This study compares the industrial structures, especially those of manufactures, of different countries based on UN Industrial Statistics. It uses this comparison to grasp the characteristics of Korea’s industrial structure. The compared economies include 19 OECD member states and 3 non-member states—Korea, Malaysia and Singapore. The time period of comparison is from 1970 to 1988.
Over the period, the share of manufactures in the Korean economy rose from 20.2% to 37.8%, representing the fastest industrialization among the studied countries. On the contrary, the advanced economies in the study revealed the decline of manufactures as a result of restructuring less competitive sectors.
Except for some nations with rich natural resources and low population, fast growing economies showed rapid increases in the manufactures’ weight until the industrialization matures in those countries, and then manufactures as well as overall economic growth rates began to fall.
Korea’s industrial structure is less advanced with a large textile industry and a small mechanical industry. On the other hand, it can be viewed as quite advanced with significant shares of automobile, electronics and chemicals.
Calculating the industrial adjustment index, which reflects the relative changes of specific sectors in the whole manufactures, reveals that Korea has gone through restructuring process characterized by the expansion of manufactures. Korea is expected to conduct its industrial structure adjustments on two tracks: inter-industry adjustments and intra-industrial adjustments.
The biggest task for inter-industry adjustment is to enlarge mechanical industry producing capital goods. However, the current lack of sufficient demand and technology does not make it sensible to leave the industry to the market principle, and requires active government intervention. What has to be done for intra-industry adjustment is to find ways to deepen Korea’s strong sectors—automobile, shipbuilding and electronics.
Korea must equip itself with global competitiveness through improving product design technology, developing parts and materials, acquiring brands and enhancing global marketing capacity. For structural deepening of major industries, Korea should promote world top players through managerial innovations of major enterprises and their stronger cooperation with small and medium-sized firms.
Keywords: industrial structure, manufactures, international comparison, mechanical industry, industrialization, restructuring