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specific industry with a competitive power. It is regarded that an industry that has a
best location in the country is the one that has the highest growth potential in a
local point of view. This is because an industry can achieve better economic
performance when it is located in a best place in terms of natural and innovative
resources. A strategic industry could lead other regional industries in this aspect.
2.2.2 Goals of Selecting Strategic Industries
Three goals are frequently cited in selecting strategic industries (Lee 2003). First
goal is enhancement of industrial structure and strengthening of national com-
petitive power.
Since the 1990s city and region began to play a more important role than that of
a nation in regard to economic activity in the process of internationalization of the
economy and localization in political and economic affairs. As a result of this, a
city and region appear as a unit of competition, and enhancement of regional
competitive power is treated on an equal basis with national competitive power.
Second goal is preparation of an economic base for knowledge-based industries
and regional innovation clusters. Since knowledge-based or innovation-oriented
industries grow more quickly than others, they should be a driving force in a
regional economy in order to gain advantage in industrial structure. Therefore, it is
desirable to consider comprehensive developmental elements and location factors
when selecting strategic industries for a certain region and to prepare an innovative
environment for the chosen strategic industries.
Third goal is formation of industrial structure and organization that lead to
balanced and integrated development. Innovation, balance, participation, and
networking are being stressed by current central government. Unbalanced devel-
opment policies, in which large firms, capital region and manufacturing industries
are major forces, are being abandoned by the current Korean government.
In this new localization era, large and medium-sized firms, capital region, and
local areas are treated equally and balanced and sustainable development strategies
are regarded as key factors by the current Korean government. A 5-year devel-
opment plan for industrial clustering and activation has been initiated and a
presidential committee for national balanced development was created to make
industrial clustering successful.
3 Criteria and Method of Strategic Industry Selection
3.1 Key Elements in Selecting Strategic Industries
There could be many elements that should be considered in selecting strategic
industries, but when analyzing this research three core elements were chosen.
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