The Ministry of Trade, Industry and Energy (MOTIE) held the first Industrial Transformation Forum meeting with its six private-sector subcommittees' chairpersons and representatives of relevant institutions on January 26 at the Korea Chamber of Commerce and Industry (KCCI) to discuss the need and specific measures for industrial transformation.

Forum attendees pointed out that the majority of Korea’s exports and production has centered on 10 areas over the last decade, including semiconductors, computers, automobiles, wireless communication devices and shipbuilding. Aside from a select few items like semiconductors, displays and batteries, China is close on the heels in many areas, not to mention Korea’s steadily increasing trade deficit with China since 2018.

Based on these factors, concerns were raised over the possibility of the Korean economy growing stagnant and losing its industrial powerhouse status in the coming future. Looking 10 years ahead, the forum’s general consensus was that the following structural problems must be addressed now so as to overcome foreseen crises.

One, Korea’s working population is quickly diminishing.

Two, domestic companies’ investment overseas is rising over 10 percent each year, but foreign companies’ investment in Korea is considerably lower.

Three, Korea suffers from serious labor-management issues and growth-impeding regulations.

Four, Korea also lacks new growth engines in spite of its leading R&D investment level, showing that R&D must better translate into successful businesses.

Lastly, the global landscape is becoming more complex as China’s industrial advancement, the U.S.-China technological hegemony race and protectionism are all posing further supply chain risks.

The six chairpersons are currently in charge of facilitating discussions for policy directions on investment, human resources, productivity, corporate ecosystems, global strategy and new businesses.

MOTIE Minister Lee Chang-yang remarked that Korea’s economy is facing various difficulties both externally and internally, and called for an industrial innovation by which Korea can break through and build a solid foundation for industrial competitiveness.

The Industrial Transformation Forum will proceed for 200 days of public-private joint programs, and the first half consists of free civilian discussions. During the second 100-day phase, MOTIE aims to establish the Industrial Transformation Strategy with other relevant ministries based on the various inputs gathered.