[Asia Exclusive] "Industrial Complexes as the Center of Local Economy, Job Creation, and Investment"

Kim Jeonghwan, Chairman of Korea Industrial Complex Corporation
Initiates Organizational Restructuring to Revitalize Regional Investment
Focus on Structural Advancement and Workforce Development
Regulations Should Be Relaxed If No Issues Arise
Promotes Smart Factory Transition to Prevent Youth Outflow
Virtuous Cycle of Talent Development, Business Growth, and Economic Progress

Kim Jeonghwan, President of the Korea Industrial Complex Corporation, is being interviewed by Asia Economy. / Photo by Mun Honam munonam@

President Yoon Suk-yeol visited industrial complexes three times during his transition period. He visited Gumi Industrial Complex in Gumi-si, Gyeongbuk, Daebul Industrial Complex in Yeongam-gun, Jeonnam, and Changwon Industrial Complex in Changwon-si, Gyeongnam, in that order. While the messages at each industrial complex differed according to their characteristics, the common theme was ultimately ‘revitalizing the regional economy.’ The idea was to attract good companies to the regions and remove regulations to enable investment. The reason President Yoon visited industrial complexes before his inauguration and conveyed this message is also evidence that industrial complexes have been the center of regional economic development. It can also be interpreted as meaning that industrial complexes should play a role in removing regulations and creating jobs through investment in the regions in the future.

This is also a task given to Kim Jeong-hwan, Chairman of the Korea Industrial Complex Corporation (KICOX). After accompanying the president on his three visits to industrial complexes, Chairman Kim hurried to establish strategies to align with the new government’s policy direction. He emphasized, "Since industrial complexes have companies and jobs, they are the center of regional investment," adding, "The Industrial Complex Corporation must take a leading role in creating an innovation ecosystem and investment ecosystem for companies."

To this end, Chairman Kim is preparing an organizational restructuring to activate regional investment. The intention is to create an investment support system that can continuously produce effects rather than focusing on immediate results. He explained, "Through organizational restructuring, from July 1, we plan to establish a system where regional headquarters jointly support regional investment with local governments," adding, "Dedicated staff will be assigned to regional headquarters, and in cooperation with local governments, they will identify and resolve investment-related difficulties or regulations in the region." In addition, KICOX is preparing various strategies to revitalize regional investment. We met Chairman Kim at the KICOX Seoul Regional Headquarters in Guro-gu, Seoul, to hear detailed stories.

Kim Jeonghwan, President of the Korea Industrial Complex Corporation, is being interviewed by Asia Economy. / Photo by Mun Honam munonam@

-Regional balanced development is being emphasized more under the new government. What role should industrial complexes play?

▲Issues such as regional balanced development and strengthening regional self-sustainability are emerging. Considering that industrial complexes are hubs of industry and jobs in most regions, innovation in industrial complexes is very significant. The role of industrial complexes is to attract many companies to the region and enable these companies to invest. Our business is to work with the government to provide more support measures and to ensure companies can carry out production activities smoothly. We need to focus on supporting structural advancement and workforce development.

Especially when large corporations advance their core businesses such as future vehicles or semiconductors, small and medium-sized partner companies follow. Naturally, investment occurs in regional industrial complexes. When large corporations lead, business opportunities arise for small and medium-sized enterprises. We must provide infrastructure that enables these companies to innovate. Various educational infrastructures are also part of innovation infrastructure. Such infrastructure should be established in regional industrial complexes outside the metropolitan area.

-Bold deregulation is necessary to revive the regional economy.

▲For companies to come to the regions and create a more advanced ecosystem than before, regulations must be resolved. Regulations differ by region and have reasons for their existence. Each industrial complex faces different issues related to this. However, I have thought a lot about ensuring regulations do not hinder economic activities. It is difficult to remove all regulations entirely, but if loosening them does not cause overload or problems in the overall industrial complex structure, it is appropriate to do so. For example, in Daebul Industrial Complex, where shipbuilding companies are located, even though the shipbuilding market is improving, there are still many difficulties. Many companies have said that although they want to produce, there is a lack of workers, so foreigners should be allowed to enter smoothly. Recently, the Ministry of Justice announced plans to expand this, but the field still feels it is insufficient.

-One of the government’s emphases is ‘youth.’ However, industrial complexes are not perceived as attractive workplaces for young talent.

▲When the government creates youth employment measures, it listens a lot to companies in regional industrial complexes. From these discussions, there is a problem of young people from the region continuously leaving. The fact that young workers do not come is a common problem faced by regional industrial complexes. To keep youth in the region, good jobs must be available. We have been promoting projects to convert to smart factories so that people can work properly in the region. Places with well-established smart factories have youth workers. Also, youth should be able to learn and grow locally. To this end, we will create a talent development system in industrial complexes. A virtuous cycle should be established where talent is nurtured, companies grow, and the regional economy develops as these growing companies gather. We are also considering cultural support measures. Industrial complexes must be reborn as workplaces, places of enjoyment, and rest areas that attract youth.

-Is there anything particularly emphasized in industrial complex policies with the change of administration?

▲We need to create field organizations to effectively implement government policies. We will reorganize the organization to align with the new government’s major directions such as investment and youth policies. However, from the perspective of industrial complexes, the directions of the previous and current governments are not significantly different. The directions such as regional balanced development, digital transformation, eco-friendly policies through carbon neutrality, and industrial complexes attractive to youth are similar; the difference lies in the focus. Even if ESG (environment, social, governance) and carbon neutrality proceed at a pace suitable for manufacturing realities, the direction will not change. We plan to proceed with detailed implementation this year.

Kim Jeonghwan, President of the Korea Industrial Complex Corporation, is being interviewed by Asia Economy. Photo by Moon Honam munonam@

-How are you working to spread ESG in industrial complexes?

▲For small and medium-sized enterprises that make up most of the industrial complexes, public support is needed to raise awareness of ESG necessity and enhance practical capabilities. KICOX’s ESG support projects are comprehensively promoted through specialized education, consulting, network forums, and research and development (R&D) to spread ESG management awareness and improve response capabilities of tenant companies. Starting this year, we have launched ESG-type R&D projects as new initiatives to actively support the introduction of ESG management by companies in industrial complexes. We are currently recruiting participating companies from tenant companies in 10 industrial complexes nationwide where the Industrial Complex Grand Renovation project is underway. Next year, we plan to secure additional budgets to expand support targets further.

-What measures are in place to reduce industrial site accidents?

▲We analyze the safety status of industrial complexes and derive tasks and countermeasures tailored to each complex’s characteristics. A significant portion of industrial complex accidents occur in aged complexes over 20 years old, and the patterns differ by industry characteristics. For example, in Ulsan and Yeosu complexes, where petrochemical industries are concentrated, we have established an integrated safety management system for petrochemical complexes to ensure pipeline safety and installed fire detection and gas leak alarms. In complexes densely populated by small and medium-sized enterprises with limited capacity for safety management, efforts focus on preventing accidents at individual workplace levels. We plan to continue expanding support for safety supplies, risk factor diagnosis, and consulting for improvements.

-Two years have passed since your inauguration. What are your memorable achievements and future goals?

▲The first thing that comes to mind is visiting the Gumi National Industrial Complex immediately after my inauguration in March 2020, when anxiety was increasing due to COVID-19. By visiting regional sites directly, we assessed the damage to companies and established a joint emergency response headquarters with the government to focus on resolving difficulties faced by affected companies. I also remember supporting tenant companies that had difficulties storing export manufacturing equipment due to shipment delays caused by COVID-19 by allowing free storage on public land, which later enabled successful exports.

I plan to continue visiting industrial sites frequently. By directly seeing and hearing companies’ difficulties and communicating with local governments and related organizations to find solutions together, I aim to provide practical help for resolving difficulties and growth. I will also work hard to discover and resolve regulations that hinder corporate activities. Leveraging the characteristics of field-based contact institutions, I will strengthen the role as a platform for communication and collaboration among various support organizations. It is also important to radically improve and innovate industrial complexes, which are the foundation for companies. I want to contribute to industrial complexes becoming bases for future new industries and sustainable spaces that attract youth. I will strive for industrial complexes to transform from past-type complexes that led 50 years of economic growth into innovative spaces that will lead the next 50 years.

Kim Jeong-hwan, Chairman of the Korea Industrial Complex Corporation,

▲Graduated from Paichai High School, Seoul ▲Bachelor’s in Economics, Seoul National University ▲Master’s and Ph.D. in Economics, University of Missouri, USA ▲33rd Administrative Examination ▲1990 Administrative Officer, Ministry of Trade, Industry and Energy ▲2003 Researcher, APEC Energy Research Center ▲2006 Director, Coal Industry Division, Ministry of Trade, Industry and Energy ▲2009 Administrative Officer, Emergency Economic Situation Office, Presidential Office ▲2011 Planning and Coordination Officer, Small and Medium Business Administration ▲2018 Director General, Planning and Coordination Office, Ministry of Trade, Industry and Energy ▲2020~ 11th Chairman, Korea Industrial Complex Corporation

Interview by = Kim Min-jin, Head of SME and Venture Department enter@asiae.co.kr

Summary by = Reporter Kim Cheol-hyun kch@asiae.co.kr