Regional Policies and the Implications of Restructuring in the Steel Industry

Hyunkyung Choe ()
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Hyunkyung Choe: Korea Institute for Industrial Economics and Trade, http://www.kiet.re.kr

No 20-17, Industrial Economic Review from Korea Institute for Industrial Economics and Trade

Abstract: Since first industrializing, Korea has maintained a growth strategy centered on export-oriented major industries, selecting and supporting manufacturing industries suited to each region and creating a basis for growth. Therefore, the structure of the main manufacturing industry in any given region has a great influence on the overall economy of that region. As a result, the stagnation of major manufacturing industries has led to the formation of a structure that is directly connected to social issues that go beyond employment and welfare in certain regions or mere bankruptcy or management difficulties at specific companies. This can be seen in the example of the regional economic downturn that followed the closure of the General Motors plant in Gunsan in 2019. This study focuses on the steel industry, in which the necessity of restructuring is raised, while recognizing that it is more important than anything else to reduce the negative impacts of stagnation of the main regional manufacturing industry on the local economy and increase the self-sustainability of the region. Therefore, the purpose of this report is to introduce the current status of the steel industry’s base regions in Korea and to devise a long-term plan to overcome the serious side effects of a transforming industrial structure on the local economy. Therefore, this study does not focus on securing the competitiveness of the Korean steel industry itself, but more on what kind of countermeasures should be prepared at the regional level in the long term to minimize the negative impact on the region when the main manufacturing industry is in decline.

Keywords: manufacturing; steel; steel industry; regional manufacturing; regional economics; regional economic structure; regional employment (search for similar items in EconPapers)
JEL-codes: L61 R58 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2020-12-01
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