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Industrial complexes should be transformed

Posted August. 26, 2023 09:19,   

Updated August. 26, 2023 09:19


The Ministry of Land, Infrastructure, and Transport and the Ministry of Trade, Industry, and Energy have devised a plan to eradicate the so-called "killer regulations" concerning industrial complexes. The plan is to remove regulations that hinder the growth and transformation of industrial complexes, such as restrictions on tenant industries, land use, and sales and leasing. The motivation behind this initiative is that the existing laws pertaining to industrial complexes, such as The Industrial Sites And Development Act and The Cluster Development And Factory Establishment Act introduced in 1990, no longer adequately reflect the evolving economic landscape and developmental stages of the Korean economy.

The nation's 1,274 industrial complexes, housing over 120,000 companies, serve as the backbone of the manufacturing industry, propelling the Korean economy. As of 2021, these complexes contributed to 63% of domestic manufacturing production and exports and 54% of total employment. However, nearly 40% of these complexes are now over 20 years old and showing aging signs. Specifically, the outdated conditions that fail to align with the country's rapidly rising living standards are causing workers, including young ones, to be reluctant to work in manufacturing and SMEs.

Due to regulations made during the ‘factory era,’ convenience stores, cafes, and other workplace amenities and facilities that workers need in industrial complexes are significantly lacking compared to residential areas. While the national average is 45 cafes and 16 convenience stores per 10,000 people, the number of cafes and convenience stores in industrial complexes over 20 years old is only 11 and three, respectively. Many workers have to drive out of the complex to buy snacks or a cup of coffee. Workers who prefer to live closer to their workplaces are also dissatisfied because the complexes are far from residential areas. Notably, an issue of illegal parking prevails in industrial complexes built during times of low car ownership, and regulations pose obstacles to expanding parking space.

In this regard, it is necessary to revamp regulations to expand the available land for workplace amenities and facility areas within industrial complexes. Additionally, the removal of partition regulations, which employ outdated criteria to classify industries, is essential to allow the entry of high-tech industries and new service companies. Simplifying ownership transfers is equally important, enabling business owners to efficiently sell or exit factories that are no longer being invested in due to their aging and a lack of inheritors.

Advanced countries with longer histories of industrialization than ours are breathing new life into old industrial areas through renovation. A notable instance is Autostadt in Germany, which repurposed the former Volkswagen headquarters into a car-themed park that attracts millions of visitors annually. Similarly, there are international instances where industrial complexes have been upgraded into expansive shopping, leisure, and cultural zones. The fiercer the competition becomes between industrial complexes and local governments to convert these spaces into desirable locations for the young workforce to live, work, and stay, the better equipped our manufacturing industry will be to overcome internal and external challenges.