Cluster in the Creative Economy of Daegu, Korea
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By Nam Hoon Kang, CEO KICOX, presented at the 17th TCI Global Conference, Monterrey 2014.
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Cluster in the Creative Economy of Daegu, Korea
- 1. Cluster in the Creative Economy, Daegu, Korea Nam Hoon Kang Passing the Torch 13 November 2014
Editor's Notes
- Good day, everyone. My name is Nam Hoon Kang and I am the CEO of the Korea Industrial Complex Corporation, which will host the 2015 TCI Global Conference in Daegu, Republic of Korea. Today, I am genuinely honored to make a presentation on the Daegu Conference in front of distinguished scholars from all over the world and numerous experts working in various fields of economic development. In particular, I would like to extend my sincere gratitude to Chairman Christian Ketels who introduced Korea to TCI Global Network and to those of the State of Nuevo León who invited me to this beautiful city of Monterrey.
- Koreans have had a cooperative tradition, called “Dure,” which is to do hard work together with neighbors. The spirit of Dure, which is organizing a community network from early, agricultural times and pursuing shared values, is still rooted deep inside Koreans’ DNA. This tradition, which is similar to today’s cooperative clusters, served as an important foundation for Korea to overcome crises wisely in its modern history and emerge as one of the global powers.
- In its modern history, Korea underwent a dark period of 35 years under colonial rule and was left with its entire lands and industrial bases in ruins after the Korean War. Also, it had almost no natural resources. Shortly after the Korean War, it is said that General MacArthur of the U.S. mentioned it would take about 100 years for Korea to recover from the war.
- However, Koreans did not despair in its situation but united together and showed their grit as they did in Dure. Empowered through its New Village Movement, Korea rebuilt destroyed houses, built schools among the ruins, and constructed highways with aid from developed countries.
- Poor in natural resources, Korea began to make and export wigs, textiles, and shoes. The country also focused on building steel mills, shipyards, and petrochemical plants to develop heavy-chemical industries. In the 1990s, Korea began to invest in high-tech industries such as IT and semiconductors.
- As a result, Korea has achieved an unprecedented economic growth called the Miracle on the Han River.
- In terms of global production, Korea accounts for 35% of mobile devices, 40% of shipbuilding, and 50% of semiconductors (especially NAND Flash).
- From extreme poverty with per capita GDP of USD 150 in 1960, Korea has developed into a country with per capita GDP of USD 24,000(twenty-four thousand U.S. Dollors) and foreign trade at 8th place in the world in 2012.
- With the 15th largest GDP in the world today, Korea has changed from a receiver of foreign aid to a provider.
- In 2010, Korea hosted and chaired the G20 Seoul Summit, thus emerging among genuine global powers.
- The driving force of such growth was none other than the policy of creating industrial complexes. Since the 1960s, Korea has built large-scale industrial complexes to promote industries.
- In its policy of strategic industrial development, the Korean government formed industrial clusters focused on industries with competitive advantage, pursued a growth strategy centered on labor and capital, and created first-generation industrial complexes for light and heavy-chemical industries.
- The Korean government’s planned development of industrial complexes laid the foundation for Korea’s modern industrial clusters. However, it was a time when the expansion of production facilities and SOCs was stressed, competitive mass productions were pursued.
- New, second-generation industrial complexes began in the 1990s. With the advent of the knowledge-based economy, there was a shift in industrial structure toward high-tech and knowledge industries, and the importance of R & D and strengthening of industrial and corporate competitiveness became the new agenda.
- Through creation of research complexes, the Korean government endeavored to link R & D functions with production functions and built advanced scientific and industrial complexes oriented in technological innovation and specialized industrial complexes for the knowledge industry, information and communication, and the cultural industry.
- In Korea’s manufacturing sector, the approximately 80,000 corporations of the industrial complexes account for 70% of production, 80% of export, and 50% of jobs (2 million workers).
- Korea Industrial Complex Corporation was formed in 1964, an early stage of Korean industrialization, and is currently the only government agency in Korea that specializes in construction, supply, management, and operation of major industrial complexes and support of businesses moving therein.
- In particular, since 2005, industrial complex cluster projects have been implemented in order to convert production-centered industrial complexes into innovation clusters, which are third-generation industrial complexes. In addition, intense efforts are being made to build a system of virtuous cycle between creativity and innovation and to create an industrial ecology enabling sustainable development, through harmony of innovation, entrepreneurship, and network.
- For this, corporations, universities, and research institutes network with one another, giving rise to a competitiveness network that supports R & D, commercialization, and marketing. At present, there are approximately 8,000 hardworking entrepreneurs and experts in 71 unique industrial clusters in Korea. However, quantitative growth alone is no longer the top priority. But, quantitative growth alone is no longer the top priority.
- Given the need to preserve the environment, give priority to the quality of life, and the aim for sustainable development, in order to realize the global agenda of low-carbon green growth, industrial complexes are being changed into resource-recycling networks with harmony between growth and the environment. Industrial symbiosis network for green eco-industrial parks (EIP) new and renewable energy, and energy-saving design criteria are now being implemented.
- At present, industrial complexes of Korea are developing into global competitiveness clusters unrestricted by limitations of national borders, and many emerging economies of the world are benchmarking them.
- Now, what does our future hold? We are about to enter the age of the creative economy where industry, technology, and culture, aided by great imagination, meet one another for a sustainable future. The creative economy where science and technology, ICT (information and communications technology), and contents converge to create new values and jobs founded on a world-class manufacturing base is becoming a new growth engine for the Korean economy.
- In fourth-generation industrial complexes of the future, diverse ideas will be freely exchanged, be converged with science and technology and ICT, and be formed as creative assets; that is, technology and knowledge. From a perspective of organic industrial ecology, Korea’s industrial clusters are in the process of making the industrial complex the stronghold of the creative economy.
- In the age of global recessions, labor and capital will no longer guarantee global competitiveness.
- Then, where is the answer? It will be found when creative ideas, cutting-edge technologies, and innovation meet and freely converge with one another.
- We have decided that the theme of the next Conference will be “Clusters in the Creative Economy: New Agenda for Corporations and Policymakers.”
- By exploring together how the creative economy is functioning and producing results in the Korean economy, all of you gathered here will have a meaningful time discussing and debating on future visions and innovation strategies to achieve greater competitiveness and share values.
- The Daegu Conference, an international conference to be held in November 2015 with the theme of competitiveness, will provide a unique opportunity to visit global corporations and industrial clusters near Daegu and explore Korean history and culture.
- In particular, the city of Daegu began with traditional textile industry but is now leading the future of Korea’s high-tech industry with world-class mobile devices and display products. It is also the birthplace of Samsung—Korea’s flagship company.
- I hope that all of you will share your own experiences and thoughts (with this theme) and spark new initiatives at the next conference.
- Wishing all of you excellent health and the best of luck until we meet again in Daegu, I will now show you a video clip introducing Daegu, the next venue. Thank you very much.