Reshoring may be just what South Korea needs to deal with its high unemployment rate, especially for the youth, a report said Wednesday, urging additional government efforts to bring back South Korean firms that have gone offshore.
According to the report from the Korea Economic Research Institute, 11,953 South Korean companies had gone offshore as of June 2016, employing a combined total of nearly 3.4 million people in their host countries.
An assembly line at a production facility of Ssangyong Motor Co. in Pyeongtaek, South Korea (Ssangyong Motor)
Of the total, 5,781 firms were manufacturing companies, and they alone had over 2.8 million foreign employees.
"The country will end up with nearly 290,000 new jobs should only about 10 percent of the manufacturing companies bring their overseas production facilities back to the country," said Yang Geum-seung, publisher of the report.
"The number accounts for 61 percent of 467,000 South Korean youths without jobs," the KERI researcher was quoted as saying.
The report noted the country enacted a special law on support for reshoring firms four years ago, but that only 30 companies have returned so far.
In addition, half of the 30 firms said they were not "satisfied" with government support provided since their return, while only 23.3 percent said they were in a recent survey, the report said.
"Manufacturing companies going offshore may be an inevitable choice while searching for the best and most suitable place for their business in such a globalized environment, but there still is a need for efforts to minimize the negative impact of local firms going offshore, such as a reduction in the number of jobs," KERI said in a press release.
"And to encourage the return of companies with maximum impact on the creation of jobs and added value, the government must create a business friendly environment by drastically removing many excessive regulations," it added. (Yonhap)