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Korea’s major industries deliberate the meaning of ‘empty suits’. Korea has growth potential through the innovation of manufacturing business.

Author Yoon Woojin Date 2016.10.04 Issue No 635
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What counts in the industrial competitiveness is how much added-value we make in the value chain rather than what to export or how much we export them.

Developed nations are shifting its value from production centered low value activities toward technology and knowledge centered high value activities through ‘manufacturing without factories’ and service innovation.

 

Although Korean industries have recently found some troubles, major home industries are still estimated to have high growth potential with the innovation in the manufacturing business based on the capacity learned from Asian financial crisis in 1997.

 

Comparing competitiveness and profitability of domestic manufacturing with those of other nations in the view of global value chain, Korea ranks higher than China. Furthermore, Korea has figures close to those of developed nations. Therefore, it will be too pessimistic to say that Korea’s major industries are like empty suits.

 

In order not to let Korean industries be degraded as empty suits, it is important to double our effort to strengthen the core capacity of Korean industries by concentrating what we have selected. Also, restructuring on a regular basis is necessary.

 

Korean government need to push ahead with preemptive M&A policy and increase innovative and convergent R&D investment in order to strengthen the value chain competitiveness and pursue early restructuring.