[Viewpoint] Electric opportunities

I have a tendency of looking at the government’s policies on industry with a jaundiced eye. The government systematically selects and promotes certain industries’ policies, and these policies were widely applied during the rapid economic growth of the 1960s and ’70s. These industry policies utilize the development-driven strategy of “pick and concentrate.”

However, times have changed. Globalization has made it difficult for excessive protection of and support for strategic industries, and the government can no longer pick a few industries to provide assistance.

One of the problems for the government its that the general public is less keen on tolerating the collusive relationship between business and politics associated with industry policies, and civil servants cannot simply pick out a few industries to sponsor anymore.

The industry policies have become memories of the development-driven era.

However, the memory was brought back recently when the government announced the Electric Automobile Industry Promotion Plan. In order to push forward the launch of commercialized electric automobiles from 2013 to 2011, the government will not spare financial and policy assistance.

In fact, the government was never completely against the industry policies. Plans to promote future growth engines and to develop promising new industries were constantly announced, and “green industry” was the latest buzzword.

However, these policies didn’t openly sponsor a certain industry, but rather set a general direction for different civilian business plans or provided partial assistance. So the citizens are quite surprised at the government’s unreserved backing for the electric automobile industry.

However, as far as the electric automobile industry is concerned, I am not prejudiced against this government-driven promotion policy. In fact, I hope the government will promote it even further.

Here, I want to make clear that I have no affiliation with the electric automobile industry. The electric automobile is the growth engine that the Korean economy has been seeking so desperately, and time is pressing for the industry to fully develop.

The electric automobile market is likely to grow rapidly in the near future, and Korea is one of the few countries equipped with a suitable environment for development and production. As interest in environmentally friendly vehicles grows, the demand for the electric automobile will increase.

The competition to develop electric automobiles is already intense. Thirty percent of the new models shown at the Frankfurt motor show last month were electric vehicles. Mitsubishi Motors has already produced a commercialized model of a fully electric automobile, and Toyota has unveiled an electric car as well. The American “Big Three” carmakers and China’s BYD announced plans to manufacture commercialized electric cars next year and the year after.

The Japanese, American and Chinese electric car models will hit the market in 2011. So 2011 will be the showdown for the electric automobile market.

Renault-Nissan, which has put the most energy into the electric car, only presents mass-market electric car models at motor shows. Chairman Carlos Ghosn has put the fate of the company on the electric car, investing $6 billion and assigning 2,000 engineers for development. And Renault-Nissan named Renault-Samsung as the global manufacturing center for electric vehicles since Korea has the strongest battery and information technology industries, the key technology for the electric car development. The decision was based on the same reason for Korea to focus on the electric automobile.

Now the question is who can make better products at a more competitive price. The key is to establish a solid domestic base. The government’s offer includes a tax cut and exemptions for electric car development and distribution and subsidies.

The United States, Japan, China, France, Israel and Denmark have announced various industry boosters, suggesting that the competition to take over the electric car market has turned into a competition of government assistance.

There is no reason for the Korean government to step back. Instead, the government needs to get involved aggressively. Unlike industry policies of the past, the government should try to spread the benefits from nurturing the electric car industry to the domestic consumers and industries in general as well as certain companies.

The writer is an editorial writer of the JoongAng Ilbo. Translation by the JoongAng Daily staff.

by Kim Jong-soo