By comparing industrial policies and industrial restructuring of Taiwan and Japan, as the major competitors of Korea, this study suggests the ultimate direction and political measures for the Korean government's future industrial strategy.

This paper is organized as follows: Section II reviews the background of industrial restructuring as well as the recent trends of Asian newly industrialized economies. Section III illustrates the evolution of industrial restructuring, focusing on changes in industrial policies of Korea, Taiwan and Japan. The efficiency and international competitiveness of industrial restructuring are explored in Section IV by comparing the manufacturing sectors in the three countries. Finally, policy implications and directions are provided in Section V.