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South Korea INDUSTRY
The growth of the industrial sector was the principal
stimulus to economic development. In 1987 manufacturing
industries accounted for approximately 30 percent of the gross
domestic product
(GDP--see Glossary)
and 25 percent of the work
force. Benefiting from strong domestic encouragement and foreign
aid, Seoul's industrialists introduced modern technologies into
outmoded or newly built facilities at a rapid pace, increased the
production of commodities--especially those for sale in foreign
markets--and plowed the proceeds back into further industrial
expansion. As a result, industry altered the country's landscape,
drawing millions of laborers to urban manufacturing centers.
A downturn in the South Korean economy in 1989 spurred by a
sharp decrease in exports and foreign orders caused deep concern
in the industrial sector. Ministry of Trade and Industry analysts
stated that poor export performance resulted from structural
problems embedded in the nation's economy, including an overly
strong won, increased wages and high labor costs, frequent
strikes, and high interest rates. The result was an increase in
inventories and severe cutbacks in production at a number of
electronics, automobile, and textile manufacturers, as well as at
the smaller firms that supplied the parts. Factory automation
systems were introduced to reduce dependence on labor, to boost
productivity with a much smaller work force, and to improve
competitiveness. It was estimated that over two-thirds of South
Korea's manufacturers spent over half of the funds available for
facility investments on automation.
In 1990 South Korean manufacturers planned a significant
shift in future production plans toward high-technology
industries. In June 1989, panels of government officials,
scholars, and business leaders held planning sessions on the
production of such goods as new materials, mechatronics--
including industrial robotics-- bioengineering, microelectronics,
fine chemistry, and aerospace. This shift in emphasis, however,
did not mean an immediate decline in heavy industries such as
automobile and ship production, which had dominated the economy
in the 1980s.
Except for mining, most industries were located in the urban
areas of the northwest and southeast. Heavy industries generally
were located in the south of the country. Factories in Seoul
contributed over 25 percent of all manufacturing value-added in
1978; taken together with factories in surrounding Kyonggi
Province, factories in the Seoul area produced 46 percent of all
manufacturing that year. Factories in Seoul and Kyonggi Province
employed 48 percent of the nation's 2.1 million factory workers.
Data as of June 1990
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