Input-Output Analysis on the Korean Engineering Industry Supporting Manufacturing Business

Being technology and knowledge-intensive and high valued, the engineering industry enhances the competitiveness and productivity of related industries. Moreover, recent economic circumstances continue to raise the significance of the engineering realm, not only along with the spread of inter-industry convergence but also with the extension of the industry scope requiring cutting-edge technologies. Reflecting these industrial trends, the world engineering market is currently growing 17% on average every year and also expected to continue its growth. However, the engineering industry in Korea has been regarded as a part of construction and plant businesses and has overlooked the fields supporting manufacturing businesses. This misconception is responsible for the deviation of the Korean engineering industry from the global trend. Considering current world-wide upheaval in the manufacturing realm which has been the industrial base of Korea, it is time that we conduct a comprehensive study of the engineering industry. This study will provide insights into transforming the domestic manufacturing industry into a high valued one as well as laying a foundation for further advancement of the Korean engineering industry.This research identifies Product Engineering by suggesting its definition and industrial scope. In addition, this study examines how current domestic Product Engineering is being applied to the fields of manufacturing business. By comparing the engineering input level with that of the leading countries in the manufacturing industry, we can better grasp the current status of the domestic engineering industry. In transition to tertiarization, this research reveals the differences of domestic Product Engineering input structure with the help of Input-Output analysis.To this end, we employ World Input-Output Data to examine the input structures and make a diagnosis of Korean Product Engineering by comparing with other economies. Simply put, the results show that domestic Product Engineering is seemingly being utilized in an active way. However, its competitiveness is not high enough to accommodate domestic demand. For this reason, Korean manufacturing firms end up with heavy reliance of Product Engineering on foreign countries, such as the U.S. and Germany