OREANDA-NEWS. August 01, 2013. CEO Chung Joonyang explained the recent cause and state of the low-growth, low-profit structure that the Korean manufacturing industry is facing, and suggest 6 solutions on how to overcome the crisis.

At the `90th Korea Leaders Forum` held at the Seoul Chosun Hotel under the theme of `Crisis of the Korean manufacturing industry, finding a new path in an era of creative economy,` CEO Chung Joonyang in his keynote speech to 150 members of politics, academia, and CEOs explained from a macroscopic perspective that, ``The reason the Korean manufacturing industry is experiencing declining profitability of up to 6.5% in the first quarter compared to 9.4% of operating profit in 2010 is because of disproportionate supply and demand in the global manufacturing industry, increasing competition in the East Asia regions including Japan and China, and an industry structure that is concentrated only on a few categories of business.``

6 Major Execution Strategies

- Foster creative talent -Innovative corporate culture

-Fusion and compound of industries -Strengthen industrial ecosystem

-Technology innovation -Value competition

CEO Chung especially added that, ``Excess supply rate of the global automobile industry is 25% and steel industry 30%, indicating that the chicken game is becoming clearer among companies. Also, cost competitiveness against Japan in the global market is becoming more difficult while the technology gap with China is becoming narrower.``

He additionally pointed out internal corporate issues pointing out that, ``We have put weight on the fast follower strategy through overseas benchmarking and technology imitation, and have strived for supplier oriented low-cost mass production systems. The rigid corporate culture formed from striving for high speed growth is now hindering creativity.``

CEO Chung continued on the changing paradigm of the manufacturing industry after the global financial crisis explaining, ``Global companies have set strategies focused on profit rather than sales, and the market is moving away from being supplier-centric with the appearance of smart consumers placing more value on consumer value. Creative ability rather than product manufacturing is becoming the core of competitiveness.``

CEO Chung emphasized that `creative economy` is the alternative plan to solve these issues that the industry is confronted with suggesting 6 major execution strategies of `fostering creative talent, innovative corporate culture, fusion and compound of industries, strengthening the industrial ecosystem, technology innovation, and value competition.``

He especially noted the need to systematically foster talent through academic-industry cooperation by mentioning, ``The core of corporate competitiveness is in securing talent that continuously creates new ideas based on thorough understandings of natural science and social science and has execution capabilities of bringing ideas to reality through hands-on experience.``

CEO Chung also emphasized `3T` as the model of a desirable industry ecosystem where fair trade between large and small-medium enterprises takes place based on mutual trust (Trust), win-win cooperation (Together), and forming a future-striving environment (Tomorrow) by sharing cooperation results and creating new values.

He also introduced POSCO style creative economy execution cases including `POSPIA 3.0` which manages overall tasks from production, finance, marketing, and technology as well as risk, and the `Idea Marketplace` which is leading win-win cooperation with small and medium enterprises and job creation by supporting youth venture foundation.