
Johnson, Björn, Lorenz, Edward, and Lundvall, Bengt-Åke. “Why All This Fuss About Codified and Tacit Knowledge?” Industrial and Corporate Change, 11, no. 2 (2002): 245–262.CrossRefGoogle Scholar
Johnston, Ian, and Murphy, Hugh. “The Newshot Isle Project.” Scottish Geographical Journal, 117, no. 3 (2001): 207–218.Google Scholar
Kang, J. Y., Kim, Song, Murphy, Hugh, and Tenold, Stig. “Old Methods Versus New: A Comparison of Very Large Crude Carrier Shipbuilding at Scott Lithgow and Hyundai Heavy Industries, 1970–1977.” Mariner’s Mirror, 101, no. 4 (2015): 426–457.CrossRefGoogle Scholar
Kim, Linsu. “The Dynamics of Technological Learning in Industrialisation.” International Social Science Journal, 53, no. 168 (2001): 297–308.CrossRefGoogle Scholar
Lee, Changsoon. “Technological Dependence in a Developing Country: The Case of South Korea.” Unpublished PhD thesis, University of Chicago, Chicago, IL, 1985.Google Scholar
Lim, Jungkeun. “Urbanization, Production System, and the Labour Movement in South Korea.” Unpublished PhD thesis, Michigan State University, Ann Arbor, 1997.Google Scholar
McGaughey, Sara L., Liesch, Peter W., and Poulson, Duncan. “An Unconventional Approach to Intellectual Property Protection: The Case of an Australian Firm Transferring Shipbuilding Technologies to China.” Journal of World Business, 35, no. 1 (2000): 1–20.Google Scholar
McWiggins, Dan Patrick. (2013) “Sunrise in the East, Sunset in the West: How the Korean and British Shipbuilding Industries Changed Places.” Unpublished PhD thesis, University of Texas at Austin, Austin.Google Scholar
Minns, John. “The Labour Movement in South Korea.” Labour History, 81 (November 2001): 175–195.CrossRefGoogle Scholar
Murphy, Hugh. “China, Philippines, Singapore, Taiwan and Vietnam.” In Shipbuilding and Ship Repair Workers Around the World: Case Studies 1950–2010, edited by Varela, R. Murphy, H., and Linden, M. Van der, 637–656. Amsterdam: Amsterdam University Press/ Chicago University Press, 2017.Google Scholar
Wonchol, O. “Construction of the Shipbuilding Industry: A Model for Korean Industrialization.” Reference Paper—The Knowledge Partnership Project. Seoul: Korea Development Institute, 2002.Google Scholar
Rapping, Leonard. “Learning and World War II Production Functions.” Review of Economics and Statistics, 47 (1965): 81–86.CrossRefGoogle Scholar
Rørvik, Kjell Arne. “Knowledge Transfer as Translation: Review and Elements of an Instrumental Theory.” International Journal of Management Reviews, 18 (2016): 290–310.CrossRefGoogle Scholar
Sohn, Eunhee, Chang, Sung Yong, and Song, Jaeyong. “Technological Catching-Up and Latecomer Strategy: A Case Study of the Asian Shipbuilding Industry.” Seoul Journal of Business, 15, no. 2 (2009): 25–57.Google Scholar
Solli-Sæther, Hans, and Karlsen, Jan Terje. “Knowledge Transfer in Shipbuilding Projects: A Study of Facilitating Mechanisms.” International Journal of Project Organisation and Management, 4, no. 3 (2012): 256–271.CrossRefGoogle Scholar
Shin, Kyoung-ho, and Ciccantell, Paul S.. “The Steel and Shipbuilding Industries of South Korea: Rising East Asia and Globalization.” Journal of World Systems Research, 15, no. 2 (2009): 167–192.CrossRefGoogle Scholar
Song, Sungsoo. “Growth and Technological Development of the Korean Shipbuilding Industry.” STI Policy Review, 2, no. 4 (2011): 55–63.Google Scholar
Tenold, Stig. “The Declining Role of Western Europe in Shipping and Shipbuilding.” In Shipping and Globalization in the Postwar Era—Contexts, Companies, Connections, edited by Petersson, Niels P. Tenold, Stig, and White, Nicholas J. 9–36. Cham: Palgrave MacMillan, 2019.CrossRefGoogle Scholar
Todd, Daniel. “Going East: Was the Shift in Volume Shipbuilding Capacity from Britain and Continental Europe to the Far East and Elsewhere During the Latter Half of the Twentieth Century Inevitable?” Mariner’s Mirror, 97, no. 1 (2011): 259–271.CrossRefGoogle Scholar
Wright, Christopher, and Kwon, Seung-Hu. “Business Crisis and Management Fashion: Korean Companies, Restructuring and Consulting Advice.” Asia-Pacific Business Review, 12, no. 3 (2007): 355–373.Google Scholar
Yülek, Murat A. “On the Middle-Income Trap, the Industrialization Process and Appropriate Industrial Policy.” Journal of International Competition and Trade, 17, no. 3 (2017): 325–348.CrossRefGoogle Scholar
University of Glasgow, Business Archive Centre (UGBAC)Google Scholar