South Korean Government Presents Manufacturing Industry Renaissance Vision

Jun 20, 2019

‘Manufacturing Industry Renaissance Vision and Strategy’ that was announced by South Korean Government includes strategies that will create smart manufacturing industry and detailed strategies for strengthening soft power of major industries and assisting South Korea to become a powerhouse in manufacturing industry. It complies strategies for vitalizing manufacturing industry and presents detailed strategies.
“While this strategy covers strategies that were presented in the past, it also has various opinions from economic groups, businesses, and experts from a long-term and comprehensive perspective.” said Minister Sung Yoon-mo of Ministry of Trade, Industry and Energy (MOTIE). “It shows South Korean Government’s strong will on making manufacturing industry, which is the foundation of our economy and a precious asset, more innovative as one of national agendas.”
To achieve renaissance vision for manufacturing industry, South Korean Government presented acceleration of innovation through smartness, eco-friendliness, and convergence, promotion of new industries as major industries, complete restructuring through challenges and accumulation, and strengthening of South Korean Government’s role.
First three strategies include detailed goals and direction to become one of four powerhouses in manufacturing industry by 2030. Last strategy presents major direction for South Korea’s manufacturing industry and it also clearly states roles of South Korean Government that provides support and steppingstone for businesses.
◊South Korean Government to apply smartness, eco-friendliness, and convergence to accelerate innovation
South Korean Government’s first strategy is to accelerate innovation to industrial structure by applying smartness, eco-friendliness, and convergence. It shows South Korean Government’s will to take the lead in smartness, eco-friendliness, and convergence as these three trends are currently major trends globally.
“These three trends are going to be very important for our industries.” said Minister Sung. “We cannot achieve our goals by following after these trends, but rather we have to take the initiative.”
South Korean Government chose AI-based industry intellectualization centered on smart factory and smart industrial complex to make manufacturing industry ‘smarter’. It is going to establish national strategies on AI by end of this year and its goal is to construct 2,000 AI factories by 2030. To apply ‘eco-friendliness’ to manufacturing industry, South Korean Government set up investment plans to grab upper hands in eco-friendly markets. Prime example is to convert major industrial complexes that emit large amount of pollutants into ‘clean manufacturing industrial complex’. South Korean Government suggested its plan to utilize regulatory sandbox and regulation-free zone to implement more ‘convergence’ between industries.

South Korean Government Presents Manufacturing Industry Renaissance Vision

◊Converting new industries into major industries
South Korean Government is planning to promote new industries as new major industries and carry out major changes to current major industries. To promote system semiconductor, future car, and bio industries as three new major industries, it is going to invest $7.18 billion (8.4 trillion KRW) until 2030. It is going to help current major industries such as semiconductor, display, and secondary battery to grab upper hands in next-generation technologies so that they can become high-value industries. For industries such as automotive and shipbuilding industries that are currently in critical situation, it is going to apply eco-friendly and smart technologies to drastically change structure of their industries.
It is also going to expand its support on exportation and insurance to promote new industries. It is going to increase amount of special guarantee program based on export contracts for small and medium businesses to $427 million (500 billion KRW) and amount of trade insurance fund from $1.28 billion (1.5 trillion KRW) to $1.71 billion (2 trillion KRW). Its plan is to create safe steppingstones to create at least 50 first-class businesses every year.
It also set up a plan for focusing its support for material and part-related industries. It is going to completely revise ‘Material and Part Special Act’ so that corresponding policy also affects equipment industry. It is going to invest $855 million (1 trillion KRW) every year into development of top 100 major materials, parts, and equipment and it is going to push for establishment of digital simulation platforms for metal, chemistry, ceramic, fiber, and machinery.
◊South Korean Government to restructure industrial ecosystem
To change industrial structure, South Korean Government is also going to drastically change ecosystem through challenges and accumulation. It presented innovation to technologies, training of talented individuals, and financial innovation as major ways to change ecosystem.
It is going to set up a system that will train talented individuals who are needed by manufacturing industry that goes through drastic changes at the right time. It is also going to change demand base and engineering education.
It is going to restructure R&D system based on challenges, speed, and accumulation and it is going to establish a financial system that will support challenges and growth of manufacturing businesses. It is going to establish a large private fund worth $10.3 billion (12 trillion KRW) by next year.
◊South Korean Government to present major directions for manufacturing industry
South Korean Government is planning to consistently present major directions for manufacturing industry as competitions between global countries are becoming more intense. This is because there needs to be private-public cooperative system to vitalize South Korea’s environment on investment and to push for policies on large-scale smart factory and smart industrial complex. It is expected that ‘manufacturing industry renaissance strategy meeting’ that will be led by President Moon Jae-in and government departments and private businesses will be the center for South Korean Government’s plan.
It is estimating that added value of manufacturing industry will increase from $437 billion (511 trillion KRW) in 2018 to $674 billion (789 trillion KRW) in 2030. Labor productivity is expected to improve by 40%. Its plan is to have system semiconductor, future car, and bio industries as new major industries and maintain first place in memory and OLED industries that will become major products during the Fourth Industrial Revolution.
“Current strategies have reached their limit as foreign environment is changing rapidly.” said Minister Sung. “Although ‘manufacturing industry renaissance vision and strategy’ is not an easy goal, we are trying to become a powerhouse in manufacturing industry by working with private businesses.”
Staff Reporter Byun, Sanggeun | sgbyun@etnews.com

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