Governance role for maintaining competitiveness of Korean shipbuilding industry / by Hwang, Dong Hwang.
Although the global shipbuilding market faces a severe recession due to the shrinkage of international trade, the shipbuilding industry in Korea has contributed to economic growth and employment. Influences of government on the shipbuilding industry have dimmed and every stakeholder manages their own way without direction from the perspective of national interest. On the other hand, the mandatory reduction of CO2 emissions from ships was adopted by IMO in 2011. All possible technologies for energy efficient ships would be considered and major shipbuilding countries have invested in relevant R&D activities. Korean giant shipbuilders have some key technologies for improving fuel efficiency while small and medium firms lack the technologies. Furthermore, the gaps between dual groups are widening in the global recession. Historically, major shipbuilders have taken different strategies. Considering Korea’s status in the industry life cycle, Korea should apply both differentiation strategy and cost leadership simultaneously in order to escape from the China’s pursuit and maintain its present status as a global leader For the purpose of maintaining the status of global leader in the shipbuilding sector, good governance for the shipbuilding industry is necessary. Through good governance for stakeholders in the shipbuilding industry, a different R&D strategy using Open Innovation should be considered. Giant shipyards should be allocated high risk taking R&D grants and assist other small scale firms on the basis of market mechanism. There should be more consideration of R&D grants for small and medium sized shipbuilders and marine equipment manufacturers.