83.9% of Korean Manufacturers Say "Main Industries Are Dying Out"... New Businesses "Not Sure"

[Financial News] Domestic manufacturers have raised warning voices that the lifespan of their main industries is coming to an end. 
On the 4th, according to a survey conducted by the Korea Chamber of Commerce and Industry on 2,186 manufacturing companies nationwide regarding the 'Current Status and Challenges of New Business Initiatives', 83.9% of companies revealed that they have no competitive edge or have been overtaken in their main industry sectors. Only 16.1% of companies said they are maintaining a competitive edge.
Looking in detail at the responses that they have no competitive edge or have been overtaken, △ 'The technology gap has disappeared, and competition is fierce' 61.3% △ 'Competitors are chasing right up to the chin' 17.1% △ 'Already overtaken in competitiveness' 5.5% were the order.

In this survey, 54.5% of responding companies said that their current main products are in the 'maturity stage' of market saturation, and 27.8% of companies said they are in the 'decline stage' of market reduction. Only 16.1% of companies said they are in the 'growth stage', and 1.6% responded that they are in the 'introduction stage', the early stage of market formation.
By industry, non-metallic minerals had the highest proportion of responses indicating maturity and decline stages, followed by refining, petrochemicals, and steel. The responses indicating maturity and decline stages exceeded 80% in industries such as machinery, textiles, automobiles, food, and electronics. The Organization for Economic Cooperation and Development (OECD) predicted that the global steel supply surplus, a representative industry of China's oversupply, would exceed 630 million tons last year (Korea's crude steel production 63 million tons) and surpass 700 million tons by 2027. 
Despite the fact that the lifespan of main industries is coming to an end, the promotion of new businesses was found to be sluggish. Only 42.4% of responding companies said they have started or are reviewing new businesses to replace their current main products, while more than half, 57.6%, said 'there are no new businesses currently underway'. Concerns are emerging that conservative management, which clings only to existing businesses in a saturated market, may become entrenched. Reasons cited by companies for abandoning new business initiatives include △ worsening business conditions such as financial difficulties (25.8%) △ lack of confidence in the market and business feasibility of new businesses (25.4%) △ failure to discover new business items (23.7%). A representative of a small and medium-sized chemical company supplying materials for batteries said, "We planned to expand plant facility investments this year to expand supply volumes and develop new materials, but we are at a standstill because we could not raise about 40 billion won in funds," adding, "We are receiving investments from venture associations because we cannot raise the investment cost, which exceeds half of the annual sales, with additional bank loans, but it is not sufficient."
The Korea Chamber of Commerce and Industry emphasized that comprehensive support measures for advanced new businesses and main industries should be prepared, and urged the government to introduce direct refunding of investment and tax credit amounts, designate AI investment special zones, prepare patient capital, reintroduce special tax credit for disposal of excess facilities, reduce electricity rates, and expand employment maintenance subsidies. KCCI Team Leader Kim Hyun-soo stressed, "To promote active investment and innovation by companies that are shrinking due to high uncertainty, it is important for the government to share the risk of corporate failure." 
Meanwhile, this survey was conducted via email and fax from June 2 to June 13, targeting 2,186 manufacturing companies nationwide. ehcho@fnnews.com Reporter Cho Eun-hyo