Food industry emerging as next growth engine

Food industry emerging as next growth engine

If one asks which industry has served as the driving force of the Korean economy today, nine out of 10 people would readily say it is manufacturing.

Thanks to the growth of heavy and chemical manufacturing, Korea has made breakthroughs in trade, surpassing $1 trillion in volume in the 21st century.

However, manufacturing is now struggling both at home and abroad, hit by the prolonged global economic slump, the weakening Japanese yen and other unfavorable conditions.

On the other hand, there is an industry that has demonstrated continuous growth for the past 10 years. Globally, this industry is 3.2 times larger than the automobile industry, 1.8 times larger than the IT industry and 5.1 times larger than the steel industry.

This is the food industry, which many economists describe as the pioneering industry of the future.

The size of the Korean food industry recorded some 157 trillion won as of 2013, growing 71 percent over the past 10 years from 2004. In 2013, when manufacturing shrunk 1.1 percent year-on-year, the domestic food industry grew by 2.9 percent.

Such growth is not only significant, but it has a positive impact on agricultural and fishery industries.

Of course, there is still a huge difference in size between manufacturing and food. The reason we ought to keep our eyes on the food industry is because it is continuously exhibiting the potential for growth, despite the prolonged worldwide recession.

According to Datamonitor, a research institute based in Britain, the size of the global food market in 2014 stood at $5.3 trillion, and is expected to reach $6.3 trillion by 2018, expanding at an average annual rate of 3.9 percent.

Notably, it is encouraging that the food market in the Asia-Pacific region, to which Korea belongs, maintains an average yearly growth rate of 5.9 percent and that China’s market is growing rapidly by over 20 percent annually.

One may look at the domestic food industry with anxiety since its global competitiveness is still in its infancy.

Indeed, a meager 19 domestic food companies recorded over 1 trillion won in sales in 2014. Among the 116 food companies listed on the 2015 Global 2000, the comprehensive list of the world’s largest companies compiled by Forbes, CJ Cheil Jedang is the sole Korean company, besides KT&G.

Nonetheless, global competition is just beginning for Korea’s food industry.

I am confident that Korea’s food industry will accelerate its growth once the ongoing research and development, spearheaded by food companies heading overseas, will bear fruit.

The government policies and state-backed projects, such as the Korea National Food Cluster, will bring results, further enabling the food industry to cement its footing as Korea’s driver of growth.

With the post-manufacturing era on the horizon, we must succeed in identifying the new growth engine that will replace manufacturing.

In this process, we must stress sustainability rather than mere economic growth. If the food industry loses its steam quickly, it would only create greater confusion in society.

Given the potential of the overseas food market, potentially much larger than the automobile and semiconductor markets combined, our goal of boosting domestic consumption and the mutual growth of agriculture, forestry and fishery, the food industry will indeed be the growth engine that will create new added value.

This is not at all impossible if we add our savory taste for hand-made food, sincerity, and scientific sanitary control with healthy ingredients.

On Sept. 14 and 15, the Ministry of Agriculture, Food and Rural Affairs successfully held a promotional event for Korean food and an export fair in Tokyo and Osaka for two days in an effort to expand our exports to Japan.

Representatives from 78 Korean food exporting companies and 102 Japanese import buyers took part in the promotional event.

The ministry aims to reach $10 billion in export volume for agricultural goods by 2017. To that end, the ministry will concentrate its efforts on creating measures that will help the food industry develop into Korea’s future growth engine by pushing ahead with extensive export measures, such as market research, logistics, identification of new markets and publicity.

Source:http://www.koreatimes.co.kr/www/news/opinon/2015/11/137_189793.html

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