Industrial Restructuring in the Seoul Metropolitan Region: Major Triggers and Consequences

Abstract

The major triggers and consequences of industrial restructuring in the Seoul metropolitan region have been investigated. Special focus is placed on the textile and apparel industry and the changes it underwent in the 1980s. Rapid increases in wages, labour disputes, currency revaluation, and the high financial costs resulting from high interest rates and a vulnerable financial structure were the most significant triggers. A decline in the rate of increase of labour productivity and shortages of production workers arising from changes in work attitude were also regarded as important triggers. Industrial restructuring in the Seoul metropolitan region has resulted in significant changes in local labour-market structure because of the different labour requirements arising from changes in production systems and organisation. It has also resulted in an altered industrial composition, with a decline in the labour-intensive sector, organisational changes from an increase in subcontraction of production, and different locations. Major corporate strategies under industrial restructuring are discussed in relation to changes in production systems, and product structure, expansion of the internal market, subcontracting and flexible specialisation, job training, and foreign direct investments.