Geoscience Reference
In-Depth Information
incremental technology innovations led to the rapid advancement of Korea's
shipbuilding industry.
Encouraged with government policies that supported the goal to produce larger
ships and in part because of rapidly expanding global demand, several large
shipbuilding docks were constructed at multiple sites in the Southeast. The Korean
government also provided focused political, financial, educational and research
support including government and industry financed shipbuilding and shipping
related ocean studies. It also facilitated the formation of the Association of a Korean
Shipbuilders public-private partnership (PPP) to provide promotional information
and services for the industry. The industry grew by 30 % every year between 1976
and 1985 and employment tripled. Due to oil supply shocks and other economic
factors shipbuilding faced a significant declining international market. While
Korean shipbuilders suffered along with others this was temporary; the big three
chaebols
later enjoyed considerable success from their earlier aggressive invest-
ment and marketing. Thus in the late 1980s and 1990s Korea's shipbuilding
industry and cluster became the largest in the world. During this period the three
chaebo
ls remained dominant and stabilized their areas of specialization and to some
extent expanded the scale of production; and diversified their product mix, and
managerial and technological knowhow. At the same time Hyundai, Daewoo and
Samsung developed supply chain linkages with smaller companies and/or helped
create spinoffs often led by entrepreneurial management.
In the late 1990s the Asian economic crisis became a major threat and obstacle to
not only growth but also the maintenance of the superior position of Korea's
shipbuilding industry. Restructuring occurred resulting in the case of Daewoo
becoming independent and forcing less competitive companies out and creating
new, medium sized companies often led by innovative entrepreneurs and thus more
competitive shipbuilders (e.g., STX Group) and component producers. The industry
emerged once again from this short period of decline as a dominant playing in the
global economy. Restructuring motivated by the Asian economic crisis was the
event that led to restructuring and increased competiveness.
In conclusion, it may be claimed that the Korea Shipbuilding cluster was not
created independent from its historical context or even by historical accident as it
evolved out of a previous existing traditional non-steel ship and boat building
industry upon which Japanese investors amplified the scale. Korean government
leadership in collaboration with a few large private companies propelled the
development of the ship building cluster with a strong commitment to the growth
of this industry in the early 1970s. Entrepreneurial and innovative leadership in the
1970s and 1980s took advantage of the country's supportive policies and the global
environment by investing aggressively in the development of the industry.
The cluster dynamics background described above along with the life-cycle
model dimensions described above are now used to examine the Korean shipbuild-
ing cluster and to determine its current life cycle. The first dimension is network
linkages.
