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SUMMARY
A Study on New Industrial Location Policy at the Fourth Industrial Revolution Era
Chang Cheol Soon, Moon Jeong Ho, Ryu Seung Han, Chang Eun Gyo, Lee Syung Uk, Jeong Wooseong, Cho Sungchul, You Hyun Ah
Key words: The Forth Industrial Revolution, Polarize Location Pattern, Newly Emerging Industry, Sharable Industrial Space, Small-sized Industrial Complex, Vertical Factory
The fourth industrial revolution, introduced in the 2016 World Economic Forum (Davos, Switzerland), has sparked intense debate about what it really means and how to respond. However, many scholars have come to an agreement that the fourth industrial revolution has already begun and will continue to have enormous impacts on various dimensions of human-social life. On one hand, some scholars argue that the fourth industrial revolution, characterized by hyper-connectivity and hyper-intelligence, may accelerate the urban shift of industrial activities by increasing the labor demand of skilled workers, facilitating the use of cyber-physical systems, and making mass-customization and personalization work. On the other hand, some predict that the fourth industrial revolution will polarize locational patterns of
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industrial activities, both concentrating emerging high-tech industries into urban centers and dispersing traditional industries– i.e., automobiles, electronics, shipbuilding, metal, chemistry–into peripheral regions.
This research examines various characteristics of newly emerging industries to understand the recent changes in locational patterns of industrial activities in the era of the fourth industrial revolution. The spatial scope of this study covers the whole country, but the unit of analysis is mainly located at the firm level. This research employs both quantitative and qualitative types of research methodologies, including country-level case studies, field research, as well as locational and network analysis. To do this, firm-level data were collected in collaboration with the Korea Enterprise Data (KED), a leading supplier of business credit reports on Korean businesses.
For the analytic purpose, we categorize newly emerging industries in the era of the fourth industrial revolution into five sectors, that is, internet of things, 3D printing, robotics and drone, VR(Virtual Reality) and AR(Augmented Reality), Artificial Intelligence and Big Data. Results of analyses show that the half of newly emerging industries is composed of robotics and drone firms. The location of emerging industries tends to be concentrated on the Seoul metropolitan area(approximately 68.8%). About 61.1% of the whole sample is found to lease office and production space. Outside the Seoul metropolitan area, spatial agglomerations of newly emerging industries are found only in the sector of robotics and drone. The largest volume of the fourth industrial revolution firms is mainly concentrated on Gangnam Teheran-ro, Gasan-Guro Digital Complex, Pangyo Techno Valley, and Daeduck Research Complex. The
SUMMARY ․ 139 decision to locate firms in Pangyo Techno Valley tends to be correlated with the importance of “low land price”, while the decision to locate in Gangnam is not strongly associated with the importance of “low land price”.
This study further conducts a series of network analyses to examine the forward-backward linkage effects of newly emerging industries. As a result, firms in newly emerging industries are found to be strongly connected with suppliers in “system software development and provision” industry.
Furthermore, trading partners of emerging industries are found to be largely concentrated in Gangnam area in Seoul (256 suppliers and customers).
However, trade networks of robotics firms tend to be dispersed around the Gyeongsang province.
Results of firm survey show that travel accessibility and the pool of skilled labor are the important locational factors for newly emerging industries. It is also found that 78.7% of firms in emerging industries are found to establish their businesses from their current location without switching firm locations.
The majority of firm survey respondents report that they have had difficulties solving labor market mismatch due to lack of high-skilled workers. Survey results also suggest that firms in emerging industries prefer direct tax benefits to other types of policy subsidies.
In conclusion, this study argues that in order to nurture newly emerging industries in the era of the fourth industrial revolution, the provision of industrial space in urban centers needs to be expanded. Specifically, the study suggests various types of policy strategies, ranging from the provision of rental or sharable industrial space to the development of small-sized industrial
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complexes and vertical factories. For the sake of traditional industries, this study suggests that locational strategies to nurture new firm formation should be developed according to the growth stages of industries. Further, this study also highlights the importance of smart factories to enhance the productivity of traditional industries.
