Structural Changes in Manufacturing and Directions of Stuructural Adjustments of Industries in the Capital Region

Abstract

The aims of this paper are to analyse structural changes of manufacturing in the 1980s and to discuss directions of structural adjustments of industries in the Capital Region of Korea in the era of internationalization. Three steps were taken in the analysis of structural changes in manufacturing: 1) factor analysis using structural variables of SIC 3 digit level of manufacturing for identification of major factors of structural changes in manufacturing of Korea; 2) cluster analysis of SIC 3 digit level in manufacturing for classification of industrial types with relation to the structural changes; and 3) analysis of changes in the composition of the industrial types in the Capital Region. Major factors of the structural changes in manufacturing of Korea are: 1) high value added and investment; 2) capital intensiveness: 3) industrial maturity; 4) labor intensive subcontracting; and 5)growth of employment. Oil refining is the only industry that is related to the factor of high value added and investment, reflecting that most of the other manufacturing industries have not changed enough toward the trend of high value added and investment and have shown relative structural deteriorations. Even the electric machinery and electronics industries, which showed rapid growth and related directly to the factor of the growth of employment, are not related to the factor of the high value added and investment