The backbone of manufacturing

The manufacturing sector has long been the foundation that helped Korea successfully overcome a series of global financial crises. “Root industries,” the fields that use processing technology such as casting, molding, welding and heat treatment especially form the foundation of the manufacturing sector and serve the most basic and pivotal role for the nation’s industrial development.

In 2011, the government enacted laws on the promotion and advancement of root industries and has been promoting various projects to help the sector. Lately, the Small and Medium Business Administration selected more than 100 companies with core root technologies through the root technology specialty companies’ designation system. According to the Korea National Ppuri Industry Center (KPIC)’s industrial statistics last year, companies with a research and development center create an impressive 36 percent higher added value per capita than companies without such a division.

However, the overall technology development level of root industries is still very low. Only 6 percent of the companies in this sector have research centers, and their investment into research and development is a mere 1.2 percent of their parent company’s revenue. This is far lower than the 2.1 percent in the automobile industry and the 4.5 percent in the electronics parts industry.

To address the issue, the government plans to support long-term research and development projects, the training of skilled professionals and expansion to overseas markets to nurture the advanced root industries’ technologies.

In order for the government’s project to bear fruit, the culture of valuing “voluntary technology development” should spread around the industrial sector. Companies need to acknowledge the importance of researching and developing advanced processes for product development and mass manufacturing instead of being pressured or supported by the authorities. Moreover, research institutions and academia need to provide appropriate assistance as the companies make efforts to innovate the process and resolve problems in the course of development. When the efforts of every party converge, the root industries will grow and contribute to the development of the manufacturing industry, creating a new growth engine for the economy.

Kim Jeong-han

Director of the Korea National Ppuri Industry Center