Light Industries Such As Textiles, Apparels


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  • Light Industries Such As Textiles, Apparels

    1. 1. 2020 Megatrends and Korea Industry Vision KIET Korea Industry Vision 2020 Team Dongsoon Lim, Ph. D. Research Fellow
    2. 2. Contents Introduction How to Identify Megatrends Megatrend Analysis by KIET Team Megatrend Analysis by Survey Megatrend and Korea Industry Vision
    3. 3. Introduction □ Megatrends that will shape the future for the Korean Industries of 2020. □ KIET, in close collaboration with KIET specialists and a wide range of experts outside the institute, has worked to identify major factors and megatrends that will shape the world of 2020. □ The key megatrend fields identified are: (1) World Economic Order (2) Labor, Resources, and Management: Aging, Environment and Natural Resources, and New Management (3) Science and Technology (4) New Culture and Consumption Patterns (5) Korea-specific Situation: South-North Relations and Balanced National Development
    4. 4. Methodology □ To Select the Megatrends for the KIET Korea Industry Vision Project, we reviewed a number of reports and books, and brought together some 24 leading outside experts from a wide variety of disciplines and backgrounds - KIET Team selected more than 60 major trends, studying various methodologies and reviewing a vast number of recent future studies, (MOCIE, KISDI, STEPI; NIC, DBR) - The experts engaged in wide-ranging discussions with the KIET project team and jointly held seminars and workshops for in-depth reviews of key megatrends. - We solicited the first selection of trends into 15 major megatrends - KIET, with R&B Research, Co., conducted a survey to identify core features and priority of the megatrends
    5. 5. Megatrend Analysis More than 60 Megatrends 24 leading Outside experts <ul><li>Future studies by various disciplines and backgrounds </li></ul><ul><li>Seminars, workshops for in-depth reviews and selection </li></ul>Delphi Survey Check the features of Megatrends 15 Megatrends
    6. 6. 15 Megatrends   15) Regional Innovation and Balanced National Development 14) Progress in South-North Korean Economic Cooperation 13) Evolution of New Culture 12) New Consumption Patterns 11) Hegemony of Technology : Standardization and Intellectual Property Rights 10) Challenge to New Technology : Rise of National Strategic Technology 9) Fusion Technology: IT ㆍ BT ㆍ NT ㆍ New Materials   8) Advent of Bio-economy   7) Maturation of Digital and Network Technology   6) New Wave in Management : Knowledge-based and CSR   5) Paradigm Shift in Financial Markets   4) Degradation of Environment and Natural Resources   3) Aging : Change in Demographic Structure   2) Power Shift in World Economic Order and Change in Comparative Advantage   1) Integration of the World Economy 15 Megatrends Korea-specific Situation Evolution of New Culture and Consumption Pattern s Acceleration in Technology Innovation Labor, Resources, and Management Change in World Economic Order Fields of Megatrends
    7. 7. Change in World Economic Order 1) Integration of the World Economy □ Trade: - Contradictions of globalization - Relative weakening of multilateralism and continuous expansion of regionalism and cooperation in economic blocs □ Financial Markets: - Globalization in international financial Markets - Improvement and cooperation in financial and macroeconomic policies and management will set the stage for future dynamism, e.g. deregulation □ Multinational Corporations: - Acceleration in global network in production, processing, and services
    8. 8. Change in World Economic Order 2) Power Shift and Comp arative Advantage □ U.S. and Asian Heavyweights : role of growth engine (Growth prospects during 2005-2020: U.S., 3.1-3.2%, China, 7.5%-5.8%) □ EU and Japan : Still need to manage their demographic challenges (Growth prospects during 2005-2020:Japan, 1.3-1.8%, EU, around 2.0%) □ Energy and population growth : core driving forces for power shift in the world economic order □ China as Manufacturing Superpower and continuous competition against existing Superpowers: - Emergence of China and the need to adapt - Superpowers of the previous age such as Japan and Germany still maintain competitive edge in manufacturing
    9. 9. Labor, Resources, and Management 3) Aging : Change in Demographic Structure □ Divergent aging patterns displayed, but mostly having negative influence on world economic growth - In developed countries and many of the more advanced developing countries, the declining ratio of working people to retirees are straining supply as well as social services, pensions, and health systems - Measures being taken to counterbalance aging include delaying retirement, encouraging greater participation in the workforce by women, and relying on migrant workers □ New consumption pattern and rise of elderly-care and –elderly-friendly industries □ Need to prepare and support ‘double-cropping’ of life by active labor policies
    10. 10. Labor, Resources, and Management Forecast of Korea’s Future Demographic Structure
    11. 11. Labor, Resources, and Management Proportion of Immigrants by Major Countries
    12. 12. Labor, Resources, and Management 4) Degradation of Environment and Natural Resources □ Climate Change and Urban Pollution as two key environmental challenges □ Continuous strengthening of international environmental regulations by various multinational environmental agreements-acting as trade barriers? □ Growing demands for energy—especially by the emerging powers—through 2020 - Substantial impacts on the world economy as well as geopolitical relations (most importantly, China and India) - Fossil fuels, still dominant; more than 90 % of additional energy supply through 2020 - Nuclear power, very moderate increase
    13. 13. Labor, Resources, and Management - However, 96 percent of the total projected increase in nuclear power capacity accounted for by emerging economies; Of the 55 GW of additional nuclear power installed for emerging Asia, 24 GW went to China, 12 GW to India, 12 GW to South Korea (EIA, 2005) <ul><li>High uncertainty and moderate increase in energy prices </li></ul><ul><li>Possible oil price volatility in the future principally because of unforeseen political and economic circumstances-tensions in the Middle East </li></ul><ul><li>On the other hand, market forces to restore balance in long-term </li></ul>
    14. 14. Labor, Resources, and Management 5) Paradigm Shift in Financial Markets □ Global Financial Market Paradigm: Deregulation, Liberalization, Integration □ Financing innovation and networking alignment between financing and (IT) technology & infrastructure □ Multi-polarization in Global Financial Market □ Increase in long-term financial assets such as mutual funds □ Securitization: expansion of private equity market as a non-standard form of securitization - Diversification of investment and risk hedging - Converging financial functions □ Horizontal integration of financial and non-financial ind. □ International integration of financial regulation for risk-sharing
    15. 15. Labor, Resources, and Management 6) New Wave in Management □ Knowledge-based economy: continuous creation, expansion, and utilization of knowledge in new management - Important role of CKO (Chief Knowledge Officer) □ Corporate Social Responsibility-Ethics and Transparency - Rising consumer sovereignty - SRI (socially responsible investment); UN, TI (Transparency International-Ethic Round; EU, Promoting a European Framework for Corporate Social Responsibility-Green Paper Importance of New Management Features: Survey results 37.4 2.0 6.9 35.9 14.4 3.4 R&D Quality Control Strategic Alliance Investment on Human Resources Global sourcing of Human Resources Speed management
    16. 16. Acceleration in Technology Innovation 7) Maturation of Digital and Network Technology □ Complication of Technologies vs. Simplification of Interface □ Digital and network technology: - Acceleration-Huang's Law instead of Moor's Law, - Fusion-TSP (Total Service Provider), - Ambient and Business Intelligence, - Servitization-SoC (System-on-Chip), Embedded Software □ Consumer Demands: Multimedia, Customization, Mobility, Security □ Entering Ubiquitous society-Computing, Networking, Censoring □ Softening, increasing transparency and efficiency for (manufacturing) industries-weightless economy
    17. 17. Complication Multimedia Customization Security Mobility Simplification Acceleration Fusion Servitization Intelligence Acceleration in Technology Innovation Key words for 2020 Digital·Network Technology Trends Demand-side Supply-side
    18. 18. Acceleration in Technology Innovation 8) Advent of Bio-economy □ The biotechnological revolution is at a relatively early stage, and major advances in the bio-sciences and bio-industries continue to punctuate the 21st century - Major achievements made in combating disease, increasing food production, reducing pollution, and enhancing the quality of life □ Most significant developments are: - Genomic profiling, Biomedical engineering, Therapy and drug developments, Genetic modification, DNA identification □ Intensifying competition in biotechnology among leading and following countries □ Some biotechnologies will continue to be controversial for ethical and religious reasons: strengthening global bio-standards, e.g., biosafety protocol
    19. 19. Korean Biotechnology Competitiveness Index: Survey results Note: The index at the last column is the forecast of future Korean Biotechnology Competitiveness compared to world top technology in 2020; based on responses from 438 experts from three major fields Acceleration in Technology Innovation 82.7 18.4 48.4 27.0 4.9 1.4 Total (Average) 84.0 22.9  51.4  21.4  1.4  2.9  Human and Social Sciences 80.8 12.3  46.2  31.0  8.2  2.3  Science & Technology 84.0 22.2  49.2  25.4  3.2  0.0  Economics & Biz. Major Fields Average 91 ∼ 100 81 ∼ 90 71 ∼ 80 61 ∼ 70 below 60 Areas
    20. 20. Acceleration in Technology Innovation 9) Fusion Technology: IT ㆍ BT ㆍ NT ㆍ New Materials Development stages Development stages Source: Ahlqvist, T. (2005). &quot;From Information Society to Biosociety? On Societal Waves, Developing Key Technologies, and New Professions&quot;, Technological Forecasting and Social Change, 72(5), June, pp. 501-519
    21. 21. □ The synergic combination of IT, NT, BT, and new material technologies □ Rapid change induced in value-chain, manufacturing process, industrial structure and paradigm □ Creation of new fusion technology markets and increased employment Acceleration in Technology Innovation - Healthcare censor - DDS (Drug Delivery Sys.) - Bio-photodiode - Bio-EL Device - Visual Prosthesis - Molecular imaging - Micro environment censor - Ubiquitous Healthcare System - Nano-biosensor - Nano-biology - Nano-medicine <ul><li>- Bioinformatics </li></ul><ul><li>- Bioelectronics </li></ul><ul><li>Human Interface </li></ul><ul><li>Bio-computer </li></ul><ul><li>Biosensor </li></ul><ul><li>Biochips </li></ul><ul><li>Telemedicine </li></ul>- Nano-computer - Nano-motor - Nano-sensor Detailed products and tech. INBT(IT+NT+BT) NBT(NT+BT) IBT(IT+BT) INT(IT+NT) Fusion Tech.
    22. 22. Acceleration in Technology Innovation 10) Challenge to New Technology : Rise of National Strategic Technology □ Strategic Technology: beyond economic profitability - Requires longer-term investment and high quality human resources - Up to the sky; Into space; deep down to the sea □ Dual-use technology (military-commercial technology): Lightweight helicopter; mid- and low-orbit satellite; new energy sources such as fuel cell, hydrogen cell □ Aircraft technology: lightweight, smart technology, unmanned airplane; geostationary orbit projectile □ Marine technology: sustainable marine development - Food, natural resources, and environment - “Blue Revolution” - Development of wing-in-ground-effect ship (WIG)
    23. 23. Acceleration in Technology Innovation 11) Hegemony of Controlling over Technology : Standardization and Intellectual Property Rights □ Standards war and reinforcing intellectual property rights - In 2020, intense global competition and rapid innovation will lead to a shortening of product lifecycles. - To remain competitive, successful countries as well as businesses and industries need to maximize the potential of their products using standards and IPR □ The WTO TBT (Technical Barriers to Trade): “one standard, one test, accepted everywhere&quot; □ In the long-run, Standards and IPR present opportunities as well as challenges - The potential for high technology companies to profit in the world market is quite optimistic. - Korea as a technology- and culture-exporting country
    24. 24. Evolution of New Culture and Consumption Pattern s 12) New Consumption Patterns □ Major driving forces of new pattern: Increasing trend of aging and single families □ Greater Polarization and Fragmentation - Wealthier groups leading consumption change - The live-for-today ‘now’ attitude of the young and single family will thrive - Polarization is not only income based: too much choice can be equally polarizing and a source of great pressure on individuals □ Desire for greater security, health, and customization in consumption as major factors of purchase. □ Greater Emphasis on Sustainability and Environmental Concerns - Behavior will change by price increase as well as attitude
    25. 25. Evolution of New Culture and Consumption Pattern s 13) Evolution of New Culture □ Globalization of ethnic cultures will lead to harmonization with dominant cultures - Glocalization (Globalization + Localization) continues □ However, changes within cultures from “institution-centric&quot; to &quot;citizen-centric“ or &quot;customer-centric“ by networked, distributed culture; Homing increases - More LOHAS (Life of Health, Amenity, and Security) and downshift □ From he Big Politics and &quot;grassroots“ activity to the emergence of Big Grassroots - NGO and Role of Women: Arising political activity that is bottom-up, empowered by electronic networks, and large and sophisticated enough to challenge Big Politics without generating substantial costs
    26. 26. Korea-specific Situation 14) Progress in South-North Korean Economic Cooperation □ The inter-Korean relationship will shape the future of South-North economic cooperation around 2020 - Stability of North Korean regime; Reforming and Opening of North Korea - Easing political and military tensions between South and North Korea □ Two scenarios:   ①fast vs. ②moderate Inter-Korean economic cooperation progress - In ②, South Korean firms will increase investment mainly in economic zones like Gaeseong Industrial Complex; light industries such as textiles, apparels, and labor-intensive electronics will garner gain of intra-industrial division □ Economic cooperation will contribute to the improvement of North Korea’s industrial structure
    27. 27. Prospect for Inter-Korean Econ. Cooperation: Survey results Note: Scales ① , ③, ⑤ represent negative, neutral and positive areas of inter-Korean economic cooperation and integration prospect, respectively; based on responses by 438 experts from three major fields Korea-specific Situation 11.5 33.9 27.4 24.7 2.5 Total (Average) 11.4  50.0  15.7  21.4  1.4  Human and Social Sciences 10.9  28.0  32.0  24.6 4.6  Science & Technology 12.2  33.3  27.5 25.9  1.1  Economics & Biz. Major Fields ⑤ ④ ③ ② ① Scales
    28. 28. Korea-specific Situation 15) Regional Innovation and Balanced National Development (BND) □ “ Regional competitive advantages” is the essential element in BND strategy that attempts to generate long-term competitiveness and ensure the growth of the national economy as well as regional rejuvenation and sustainability □ Innovation, in terms of creative technological knowledge, is a key driver of economic growth and community development in 2020 □ Continuous efforts needed to adjust spatial discrepancy between industrial location and regional innovation system (RIS) □ In 2020, BND will be progressing, coupled with RIS, by economic zones
    29. 29. Korea-specific Situation Prospect for Regional Innovation and Balanced Growth Source: Kim, Sunbae (2005), “Major Issues and Directions of Building of a RIS,” KIET IER , KIET. Globalization-Regionalization (knowledge-based economy) Global Economic Environment Input & investment-driven economy Goal of the Korean Economy Per capital income 50,000 dollars Soundness of the domestic economy Policy Directions & Strategies Uni-core spatial structure centered On Seoul metropolitan area Efficiency (NIS focus) Equity (cluster focus) Independent economic bloc (multi-core spatial structure) Sustainable development of the Korean national economy Establishment of Innovation Systems (NIS, RIS, Clusters) Innovation-driven economy Regionalization of National Economic Development Agglomeration efficiency (cluster-centered RIS) Strengthening of regional competitiveness Advocacy of Balanced develop- ment in 16 cities & provinces
    30. 30. Megatrends Selected by Expert Groups 10.8  9.1  11.8  10.5 14) South-North Korean Economic Cooperation 3.3  3.8  3.5  3.6 12) New Consumption Pattern s 0.8  2.2  1.6  1.7 10) Challenge to New Technology : Nat’l Strategic Tech. 6.4  5.1  6.5  5.9   8) Advent of Bio-economy 5.8  3.7  3.3  3.9   6) New Wave in Management : Knowledge-based and CSR 10.0  12.1  9.0  10.4   4) Degradation of Environment and Natural Resources 11.4  10.0  12.9  11.5   2) Power Shift and Comparative Advantage 3.9  2.3  1.5  2.2 15) Regional Innovation and BND 8.9  7.8  5.5  7.0 13) Evolution of New Culture 11.1  10.6  14.5  12.4   3) Aging : Change in Demographic Structure 2.2  1.3  1.2  1.4   5) Paradigm Shift in Financial Markets 8.3  9.0  8.4  8.6   7) Maturation of Digital and Network Technology 10.3  10.5  10.1  10.3 9) Fusion Technology: IT ㆍ BT ㆍ NT ㆍ New Materials 1.9  5.7  3.7  4.2 11) Standardization and Intellectual Property Right s 4.7  7.0    6.7 6.5   1) Integration of the World Economy Human /Social Sci. Science & Technology Economics and Biz By experts All Megatrends
    31. 31. Which is Most Influential?   1.4       1.7       2.2       3.6       3.9       4.2       5.9       6.5       7.0       8.6       10.3       10.4       10.5       11.5       12.4 Paradigm Shift in Financial Markets   Challenge to New Tech. : Nat’l Strategic Tech.   Regional Innovation and Balanced Nat’l Dev.   New Consumption Pattern s   New Wave in Management : Knowledge-base, CSR   Standardization and Intellectual Property Right s   Advent of Bio-economy   Integration of the World Economy   Evolution of New Culture   Maturation of Digital and Network Technology   Fusion Technology: IT ㆍ BT ㆍ NT ㆍ New Materials   Environment and Natural Resources   South-North Korean Economic Cooperation   Change in Comparative Advantage   Aging: Change in Demographic Structure
    32. 32. Positive Megatrends Development of Digital∙Network IT∙BT ∙NT New Materal – Fusion Technology South-North Korean Economic Cooperation Economics & Biz Sciences Human & Social Sciences Source: KIET-R&B Delphi Survey (2005) 25.2% 23.5% 23.3% 14.0% 14.4% 14.7% 13.0% 14.7% 14.0%
    33. 33. Negative Megatrends Aging: Change in Demographic Structure Environment and Natural Resources Standardization and Intellectual Property Rights Economics & Biz Sciences Human & Social Sciences Source: KIET-R&B Delphi Survey (2005) 26.2% 25.6% 26.4% 21.4% 20.2% 22.0% 15.3% 15.7% 16.2%
    34. 34. Megatrend Groups 15 Megatrends Impacts Demographic Change Aging : Change in Demographic Structure Technology Innovation Integration and Comparative Advantage Environment and Resources Korea-specific Labor TFP Capital , TFP Capital, TFP Labor, TFP Management and Demand TFP Maturation of Digital and Network Tech . Advent of Bio-economy Fusion Technology: IT ㆍ BT ㆍ NT Challenge to New Tech . : Nat’l St r. Tech. Standardization and Property Right s Integration of the World Economy Change in Comp ara tive Advantage Environment and Natural Resources South-North Korean Econ . Cooperation Reg . Innovation and Balanced Nat’l Dev. Other Megatrends An Overview on Megatrends and Their Impacts
    35. 35. Upper-bound + 0.5%p Lower-bound - 0.5%p Megatrends and Economic Impacts Baseline Economy-wide Individual industries 15 Megatrends
    36. 36. The Growth Effects of Major Megatrends Note: 1) Maturation of Digital &Network Technology, Advent of Bio-economy, IT∙BT ∙NT, New Material Tech-Fusion Technology, New Tech Challenge: Rise of National Strategic Technology 2) () in Baseline results from the expert survey results; 1(most negative), 3(neutral), 5(most positive); Number 0 means no effect on the baseline growth path -0.07 0 (1.9) +0.07 Environment/ Natural Resources -0.07 0 (3.2) +0.07 Globalization/ Comparative Advantage -0.50 0 +0.50 Total -0.06 0 (3.4) +0.06 South-North Cooperation -0.20 0 (3.9) +0.20 Technology Trends 1) -0.10 0 (1.8) +0.10 Change in Demographic Structure Lower-bound (Passive policies) Baseline (BAU policies) Upper-bound (Active policies)
    37. 37. Major Megatrends and Impacts on the Industries Note: 1) Especially, fusion technology. Iron & Steel, Textiles, Chemicals, Non-Metallic Mineral Products Machinery (Environmental equipment), Medical service Environment/ Natural Resources Textiles, Chemicals, Electronic parts, Construction, Consumer electronics, Office & Computing Machinery Aircraft, Business service, Logistics, Automobiles, Shipbuilding, General machinery, Iron & Steel, Electric equipment Globalization/ Comparative Advantage - Automobiles, General machinery, Textiles, Consumer electronics, Communications equipment, Electronic parts, Electric machinery, medical equipment , Aircraft, Communication service, Precision machinery Technology Trends 1) - Textiles, Consumer electronics, Electronic parts, Electric machinery, Construction, Logistics South-North Cooperation Automobiles, Shipbuilding, General machinery, Iron & Steel, Textiles, (Precision) Chemicals, Office & Computing Machinery Elderly care (medical equipment and service), Food and Beverage, Finance and Insurance, Real estate Change in Demographic Structure Negatively affected Positively affected Trends
    38. 38. Thank you