This research aims to resolve the lack of researches to review the applicability of industrial cluster to the kaeseong Industrial complex and assess the possibility and necessity of clustering for the purpose of encouraging follow-up studies on this s...
This research aims to resolve the lack of researches to review the applicability of industrial cluster to the kaeseong Industrial complex and assess the possibility and necessity of clustering for the purpose of encouraging follow-up studies on this subject. With this intent, this work devoted much of its contents to compare and contrast several case studies regarding to the constructions of industrial clusters with that of kaeseong Industrial complex. It also dedicated much effort to discuss both economic and political senses of clustering based on distinctive features of the kaeseong industrial complex.
The kaeseong Industrial Complex is the special economic zone in which both South and North Korea participate. From the economic perspective, the kaeseong Industrial Complex serves as a challenge toward building a new production base of South Korea. At the same time, it serves as an advanced step toward reforming and opening of North Korea. In addition to economic development, the fact that the construction of the kaeseong Industrial complex has made the relocation of critical military base possible earns positive reviews in a political sense. It also has provided the opportunity to exchange cultures of both sides and cooperate each other.
There are still, however, many issues to be resolved and complemented further even though apparent success seems to be shared among the parties. The management and operating system for the kaeseong Industrial Complex is tremendously complicated because North Korean government has the authority to make relevant rules and regulate the production base. For instance, the advantage of using experienced and skilled labors with low cost previously constituted the main competitiveness of the kaeseong Industrial Complex, but now it has become less sustainable by occasional disruptions from the government sides. These government-driven factors have served as crucial obstacles for further development of the kaeseong Industrial Complex and aggravated financial conditions of the participating South Korean companies.
To resolve these problems and draw more productive and effective solutions, a new approach which is called 'industrial cluster' has been suggested and implemented on many sides. Industrial cluster focuses on the cooperation among participating companies within the cluster and the building information and knowledge based network among them. It holds that the knowledge and information platform of the cluster can enhance the competitiveness of the related industry much better and create some positive synergy.
To come up with appropriate and appliable measures for the kaeseong Industrial Complex, this study has dealt with a variety of issues on the subject. It covers the issues of geographical conditionality, labour supply and demand, tax benefits for the investments in cluster sites, industrial-educational cooperation, tools for supporting the management and operation of companies which consist of the industrial cluster, types and features of financial aids as well as the availability of them, and the political environment surrounding the kaeseong Industrial Complex.
According to the facts conducted in this study, this paper has drawn four major implications: infrastructure for supporting the participants, information and knowledge based network, industrial-educational cooperating system, and financial aids. Lastly, it also emphasizes the gravity of executional issues. The procedures for execution should be selected and coordinated not only by economic points of view but also by political issues surrounding them.
This study suggests the followings; First, it reconfirms the economic value added of the kaeseong Industrial Complex. The kaeseong Industrial Complex will function as a sound infrastructure for the economic development and nourish many local businesses with competitiveness after Korean unification. Second, it has reviewed the political implications of the kaeseong Industrial Complex. The application of industrial clustering to the kaeseong Industrial Complex requires political preconditions such as the settlements of nuclear issues, inter-Korean relations, and North Korea - US relations. The results of these issues and the building procedures for the kaeseong Industrial Complex are closely inter-related. Most of all, whether the application of clustering to the kaeseong Industrial Complex will succeed depends on the availability of political understanding and the degree of agreement from the relevant parties. Third, this study expects itself to play a pivotal role in encouraging further follow-up researches on the related subjects and to accomplish its effectiveness as a preceeding research.
In conclusion, even though this work may be humble, I hope that it could be the foundation for following researches and help the scarcity of precedent study to be mitigated.