1. Study Objectives and Method

❚ Research Background and Purpose

￮ Since 2015, Jeonbuk State has witnessed the departure of some large-sized companies that hold the lion’s share in the manufacturing industry, potentially leading to an underestimation of the region’s manufacturing value added. Conversely, Jeollanam-do, where the oil refining industry accounts for a large proportion of the manufacturing sector, could have overestimated its manufacturing value added due to the strong performance of the global oil refining industry over the past two decades. 

￮ Aside from this, given that manufacturing performance serves as a driving force for business growth and thus determines whether local economies flourish or languish, Jeonbuk is advised to prioritize fostering and attracting new growth engine manufacturers regardless of their weights in the manufacturing sector while keeping track of any relevant developments. 

￮ We defined a new growth engine manufacturer as an industry with a high proportion of value added in the manufacturing sector (mid-term growth potential) and a high growth rate of value added (growth potential over a decade). Based on this definition, we sought to extract 10 new growth engine manufacturers from 80 manufacturing groups nationwide and analyze them to draw implications. 

❚ Research Scope and Methods

￮ According to the 10th revision of the Korean Standard Industrial Classification, all industries in Korea are classified into 21 sections, 77 divisions, 232 groups, 495 classes, and 1,195 sub-classes; the manufacturing industry is classified into 1 section, 25 divisions, 85 groups, 183 classes, and 477 sub-classes. To facilitate analysis, we reduced the target industries to 80 groups.

￮ After considering both the significance and limitations of the proportion and growth rate of value added, we defined new growth engine manufacturers as industries with a high proportion and growth rate of value added and selected the final candidates through three steps. 

2. Conclusion and Policy Suggestion

￮ The progress analysis of the top 10 growth engine manufacturers over the past decade, between 2012 and 2022, confirmed that semiconductor manufacturing has been at the forefront of driving the nation’s manufacturing sector. In 2022, 85 manufacturing groups attributed 17.5% of their value added to semiconductor manufacturing. Its growth rate in the proportion of value added between 2012 and 2022 also recorded a whopping 108%, indicating its pivotal role as the backbone of the Korean economy. However, the proportion of value added in Jeolla Province has halved, and given that the semiconductor industry is taking center stage in the Fourth Industrial Revolution, it is imperative for the region to build relevant infrastructure.

￮ The healthcare industry, which has grown significantly in importance over the same period (2012–2022), follows semiconductor manufacturing. The proportion of value added for pharmaceutical manufacturing, medical device manufacturing, and the manufacture of medicinal chemicals, antibiotics, and biological products increased by 52%, 68%, and a staggering 200%, respectively. The COVID-19 pandemic has driven significant growth, but the medical manufacturing sector is expected to achieve sustainable growth due to accelerated aging. 

￮ The manufacturing of other chemical products has grown in importance alongside semiconductor and medical manufacturing, driven by the exponential growth of semiconductor and secondary battery manufacturing. Unfortunately, Jeolla Province saw a minimal increase in the proportion of value added and considering that the production of other chemical products supports critical sectors of the Fourth Industrial Revolution, this sector warrants particular attention. 

￮ Another industry that has strengthened its presence is the manufacture of other food products, which is attributable to the rise in the proportion of single-person households. 

￮ Targeting the above three promising manufacturers, we plan to incorporate the analytical findings of this study into our follow-up studies, with the aim of developing and proposing manufacturer-specific strategic roadmaps and detailed action plans through in-depth research and expert consultation. 

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