NON-MARKET METHODS IN OPEN MARKET ECONOMY: SOUTH KOREAN EXPERIENCE

Within last decades South Korea achieved prominent results in economical and social development. Started from very law positions (GDP less than in Somalia and Afghanistan in 1960s) it became a member of OECD in 1996 and the 14th world economy in 2010. Being a great example of catching up development South Korea used various activities and ways to promote its economical and social growth and always managed to combine open market economy with non-market methods, like: direct administration of markets; direct and indirect agriculture protectionism; protection of big companies (chaebols) and small business, using customs tariffs, tax incentives, state credits, support of exporters; development of new labour ethics; using of Labour Law for support of industry; increase of human capital based on reforms of education; information component of industrialization and modernization, including creative use of historical background, articulated state ideology, clear verbalization of aims and targets. In times of globalization innovations become the key ingredient for economical and social growth. According to ideas of J. Schumpeter, the main target of innovations is to get the oligopolistic rent over the market profit. Such rent is shared between entrepreneurs, banks, workers and the state. Therefore, as "a stakeholder" of innovative development the government of South Korea does its best to support all kinds of innovations and to protect innovative companies using non-market methods as well. The aim of the research is to study and summarize South Korean experience in use of non-market methods for development of a modern knowledge-based economy. The main tasks were to define the most important non-market methods and their impact to Korean economy. Studying, adoption and implementation of the best world practice may help Latvia and its regions to catch up developed economies faster, avoiding extra expenses and losses inherent to pioneers.