Beyond semiconductors: Seoul unveils blueprint to revive growth engines in steel, shipbuilding, autos and petrochemicals

The government has unveiled its first economic structural reform blueprint aimed at reversing a decline in the country's potential growth rate. The plan calls for expanding AI integration across key industries — including steel, shipbuilding, automobiles and biotech — while overhauling labor and welfare systems to restore growth momentum beyond the economy's current reliance on semiconductors.

The blueprint, titled "Direction for Economic Structural Reform," was announced Thursday at an emergency economic headquarters meeting and ministerial conference on economic and structural reform, chaired by Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol.

The government diagnosed the economy as facing sustained downward pressure on its potential growth rate due to a shrinking working-age population, sluggish investment and stagnant productivity — compounded by the failure of recent economic gains to reach ordinary households. Officials said structural reforms are needed both to respond to the AI revolution and supply chain realignments reshaping the industrial landscape, and to narrow widening gaps in assets, income, employment, generations and regions. The government described the current moment as a "golden window" for structural transformation toward an "irreplaceable Korea," pledging to focus national policy capacity on economic structural reform alongside immediate policy responses.

The initiative rests on three pillars: industrial structural innovation through a "Beyond Semiconductors" strategy; securing social mobility and sustainability through "Growth for All"; and building a structural reform infrastructure encompassing fiscal, tax, financial and regulatory improvements. The government plans to raise both industrial competitiveness and the public's lived experience of economic progress through cross-ministry collaboration and coordinated policy packages.

Under the "Beyond Semiconductors" strategy, the government will extend AI-driven manufacturing innovation across key industries including steel, petrochemicals, biotech, home appliances, shipbuilding and automobiles. In steel, the focus will be on AI-integrated manufacturing processes and hydrogen-based steelmaking; in petrochemicals, on AI-driven process innovation and business restructuring. The shipbuilding sector will adopt humanoid robot-based manufacturing — including welding robots — while the automotive industry will strengthen its competitiveness in next-generation vehicles through AI factories and autonomous driving technology. Development of next-generation power semiconductors and AI semiconductors will proceed in parallel. The government also plans to develop humanoid robots tailored to 10 key industries including chemicals, steel, automobiles and shipbuilding, and to deploy 1,000 AI robots per year centered on AI factories and smart factories.

Under "Growth for All," the government will strengthen safety nets for vulnerable groups. It plans to develop measures to reinforce support for those facing livelihood and financial insecurity, and to reform the basic pension and retirement pension systems. Small business owners will receive support for online expansion, commercialization funding and AI-based management innovation, alongside rural growth strategies and policies to revitalize local commercial districts.

In the labor sector, the government will overhaul education and vocational training systems to address the spread of AI, including a revamp of the Tomorrow Learning Card program. It will also introduce a basic law on the rights of working people covering workers in special employment arrangements and platform-based jobs, along with measures to protect the health of night-shift workers and improve safety and working conditions at small businesses. Youth policy will be fleshed out through life-stage support covering employment, residential needs, asset building, marriage and childbirth, and cultural life — anchored by plans to train more than 200,000 AI and other specialist professionals and create 200,000 jobs in the private and public sectors.

The government said it will hold the ministerial conference on structural reform, chaired by the deputy prime minister for economic affairs, at least once a month to monitor progress on individual tasks. Urgent structural reform items — including measures to restore youth employment and revitalize the retirement pension system — will be brought forward in sequence and announced as integrated policy packages linking fiscal, tax, financial and regulatory improvements, following consultations among related ministries and expert discussions.