This article introduces the concept of structural competitiveness to explain the rapid development of South Korean steel industry. Three elements of structural competitiveness are: state autonomy, sound economic policy and indigenous technological capability. These elements have a significant bearing on the bargaining capacity of the state, autonomous investment decisions, labour control, the acquisition and absorption of modern technology, and ultimately international competitiveness. Global competitiveness of South Korea does not refute the technological dependence of developing countries. Rather it suggests the kind of socio‐institutional and economic policy contexts that are often necessary to foster competitive industries.