![[Abandoned Industrial Complex]⑩ "The Solution to Unsold Units is Fostering Key Industries and Supporting Resident Companies"](https://cphoto.asiae.co.kr/listimglink/1/2024111508444411302_1731627884.jpg)
Experts have unanimously pointed out that the chronic unsold inventory in local industrial complexes is due to overly complacent demand surveys, despite the fact that companies do not move to the provinces because of a lack of workforce. It has been argued that to solve the persistent problem of unsold industrial complexes, it is necessary to foster key industries and provide full support to tenant companies.
On the 15th, experts interviewed by Asia Economy on the topic of unsold industrial complexes all cited workforce issues. Professor Kim Sang-bong of Hansung University’s Department of Economics responded to the question, “Why do local industrial complexes suffer from unsold inventory because they fail to attract tenant companies?” by saying, “The problem is that there is no merit at all.” Professor Kim added, “Young people prefer to go to Seoul rather than work in the provinces,” and questioned, “In such a situation, would large companies go to industrial complexes in the provinces?”
Senior Research Fellow Kang Ho-je of the Korea Research Institute for Human Settlements also pointed out the manpower shortage caused by the concentration in the metropolitan area. Kang said, “It is less a problem of industrial complex policy and more an effect of people concentrating in the metropolitan area,” diagnosing, “Most of the industries that sustain South Korea’s economy are concentrated in Seoul and the metropolitan area, while pollutant-emitting industries move to local industrial complexes.” He added, “Because of this structure, companies aiming to create high added value by utilizing skilled manpower are even less likely to move to the provinces.”
The stance of tenant companies in industrial complexes is similar. A representative of the Korea Industrial Complex Management Association (Sankyeongyeon), who requested anonymity, said about unsold inventory, “Companies located in the metropolitan area also need larger spaces to expand,” but confessed, “Companies find it difficult to relocate easily due to concerns about manpower shortages after moving to the provinces.” He continued, “The negative image of industrial complexes and production sites has persisted for too long,” lamenting, “The biggest problem is that young people feel ashamed to work in these spaces.”
Although the attractiveness of local industrial complexes is declining due to a lack of people, there were also repeated criticisms that demand surveys failed to reflect this. Research Fellow Choi Jun-seok of the Korea Institute for Industrial Economics and Trade said, “Basically, if there is no manufacturing demand in a region, unsold inventory will inevitably occur when an industrial complex is developed,” criticizing, “Local governments assume that once an industrial complex is developed, companies will fill it automatically, but that is not the reality.”
A representative from the Korea Economic Research Institute also said, “The biggest difference between national industrial complexes and local industrial complexes is the prior preparation regarding which companies will fill them,” and added, “I think the cause is local governments competitively constructing them.” He further explained, “Complacent plans that assume our region will do well because existing industrial complexes have succeeded are the cause of the proliferation.”
Research Fellow Kang also analyzed, “Although the unsold rate of industrial complexes is statistically acceptable, it is a very big problem from the regional perspective,” and said, “There are cases where demand surveys are conducted in a slapdash manner.” He explained that overly simplistic surveys, such as assuming industrial land will increase at the same rate as in the past decade, negatively affected unsold inventory.
Experts proposed various strategies to restore the competitiveness of local industrial complexes and resolve unsold inventory. Research Fellow Choi emphasized, “Local areas lack resources to nurture all industries,” and stressed, “It is necessary to focus on fostering one or two key industries.” He suggested that local governments should designate core industries and develop industrial complexes accordingly, like Geochang County, which achieved results by focusing solely on fostering the elevator industry.
Professor Kim said, “Policies that reduce various costs depending on the judgment are needed,” adding, “If newly built complexes are perceived as more expensive than others, companies have no reason to move in.” He also argued, “It is not enough to just do industrial complex policies well; fundamentally, there must be many people living in the provinces.”
Most experts gave positive evaluations of the cultural industrial complex policy recently promoted by the government. A representative of Sankyeongyeon said, “It will not be solved in a short time, but I think the direction is right,” and added, “The government should plan policies with a long-term perspective.” Research Fellow Choi also evaluated, “It can have a positive impact on industrial complexes and nearby areas,” and said, “I think it is one of the efforts to create industrial complexes where young people want to work and play.” However, Professor Kim emphasized the need for a three-dimensional and sustainable industrial complex, saying, “Just creating beautiful streets does not attract young people or companies.”
This project was supported by the Press Promotion Fund funded by government advertising fees.
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