A Strategy for Localization and Commercialization of Equipment and Materials:The Crux of the Paradigm Shift in Shipbuilding

Yeonhong Yu () and Eunchang Lee ()
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Yeonhong Yu: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr
Eunchang Lee: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr

No 21/4, Research Papers from Korea Institute for Industrial Economics and Trade

Abstract: The shipbuilding equipment and materials (E&M) industry can play a crucial role in the paradigm shift occurring in the shipbuilding sector, dominated by the transition to smart and eco-friendly vessels. An aggressive strategy for localization and commercialization of shipbuilding E&M is essential to bolstering the shipbuilding industrial ecosystem in Korea. The influence of shipowners (shipping companies) is absolute in decisions on whether to use local E&M on a given vessel. A vendor wishing to make it on a company’s maker list requires a track record and high product reliability, something any strategy must consider. Korean E&M manufacturers are mostly small in scale and limited in life-cycle service capability, from investment in R&D to certification, inspection, production, marketing, and customer service. Meanwhile, global E&M vendors have grown into market leaders through a phased approach utilizing M&A, strategic partnerships, joint ventures with global companies, and cooperation with upstream and downstream industries. Korean manufacturers must follow these trends and assume a multi-perspective strategy to improve competitiveness. This paper explores ways through which Korean government might provide effective support measures for life-cycle E&M, a sector in which domestic players are weak. Such support will include enabling better access to information, alongside aid for technological development, certification and inspections, marketing and customer service platforms, and guaranty insurance. Such efforts will allow for import substitution of core E&M products and stimulate market expansion, thereby helping maintain and reinforce the global competitiveness of Korean shipbuilding.

Keywords: shipbuilding; manufacturing; shipbuilding E&M; Korea; green ships; shipbuilding innovation; shipbuilding policy; manufacturing policy; manufacturing innovation; innovation; innovation policy; small and medium-sized enterprises; SMEs; SME policy; lifecycle E&M; competition policy (search for similar items in EconPapers)
JEL-codes: L60 L62 L64 L69 L90 L98 O30 O38 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2021-10-28
New Economics Papers: this item is included in nep-cse
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