Summary Rising wages and an appreciating exchange rate currency forced Korean exporters of manufactured goods to try to move up‐market at the end of the 1980s. This involves improving both product specification and conformance to standards. The Korean government is actively promoting improved quality systems in manufacturing as a means of enhancing competitiveness. Large Korean firms have much in their favour in this area ‐ particularly their technological competence and a well‐educated labour force. However, poor industrial relations and the poor quality of smaller supplier firms are obstacles which need to be overcome if Korea is to compete with advanced industrial countries in terms of quality.