KICOX's New Task: Creating World-Class Innovative Industrial Clusters
- Serving as a trendsetter in a fast-changing economic environment

The head office building of Korea Industrial Complex Corporation (KICOX), a public corporation in charge of a government-commissioned task of managing national industrial complexes, known as a landmark of Korea's first venture enterprise structure, is situated at the formerly Guro Industrial Complex.
With KICOX taking the initiative in keeping up with changes of the times, the sprawling area has been transformed into a district with apartment-type factory buildings, mostly housing venture and IT businesses. The so-called "chimney industrial complex" that once served as a backbone of the past economic strides in the 60s and 70s, has now repositioned itself as one of Korea's biggest venture and IT concentration centers, threatening to the prestige of the Teheran Venture Valley in southeastern Seoul.
Said Kim Chil-doo, president of KICOX: I took charge of duties related to KICOX as I served as director of the Regional Industry Department at MOCIE in 1988. Things have dramatically changed. KICOX's role and expectations to the corporation have been getting greater as the corporation is now discharged with two state tasks being pushed under the Participatory Government - regional development and balanced development.
Industrial complexes, managed by KICOX, take up 31 percent of Korea's entire domestic manufacturing production, 44.7 percent of entire exports and 13.3 percent of total employments, serving as a buttress to the national economy.
Under a government strategy for driving an innovation-driven economy, KICOX is putting more energy into creating world-class innovative clusters for industrial complexes with a global competitive edge by integrating R&D and corporate support services in a bid to improve occupant companies' competitiveness. Now seven industrial complexes will be cultivated as model innovate clusters on an experimental basis and the project will be expanded later to cover all industrial complexes across the nation, said the KICOX president. The following are the excerpts of an interview KICOX President Kim had with NewsWorld.
Question: What impression do you have with 100 days in office as the president of KICOX as of Jan. 24.
A: I feel a strong sense of responsibility as he took office as president of KICOX in charge of an important position of managing national industrial complexes last Oct. 15.
Making the most of the experience and knowledge I have gained during my career, including the vice minister of the Ministry of Commerce, Industry and Energy (MOCIE) since 1975 when I set out my public servant job at the ministry, I will do my best in making our industrial complexes secure a key base for contributing to balanced national development and raising the national income. In this regard, I will try to work hard so that even petty jobs, part of the efforts to establish KICOX's new identity, could come to fruition.
Q: I understand that KICOX is contributing much to development of industrial complexes and support of occupant companies. What're the corporation's major functions?
A: KICOX is a government-commissioned agency specializing in management of national industrial complexes. It overseas management of 30 national industrial complexes in such cities as Banweol, Gumi, Changwon, and Yeosu, including the Seoul Digital Industrial Complex, formerly named as the Guro Industrial Complex. The industrial complexes, encompassing 81 million pyeong or 267.3 million sq. meters, accommodate 19,862 occupant firms.
KICOX's major functions include establishment of a master plan for managing each industrial complex in an efficient manner, sales and leasing of industrial sites, and duties related to after-sale management for supporting production activities. The corporation operates 10 Factory Establishment Support Centers across the nation and carries out support projects, including one designed to build up common logistics services. KICOX implements such new projects as establishment of innovative networks and industrial clusters as well as industrial complex advancement projects, including e-cluster for pursuing informatization of industrial complexes in a bid to beef up collaboration among industry, research institute and academic sectors.
Q: How much do national industrial complexes contribute to creating jobs and exports?
A: Industrial complexes account for 31 percent of Korea's entire domestic manufacturing production, 44.7 percent of entire exports and 13.3 percent of total employments as of the end of last year, playing a pivotal role of the national economy. Now that our economy is characterized by industrial complex-centered structure, serving as the backbone of industrial production, innovation-driven cluster strategy is materialized in earnest, centering around industrial complexes, major industrial clusters.
Q: You become the first ex-administration official to take the helm at KICOX unlike your predecessors, all politicians. What're your future plans?
A: I think KICOX should change its long-term policy paradigm into pursing innovation-driven clusters for balanced national development and focus on raising occupant companies' competitive edge.
I will make efforts to establish a new corporation identity of maximizing support for occupant companies by improving international competitiveness through easing inconveniences facing occupant firms and removing stumbling blocks to corporate activities.
Q: You occupied such long-term planning posts as assistant minister in charge of trade and investment and MOCIE vice minister, and you now have virtually become an executor of duties. What do you think the difference, and what're your priority areas in managing KICOX?
A: I took charge of duties related to KICOX as I served as director of the Regional Industry Department at MOCIE. Things have dramatically changed since then. KICOX's role and expectations to the corporation have been getting greater as the corporation is now discharged with two state tasks being pushed under the Participatory Government - regional development and balanced development.
Speaking specifically, KICOX is putting a lot of energy into implementing projects of creating innovative clusters for industrial complexes. The corporation is poised to reposition itself as an institution specializing in creating innovative clusters for industrial complexes with the goal of achieving balanced national development and innovation-driven economy in an era of globalization and knowledge-based society. The rationale of the strategy is that KICOX plays a pivotal role in transforming industrial complexes, originally developed primarily for manufacturing production, into world-class innovative clusters with a global competitive edge by integrating R&D and corporate support services in a bid to strengthen occupant companies' competitiveness.
Q: Could you elaborate on KICOX's roles as to a government policy for balanced regional development?
A: The Participatory Government is attaching top priority into a new paradigm of national development policies, including decentralization and balanced national development, with the goal of realizing a balanced, developed society in which all the people live a better life together. National competitive edge now depends on competitiveness of provincial areas. In this respect, regional self-sufficiency though renovations should be pushed as a foundation for balanced national development.
Korea will have to renovate a business environment dramatically so that businessmen can do business activities freely by introducing systems corresponding to global standards and abolishing regulations with an eye to making Korea a business-friendly nation.
Accordingly, KICOX will put its focus on constructing innovative clusters so that industrial complexes can build up an innovative environment and occupant companies can nurture their growth potential. The corporation will do its best in creating "innovative industrial complexes" in which occupant firms and workers are willing to joint forces to improve added value.
Q: KICOX offers services concerning establishment of factories free of charge. What about the reaction of the beneficiaries?
A: It takes much time and efforts since establishing factories are involved in such jobs as locating an industrial site and obtaining a variety of approvals and permissions. There are 70 regulations relevant to establishment of factories, and the number of approvals and licenses required totals 50. There are also many government agencies involved in the process. As a result, many businessmen complain about the hassle, and an increasing number of Small and Medium Enterprises, faced with difficulties in establishing factories, are turning to China, partly contributing to hollowing manufacturing out of Korea.
Experts with the Factory Establishment Support Center provide free agency services ranging from factory foundation, surveying a planned industrial site, to issuance of approvals and licenses. SME businessmen, lacking in the understanding of land use and environment regulations, benefit from the exemplary administration services, designed to prevent their trials and errors and save costs.
The centers, set up at five regional head offices upon the inauguration of KICOX, have successfully handled a total of 7,952 factory establishment cases as of the end of last October. The processing time for establishing a factory is reduced from 60 days to 20 days.
In November 2003, KICOX opened the Factory Establishment Call Center in which services on factory establishment are available by calling its representative number 1566-3636.
The corporation operates the Factory Establishment Management System (FEMIS), designed to provide on-line services on factory establishment and registration.
Q: Apartment-type factory buildings have sprung up in the Seoul Digital Industrial Complex, changing greatly the landscape of the area. What's your management plan?
A: The former Guro Industrial Complex had contributed to boosting exports since its inception in 1964. Since the name of the industrial real estate was changed to the Seoul Digital Industrial Complex in December 2002, a boom for constructing apartment-type factory buildings followed, with the number of such structures now rising to 30.
The number of occupant companies in the industrial complex, which stood at a petty 442 in 1997, has now surged to 3,300, mostly comprising of ventures and IT companies, making a strikingly contrast with the past image of the so-called "chimney industrial complex." Twenty 20 apartment-type factory structures are under construction, and construction for 19 more is to start. If at least 50 more buildings are built by the end of the year, bringing the number of occupant companies to more than 3,000, the Seoul Digital Industrial Complex will become one of the nation's largest venture and IT concentration centers,
Q: KICOX recently set up common logistic centers in Changwon and Sihwa national industrial complexes. What's your estimate on saving logistic costs for the industrial estates?
Amid the cut-throat business competition, a reduction in logistic costs is an essential source of profits. The common logistic centers, each in Changwon and Siwha industrial complexes, are expected to firm up corporate competitive edge. The centers provide such logistic activities as distribution & processing and cross docking to occupant companies.
Q: SMEs are suffering from such woes as manpower shortage and financial difficulties. What steps does KICOX plan to take to support such companies?
A: In an effort to ease financial difficulties facing SMEs, 190 billion won has been set aside in the industrial infrastructure fund, including 60 billion won for occupant firms of KICOX's industrial complexes. The corporation holds regular separate recruit exhibitions designed to connect SMES, suffering from manpower shortage, and job seekers, according to regions. Job arrangement centers attracted 15,128 job seekers in the first eight months of last year, and 3,335 applicants managed to land jobs.
Q: Regional economies have suffered a setback. Voices worrying about a phenomenon of hollowing out manufacturing base are getting louder. What steps are in place to cope with such a problem?
A: The policies for addressing the structural slump of regional economies are cultivation of regional industries and balanced national development. It is essential that universities and research institutes, in charge of regional R&D, large- and medium & small-sized companies, in charge of manufacturing, and institutions discharged with support activities, get together and establish an innovative network collaborating each other to have synergetic effects and secure self-sufficiency in regional industries through facilitation of industrial clusters.
In consideration of such woes, KICOX is concentrating on establishment of clusters for industrial complexes for opening their bright future. In this respect, the corporation operates an "innovation cafe" each at five areas, including Seoul and Incheon, as is the case with the Gyeongnam Network Hub in Changwon. The cafe serves as the so-called delivery room for making regional innovations through such activities as technology exchanges and consultations, information sharing and marketing support. The cafe is used as an exclusive space for innovative initiators, including corporations, local governments, supporting institutions, universities and research institutes to form a network of supporting the local economy through sharing such information as solution of grievances and creation of new projects.
Q: You pointed out regional industries and self-sufficiency of such areas as Busan, your native town, in your recent released book, titled "Busan's Economic Innovation and Development." as the planned relocation of an administrative capital has been scuttled, how much KICOX can contribute to balanced national development?
First, as part of its efforts to supply land sites at lower prices, KICOX will make efforts to build industrial complexes for land lease to SMEs with long-term, easy loans and construct apartment-type factory buildings.
The Weollim Lease Industrial Complex, covering 15,000 pyeong or 495,000 sq. meters, has been leased to 66 companies. The Asan complex is put on lease for land covering 31,000 pyeong. 371 companies are accommodated in apartment-type factory buildings with 50,000 pyeong in combined floor space in seven industrial estates, including Namdong, Sihwa, Changwon and Gwangju national industrial complexes. The fifth apartment-type factory building in the Changwon National Industrial Complex with 6,845 pyeong in combined floor space is under construction. Construction of factory buildings with 3,696 pyeong in combined floor space are also under way in the Daebul Foreign National Industrial Complexes.
Secondly, KICOX will cultivate seven innovative clusters on an experimental basis and later expand the innovative cluster project to cover all industrial complexes across the nation. The model seven innovate clusters will include four industrial complexes - the existing mainstay industry concentration centers in Gumi, Changwon, Ulsan, and Banweol-Sihwa - and three others with relatively good infrastructure for innovative clusters in Gwanju, Gunsan and Weonju.
Thirdly, KICOX will aggressively push ahead with a project to upgrade industrial complexes. A success case in point is the former Guro Industrial Complex, touted as a leading force of "the Miracle of the Han River," that has now transformed into the future-oriented Seoul Digital Industrial Complex, a venture and IT center. Setting an example of the success project, the corporation will focus on transforming the national industrial complexes, now serving as a manufacturing concentration center, into advanced real estates with key industrial clusters, including regional strategy industries, and specialization. Industrial estates will be strengthened as regional industrial clusters by accommodating relevant innovative institutions, including universities and research institutes and reinforcing a network. Efforts will be made to attract organizations offering such support services as marketing, financing, consulting, distribution and other service industries related to manufacturing. Outdated infrastructure of industrial complexes, mostly built 20 to 30 years ago, will be refurbished.
Fourthly, KICOX will strengthen efforts to boost foreign investments. The corporation will work toward efficient management of the six industrial complexes reserved for foreign-invested companies, while trying to supply more land for foreign-invested companies by creating or expanding industrial estates reserved for foreign companies. The six reserved for foreign-invested companies are Cheonan, Pyeongdong in Gwangju, Gumi, Ochang and Jinsa national industrial complexes. The lease rate stands at 100 percent for Cheonan, 79 percent for Pyeongdong in Gwangju, 67 percent for Daebul, 39 percent for Gumi, 29 percent for Ochang and 48 percent for Jinsa. The national industrial estates reserved for foreign-invested companies attracted 127 companies with $456 million and creation of 4,119 jobs. nw