[Insight & Opinion] The Ecosystem Economy: Not a Choice, but a Survival Strategy

Urgent Need for Innovative Domestic Manufacturing Networks
Critical to Anchor People and the Ecosystem for Survival

"Why is Korea so slow? If you don't hurry, I will raise the tariff to 25%."

On January 26, U.S. President Donald Trump issued a sharp warning that sent Korea's industrial sector into crisis mode. In order to avoid a heavy tariff bomb, Korean companies accelerated their investment plans in the U.S. and rushed to construct factories. They were forced into a 'speed race for survival.' Now, one month later, the situation has changed rapidly, but concerns remain high. Following the U.S. Supreme Court's ruling invalidating reciprocal tariffs and President Trump's subsequent introduction of a new universal import tariff of 15%, along with orders for further investigations, Korean industries such as automobiles and semiconductors now face a new vortex of tariffs.

It is becoming increasingly difficult to chart a course for investments in the U.S. and corporate management. However, it is clear that the need to expand overseas investment, closely tied to tariff issues, has become urgent. The biggest problem is that, beneath the surface, a warning bell is sounding for the complete hollowing out of the roots of the Korean economy-so-called 'manufacturing hollowing-out.' As large corporations race across the Pacific to overcome tariff barriers, who will take responsibility for the fate of the small and medium-sized partner companies and the local economies left behind? In the face of this harsh question, the survival strategy Korea must cling to is the 'ecosystem economy.'

The ecosystem economy holds that a company's competitiveness does not come from individual achievements, but from the overall strength of an industrial community, intricately connected through components, equipment, materials, logistics, finance, and human resources. The reason why Samsung, Hyundai Motor, and LG have survived on the world stage is not due to their individual power alone. Behind them lies a structural foundation of partner companies with world-class skill levels and technological and financial networks.

Recently, large corporations and banks have joined with policy finance institutions to create massive support funds for partner companies-a move that cannot be dismissed as simple largesse. It is a highly strategic choice and a structural safety net to protect the core of the national industry. As investments in the U.S. grow, paradoxically, we must bind our domestic ecosystem even more tightly, and these actions reflect that necessity.

So what direction should policy take now? First, the 'strategic industry-partner company-finance' triangle must be reinforced like an iron wall. As President Trump pushes for accelerated overseas expansion, domestic partner companies are at risk of being isolated. What they need is not just loans, but supply chain stabilization funds and focused investments for smart facility upgrades. For large corporations' global expansion to succeed, the technological capabilities of their domestic partners-the very roots-must rise in tandem.

Second, an innovative 'domestic manufacturing network' must be built. If we cannot prevent advanced factories from moving abroad, we must at least retain key 'mother factories' on our own soil to control them. Regional joint equipment centers should be established, and joint warehouses and AI-based smart logistics hubs that small and medium-sized partners can utilize must also be expanded. The ecosystem should be reorganized so that partner companies can become 'independent strong SMEs,' able to secure autonomous production capabilities and directly supply parts to the global market, undisturbed by the relocation of large corporations.

Finally, we must bet everything on a 'strategy to bind people to the ecosystem.' Jobs are protected not by regulation, but by competitiveness. Even if companies relocate abroad, what remains in this country is the technological expertise and talent pool accumulated over decades. In this era of seismic change, as AI and robotics transform manufacturing, the retraining of existing workers and the creation of regionally specialized talent platforms are urgent national tasks. Large corporations and partners need to operate joint talent development programs. Only when people are deeply rooted in the industrial ecosystem can jobs be preserved, rather than evaporate.

It is nearly impossible to rebuild a collapsed industrial ecosystem. What we must protect is not a single company's factory, but the 'vast forest of manufacturing' that our economy has cultivated with blood and sweat over the past 50 years.

Wonkyung Cho, Professor of Economics at Sejong University

This content was produced with the assistance of AI translation services.