Eight New Industries Emerge as Export Growth Engines

The eight new industries related to the 4th Industrial Revolution, such as robots and electric vehicles, are emerging as new export growth engines of Korea, while contributing to an increase in jobs.
According to the report, “Trend Analysis of Job Creation in the Eight Emerging Export Industries and Trade with China” published by the Institute for International Trade (IIT) of the Korea International Trade Association (KITA), exports of the eight emerging industries in Korea have increased from an average of US$47.8 billion in 2014 to US$73.6 billion in 2017. The share of total exports rose from 8.3% to 12.8%. In particular, exports of the eight emerging industries increased by 27.7 percent last year, creating 415,000 jobs.
The figures for employment inducement per US$ million of exports also increased considerably from 5.16 persons in 2014 to 5.63 persons in 2017. The largest employment inducement figure was recorded in the next-generation semiconductor sector, while the robot industry was found most effective in inducing employment. The employment inducement figures were the largest in the next-generation semiconductor sector (188,000), followed by nextgeneration display (8.0 million), new energy (4.5 million) and bio-health (4.3 million) in 2017. Inducement per US$ million of exports varied relatively largely ranging from 10.7 in the robot sector, 9.7 for electric cars, 9.4 for bio-health, and 8.7 for nextgeneration display in 2017.
Last year, exports of the new industries have shown outstanding results in all the eight sectors and major regions of the world except Japan.
By sectors, exports of electric vehicles (186.8%), aerospace (37.3%), robots (36.2%), next-generation displays (34.4%), next-generation semiconductors (27.1%), new energy products (23.7%), high-tech materials (15.2%), and bio-health goods (13.7%) have grown in more than double-digit figures. Among the developed countries, on the other hand, the USA (29.2%), the EU (34.6%), and Vietnam (87.8%), which are emerging as overseas production bases for Korean companies among rising countries, have increased their exports to ASEAN nations (48.5%) and India.
Exports of the eight new industries to China grew at a CAGR of 5.2% from US$ 17.4 billion in 2014 to US$ 20.3 billion in 2017. Revenues for the same period increased by an annual average of 24.6%, from US$ 3.9 billion to US$ 7.5 billion. The increase in imports outstripped the growth in exports. This reflects China’s relentless pursuit in the new industries.
Exports of new industries to China amounted to 27.6% in 2017, which was 2.8% higher compared to exports of all sectors to China (24.8%). In particular, the dependence on exports of next-generation displays (37.6%), advanced materials (36.0%) and nextgeneration semiconductors (29.8%) to China turned higher than 30%, underscoring an urgent need for market diversification.
“Nurturing the new industries requires a management strategy aimed at overseas markets that can manifest the scale-oriented economy from the earliest stages,” said Moon Byung-gi, a researcher at the IIT of KITA. “In order for the new industry to continue to grow and create employment, It is necessary to establish a system for effective cooperation and division of labor such as joint investment and technical cooperation between Korea and China along with the development of composite materials, parts and products matching with the trend of the 4th Industrial Revolution.”