The manufacturing industry has played a key role in Korea’s economic growth. As of 2013, the manufacturing industry contributed around 30 percent to the national GDP and 20 percent to national employment, both of which are high compared to other developed countries. However, despite maintaining high global competitiveness, there are serious concerns over the sustainability of the competitiveness. It is expected that, within a few years, the technology gap between Korea and China will close in major industries. Productivity is an important factor in determining the competitiveness of an industry. Applying plant-level data from the Mining and Manufacturing Survey and measuring the aggregate productivity growth of the Korean manufacturing industry over the past two decades, this study finds that aggregate productivity growth began slowing in 2004 and declined steeply during the past three years. It was also revealed that when aggregate productivity growth is decomposed into technical efficiency growth and resource reallocations, the decline in technical efficiency growth accounted for the majority of the slowdown. This study also examines the changes in the productivity growth of young plants. This study finds that the contribution of young plants to aggregate productivity growth is disproportionately large. Between 1995 and 2013, when young plants generated an average 13 percent of value-added, they contributed 48 percent to aggregate productivity growth. In comparison, small plants with less than 300 employees contributed an average 36 percent to aggregate productivity growth, which is less than their share (47 percent) of value-added.
However, the share of young plants (younger than six years) in the total number of plants dropped from 45% in 1995 to 28% in 2013. Consequently, their share of value-added dropped similarly over the period. Productivity growth declined from 3.2 percent on average during the first half of the twenty-year period to 2.4 percent in the second half; and dropped to 1.5 percent in the last three years of the period. The results show that the decline in the productivity growth rate of young plants is associated with the slowdown in aggregate productivity growth. It was found that the lower growth rate of continuing young plants mainly contributed to the decline in young plants’ productivity growth. Over the last ten years, the Korean government has increased support for start-ups. The results suggest that the government should focus on identifying the challenges that young firms face and promote their growth.
한국 제조업의 역동성과 시사점
세종 : 한국개발연구원
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < Manufacturing|