'Gov't should help manufacturers digitize fast to overcome global supply chain risks'

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By Lee Kyung-min

The government should fortify policy assistance to help manufacturers swiftly digitize, as prompted by the continued efforts of Korea's advanced global peers to tackle global supply chain disruptions and soaring costs of raw materials, a government research organization suggested, Sunday.

Easy and quick exchanges of key data between large conglomerates and their small and medium-sized enterprise peers will help bolster the industries' competitive advantage, pushing up the overall productivity of the economy, according to the Korea Institute for Advancement of Technology.

The early and effective transition to digital processes could be an important breakthrough to overcome the looming crisis in manufacturing. The sector is the country's growth driver, accounting for 27.8 percent of the GDP.

The institute said Korea should benchmark the cases of the U.S., Japan, and the European Union (EU), mostly in their differing approaches tailored to the size, capabilities and sustainability of individual firms.

The institute said that Korea should improve the level of public services, backed by strengthening of the country's infrastructure, needed especially for small market players with limited access to costly high-tech resources.

Germany, for example, runs non-profit entities including research bodies and technology innovation centers, helping coach small enterprises in order to transform the entire inter-firm network. A similar digital center set up by Singapore fosters integrated policy assistance with science and technology consulting agencies in the country.

The approach by the U.S. is best summarized by the Senate-passed U.S. Innovation Competition Act, the gist of which includes providing federal funding for the Internet of Things (IoT) and 5G to accelerate the digital transformation of manufacturing.

Long-term and continued funding for high-tech research and development (R&D) has followed, as illustrated by an investment of $1.3 billion (1.6 trillion won) by the U.S. Department of Commerce's National Institute of Standards and Technology (NIST) into supporting applied high-technologies in manufacturing from 2012 to last year. About $442 million was allocated to fostering industrial technology services this year.

Underpinning the sizable investments are 16 manufacturing innovation research institutes in 13 states in the U.S., with their dedicated areas of expertise including the development and advancement of digital manufacturing, new materials, manufacturing network security and robots.

The EU plans to set up a long-term budget of 1.21 trillion euros from 2021 to 2027 to provide stable funding for cloud computing, big data and artificial intelligence.

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