Korea’s experience also illustrates how good crisis management can accelerate structural adjustment. The Asian financial crisis of the late 1990s led to significant down-sizing among large firms in Korea. This process was characterized by mass lay-offs of highly-skilled personnel, and large reductions in corporate R&D spending. The response of the Korean government, in addition to boosting education expenditure, was to increase its R&D budget, to offset the decline in corporate R&D spending. Moreover, it used the crisis as an opportunity to develop a technology-based SME sector, using the Special Law to Promote Venture Firms (enacted in 1998). A co-ordinated.
