[VIEWPOINT]Use soccer spirit on factory floorKorean soccer, once the perennial underdog, stands at the pinnacle of a miraculous achievement in World Cup play. Korea took itself to that position, beating favorites placed much higher in the international ranking. The feat poses challenges as to what our economy can learn from that transformation and success we witnessed during the last month.
The accomplishment presents the hope that our traditional industries, representing the old economy, can gain strength. The traditional industries are in inertia just as Korean soccer was before it was reshaped by Guus Hiddink, the Korean national team's coach.
Korea's traditional industries after the financial crisis of 1997 were suffering from the "nutcracker syndrome," squeezed between more advanced countries and developing countries. They were also rapidly losing the attention of the government and public, who were shifting their interest to cutting-edge industries of the new economy. But the fundamental question remains unanswered, which is whether traditional industries are in fact a dying breed, and can we survive without them?
Clearly, no matter how glamorous and popular the new economy becomes, traditional industries will never die, because the demand associated with the basic human needs of food, clothing and housing will always be overwhelmingly greater than the demand for the products of any new industry. Research by Bain & Company, a consulting firm, shows that 80 percent of the world's best companies are in traditional industries. Textiles had been considered the typical example of a dying breed, but some of the most advanced countries continue to be the leading exporters in this field, with the United States and Italy occupying the second and third places. Evidence abound of the important position that traditional industries occupy in our industrial policy.
Another critical issue is the livelihood of nearly 50 million people in the event traditional industries are replaced. If all were to be given up to the world's factory, China, the workers employed in automobile and shipbuilding would be out of jobs, and they are workers that cannot be absorbed by the information technology and biotechnology sectors. Even in the United States, the birthplace of information technology, IT represents just 8 percent of the economy, whereas traditional manufacturing accounts for more than 50 percent.
We have learned from experience that the sophistication of cutting-edge industries makes for an extremely costly but rarely profitable investment. Korea is years from head-to-head competition in the new industries.
We have learned from the Korean soccer team's success the importance of fundamentals in terms of skill and strength. The same can be said about manufacturing. It is time to leave the dream of the golden egg and fortunes made over night to speculators and go back to the basics of making a profit in traditional industries. A solid old-line company can be just as good or better than any hotshot Kosdaq wonder.
Our traditional industries are at an important juncture. They can merge with new technologies to generate greater value or move production to low-cost locations, such as China, and see a sharp improvement in profitability.
The first course is the path to the ranks of the greatest economies. For example, our shipbuilders, a highly automated industry, have won contracts to build high-end cruise ships and liquefied natural gas containers. A sewing machine maker has developed a computerized embroidery machine, taking 30 percent of the global market. These are the results of merging the traditional and the new.
It must be the priority in industrial policy to give traditional industries the wings of new technologies. And new industries do not have to be about something fancy; it is about blending a new way of doing business into existing industries. That is where our focus should be, but companies are limited in their capacity to do this alone. They need the government, research organizations and the public.
We made it to the World Cup semifinals, something that appeared impossible. The challenge to remake our industries should be confronted now.
The writer is the chairman of the Korea Chamber of Commerce and Industry.
by Park Yong-sung