Gwangju Chamber of Commerce and Employers Federation Speak with One Voice on Economic Revitalization Measures
Region Ranks Among the Lowest Nationwide in Key Economic Indicators
Accelerating Outflow of Young People Seeking Jobs
Urgent Need to Shift from Manufacturing and Agriculture to New Industries like AI
Government Support Needed to Implement Effective Policies
There is a growing call within the local business community to fundamentally restructure the fragile economic ecosystem of Gwangju and Jeonnam. This reflects hopes that, during the presidential election season, effective policies to revitalize the region’s economy will be adopted by the government and political circles.
The Gwangju Chamber of Commerce and Industry and the Gwangju Employers Federation recently announced key policy pledges reflecting the voices of the local business community ahead of the 21st presidential election scheduled for June 3.
Although there are minor differences in some details, both organizations have emphasized the urgent need for the region to focus on an 'AI-centered industry,' 'expanded support for the renewable energy sector,' and 'attracting R&D and fostering skilled professionals.'
This is interpreted as a call to transform the region’s weak economic infrastructure?where only a handful of major corporations such as Kia Motors, Kumho Tire, and Samsung Electronics are present?by fostering advanced new industries.
It is a fact that both Gwangju and Jeonnam remain at the bottom nationwide in various economic indicators. The perception that these are 'difficult places to make a living' has been entrenched for quite some time.
In reality, Gwangju has focused almost exclusively on manufacturing sectors?such as automobiles (Kia Gwangju Plant), optoelectronics (LG Innotek, etc.), and white goods like refrigerators (Samsung Electronics)?from the 1960s through the early 2000s.
However, due to the nature of manufacturing, the region has been highly vulnerable to global economic downturns, resulting in poor marks for stability. Furthermore, Korea’s manufacturing sector has long been in decline, losing ground to Southeast Asian countries like Vietnam and Thailand, where labor costs are lower.
As of 2023, Gwangju Metropolitan City’s nominal Gross Regional Domestic Product (GRDP) was estimated at about 51.9 trillion won. This ranks among the lowest of the 17 metropolitan cities and provinces nationwide, placing just above Jeju Special Self-Governing Province and Sejong Special Self-Governing City.
The decline of the region’s industrial structure has been directly linked to a loss of job competitiveness.
Due to a shortage of jobs, the outflow of young people in their 20s and 30s has been accelerating. Last year alone, approximately 8,000 young people left the region, and in the first quarter of this year, nearly 5,000 more departed.
Jeonnam faces a similar situation. Traditionally, Jeonnam’s economy has been concentrated in primary industries such as agriculture and fisheries, as well as in petrochemicals and shipbuilding.
However, amid the growth of neighboring countries like China, industries such as shipbuilding and chemicals are now facing crises.
Moreover, the concentration in specific industries has led to failures in nurturing new industries. In the current era of carbon neutrality and eco-friendly transformation, this has resulted in a weakening of the region’s traditional industrial competitiveness.
The lack of manufacturing, IT, and knowledge-based industries?similarly to Gwangju?has led to the outflow of highly educated young people from Jeonnam. This has caused another side effect: a mismatch between jobs and job seekers, which has had a serious impact on youth employment rates in the region.
In Jeonnam, as of the first quarter of this year, the youth employment rate (ages 15?29) stood at 40.5%, falling short of the national average of 44.5%. The situation where there are no young people to work and companies struggle to hire continues to repeat itself.
On top of this, the region faces one of the highest rates of aging in the country, with more than 25% of the population aged 65 or older. This has further accelerated the collapse of the local consumption base and the shortage of labor.
This is why both Gwangju and Jeonnam urgently need to transition to and foster new industries such as AI, renewable energy, bio, and information and communication technology (ICT). Since these industries require massive investments and budgets, it is absolutely necessary for government-level policy support to be implemented at this time.
Han Sangwon, chairman of the Gwangju Chamber of Commerce and Industry, stated, "For Gwangju, pending issues such as the relocation of the military airport must be resolved quickly, and at the same time, we need to prepare for future industries based on future technologies, such as attracting AI industries, data centers, and fostering the semiconductor industry. Various job expansion policies, such as the Gwangju-type jobs model represented by GGM, must be operated more stably," he said. "We need to institutionalize solutions to rural and farmer income issues so that young people can settle in rural areas. The Farmland Act and other regulations should be revised to further develop the renewable energy industry in concrete terms. Support from the government and political circles is needed," he emphasized.
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