This paper is an empirical analysis of the Dynamic Model of Technological Innovation applied to the Korean automobile industry. The pattern of technological innovation in developing countries—which import product technology from advanced countries, commercialize it, and then compete in advanced country markets—differs from that of advanced countries. First, both product innovation and process innovation continue to increase, and the degree of innovativeness progressively rises. Second, the importance of new product development and cost reduction (cost minimization) in research and development continuously increases. Third, product diversity continues to increase, and the role of users as a source of innovation is greatly enhanced. Fourth, the patterns of change in processes, jobs, and production efficiency are similar to those in advanced countries. In this study, process innovation was divided into equipment innovation and method innovation to enable the dynamic model to explain the competitive sources of today's Japanese automobile industry, and method innovation is also proposed as a solution to problems facing the Korean automobile industry, which is currently confronting new challenges such as labor-management disputes and won appreciation.