A view of the Changwon National Industrial Complex. (Photo: Gyeongsangnam-do)

Gyeongsangnam-do Gov. Kim Kyung-soo.

The Gyeongsangnam-do provincial government is accelerating manufacturing innovation by cultivating the construction of smart factories to restore the crisis-hit economy.

The provincial government on Aug. 30 announced a manufacturing industry innovation strategy to build 2,000 smart factories by 2022. The move follows the provincial government’s diagnosis that the manufacturing industry is in crisis.

The manufacturing industry of the province grew 7.1 percent in 2010, but it declined to negative growth rates – minus 1.96 percent in 2012 and mines 3.78 percent in 2016. In order to strengthen the competitiveness of the manufacturing industry, the provincial government decided to focus on smart factories designed to enhance productivity by employing ICT in the manufacturing process.

The strategy calls for 210 billion won starting in the second half of the year – 104 billion won from state coffers, 46.4 billion won from the provincial government and 59.6 billion won from private corporations – to build 500 smart factories each year.

In order to accelerate the spread of smart factories, the provincial government decided to provide additional support in provincial government costs to lower the corporate burden from 50 percent to 30 percent. Beneficiary companies will shoulder only 30 percent of total smart factory buildup costs. Companies outfitted with smart factory upgrade technologies will receive a maximum 210 million won in financial support.

The provincial government will raise 20 billion in a fund for smart factory construction by next year. It plans to overhaul a regime to support smart factory construction. Gyeongsangnam-do will expand and operate a regional consultative body to establish overall policies ranging from smart factory construction to financial support.

The provincial government plans to develop new models the way large- and small-companies can jointly build smart factories. Large- and small-sized companies, which belong to the same business classification will join force to secure a 30 percent burden in their own costs or 30 million won.

Gyeongsangnam-do Gov. Kim Kyung-soo said he will meet with CEOs of large-sized companies to consult on ways of promoting shared growth since cooperation not only from central and local governments but also from large-sized companies is essential to spread smart factories to SMEs.

Gyeongsangnam-do Vice Gov. Moon Seung-euk said no time will be wasted to recover the regional economy, saying that the operation rate of the Changwon State Industrial Complex stands at more than 80 percent and the plants at the Sacheon Agro-Industry Complex are still in operation.

In an interview with a vernacular business daily, Gyeongsangnam-do Vice Gov. Moon said even though he handled industry policy jobs for almost 30 years since he was appointed as a central government official, it is the first time he has assumed a vice governorship of a provincial government.

He has been closely watching on Gyeongsangnam-do, a center of the Korean manufacturing industry, with special interest as he toured such industrial estates as the Masan Free Export Zone and Changwon State Industrial Complex.

He said he will explore measures to turn around the sagging Gyeongsangnam-do economy and restore its place as Korea’s No. 1 manufacturing center.

Deputy Minister Moon, born in Seoul in 1965, passed the 33rd senior administrative examination and held such government positions as director in charge of investment policy, director general for high potential enterprise policy and director general for system industry at the MOTIE and vice minister of the Defense Acquisition and Program Administration (DAPA). He is now charged with resuscitating the province’s four national industrial complexes.