Rising from the ashes of war, Korea has joined the ranks of advanced countries. The rapid development of the Korean steel industry offers lessons to developing countries. The development patterns differ before and after the financial crisis of 1998. Examining the changes that took place around the crisis of 1998 based on factors related to steel use, there are some distinctive items: a significant slowing in the urbanization rate after 1996, gross capital formation as percentage of GDP declining after peaking in 1996, and the Korean economy being shifted from government-driven to market-driven. The author adopted various theories to re-examine the success factors and offer implications for developing nations—catch-up theory, infant industry argument, fourth factor of production, Lewis turning point, and endogenous growth theory.

Based on its analysis on the development and success factors of the Korean steel industry, this article offers several policy implications for developing countries. The first is the importance of the government’s role and strategic decisions. The second implication is entrepreneurial leadership and a “can-do” attitude. The third is the importance of industrial policy based on medium- to long-term outlook for supply and demand. Finally, there is the importance of determined drive of technological development and R&D investment.