중앙데일리

Nation is still too dependent on manufacturing

Industry is accounting for a growing amount of total output by value in the country

Jan 31,2011
Korea’s growing dependency on the manufacturing sector is raising concerns about the country’s economic structure.

According to the Bank of Korea yesterday, the manufacturing industry last year created total value worth 287 trillion won ($257.4 billion), or 30.6 percent of the country’s total of 938.4 trillion won.

Not only is it the first time that the percentage for manufacturing exceeded 30 percent, but it is also a significant increase from previous years.

In the early 1970s, the value created by the manufacturing sector took up less than 10 percent of the country’s total, while it exceeded 20 percent during the late 1980s and 1990s, boosted by the country’s aggressive efforts to increase exports.

The output value of the manufacturing sector tends to rise immediately after periods of economic crisis, such as the Asian financial crisis in 1998 and the global financial crisis in 2009.

“Korea’s development in the manufacturing sectors including electronics, automobiles, steel and shipbuilding have been the driving force in overcoming economic difficulties,” said an official from the central bank.

In the meantime, compared to the manufacturing sector, the country’s service sector showed less growth, and the competitiveness gap between the manufacturing and service sectors widened. Last year, the country’s exports tied to the manufacturing sector were 5.6 times more than exports by the service sector.

“It is risky to have the country’s economic growth depend on manufacturing, as it requires continuous revolution in technology, which means growth can be unstable at times,” said an official from the Ministry of Knowledge Economy, noting that emerging nations such as China are expanding manufacturing sectors that can threaten Korea’s manufacturing sector. The official added that the country should find competitiveness in the service sectors and develop them as future growth engines.

“There is a need to develop high-value service sectors such as medical, information technology, finance and insurance in addition to low-value service sectors such as retail and lodging,” he explained.

The Korea Productivity Center said last week that labor productivity in the service sector was near the bottom of advanced economies in the Organization for Economic Cooperation and Development.


By Lee Eun-joo [angie@joongang.co.kr]



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