[The Editors' Verdict] It's the Manufacturing, Stupid!

Kim Tae-gi, Executive Committee Chair of the Job Solidarity, Former Professor of Economics at Dankook University

No matter how advanced the technology is, it only shines when commercialized. The internet became popular as high-performance personal computers were mass-produced, allowing consumers to purchase them at affordable prices. Technologies such as the metaverse, which refers to a virtual world where activities similar to the real world take place, and autonomous driving, where cars drive themselves, not only change the economy but also transform lifestyles. However, these too can only flourish when related devices or goods are created and distributed to enable convenient and safe use of the technology. The transition to the digital era has a dual nature: it destroys jobs but also creates new ones. Which effect is greater varies by country. If the manufacturing base is strong, new technologies have a greater ripple effect in creating jobs and expanding across industries. Manufacturing not only enables the commercialization of new technologies but also creates high value-added service jobs in research and development, design, product delivery, and after-sales service.

With the advent of the digital era, manufacturing was once neglected as a smokestack or declining industry. But it was soon realized that this was a misconception. As manufacturing weakened, high-wage, stable employment jobs decreased. Because products were imported from abroad, capital and jobs flowed overseas, and the trade deficit grew. If other countries stole domestic technology or blocked exports of certain goods, even national economic security was threatened. This was a problem experienced by the United States, the strongest digital technology country. In response, former President Barack Obama launched a plan to rebuild the manufacturing renaissance upon his inauguration in 2008. Even after the presidency changed to Donald Trump and then Joe Biden, policies to strengthen manufacturing were expanded. Germany also enhanced its competitiveness through the digitalization of manufacturing, with Chancellor Angela Merkel advocating the Fourth Industrial Revolution in 2013. Thanks to this, both countries experienced a job boom with historically low unemployment rates. In South Korea, however, as manufacturing weakened, jobs deteriorated. The government only spoke of strengthening manufacturing, but policies went in the opposite direction. President Moon Jae-in stated in 2017 that the government would create jobs and shook the manufacturing base through excessive reductions in working hours. On the 17th, President Moon said in a dialogue with foreign-invested companies that foreign direct investment in Korea increased thanks to manufacturing and ICT infrastructure. However, this was largely a side benefit as China strengthened its socialist line and confronted the U.S. and others, leading advanced countries to seek alternative investment destinations in Korea. Rather, major Korean manufacturing companies moved their investments en masse to the U.S. and other countries.

Presidential candidates emphasize job issues as a core pledge, like President Moon. However, their directions are completely different. Lee Jae-myung, the Democratic Party candidate, emphasizes public jobs as President Moon did and prioritizes service sector jobs over manufacturing jobs. On the other hand, Yoon Seok-youl emphasizes private sector jobs. To solve job problems, he proposes rational reforms of the minimum wage system and working hours system and resolving issues with strong labor unions. However, his recognition of the importance of manufacturing does not seem as clear as that of past U.S. presidents or German chancellors. Strengthening manufacturing is essential not only to solve job problems but also to enhance economic security. This is even more true for South Korea, where manufacturing is the core of the export-driven economy. Because key industries like semiconductors maintain global competitiveness, Korea has raised its international stature to the extent of receiving calls from U.S. presidents and has withstood China's THAAD retaliation and Japan's export restrictions. Jobs and economic security are directly linked to manufacturing.

Kim Tae-gi (Executive Director of the Job Solidarity, former Professor of Economics at Dankook University)

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