Analysis of Korean emerging industries, Global Export Competitiveness and Economic Contribution
Published on 12 December 2019
Published by Industry & Employment Analysis Division of the Economic Analysis Bureau
In order to secure a leading position in new industries based on traditionally strong industries, a full-fledged global competition has begun with regard to cutting-edge industries such as autonomous vehicles and artificial intelligence (AI). An analysis of the trade status and export competitiveness of Korea’s leading industries and related new industries revealed that exports are overdependent on certain items such as semi-conductors, while new industries including electric and autonomous vehicles (EVs and AVs), robots, system semiconductors and next-generation displays fall behind those of advanced economies such as the US, Japan and Germany, in terms of quality due to a lack of original technology for key parts and materials.
From 2014 to 2018, as leading Korean industries generally maintained an export-oriented outlook, the competitiveness of the semiconductor industry was particularly strengthened through stronger exports with increased market share, while the auto industry witnessed a deterioration in its export-oriented outlook along with reduced market share. As of 2018, the aircraft and drone industry as well as the next-generation display industry are more export-oriented compared to those in major economies such as the US, Japan and Germany; whereas the pharmaceutical and next-generation semiconductor industries exhibited an import-oriented perspective compared to those in major economies. In addition, compared to industries in the US, Japan and Germany, the Korean electric and autonomous vehicles industry, next-generation semiconductor industry and next-generation display industry exhibited significantly lower quality, as their export unit prices were lower than their import unit prices.
The analysis of economic contributions raised concerns about growth without employment as the semiconductor industry – which has a low effect on job creation - spearheads exports among leading industries. Meanwhile, new industries such as the bio industry showed potential as new growth drivers contributing to increased gross national product and employment. The semiconductor, display and computer & computer peripheral industries had significantly stronger effects on value-added inducement from 2016 to 2018, although their effect on job creation was relatively weak. The bio industry exhibited a strong effect on value-added inducement (8.3 trillion won) and job creation (87,000 jobs), thanks to strong exports.