An Input–Output Analysis for the Economic Potential of a New Convergence Industry: A Focus on the Autonomous Vehicle Sector in South Korea

• Published in: Sustainability Vol. 16; no. 20; p. 8816
• Main Author: Kim, Kyunam
• Format: Journal Article
• Language: English
• Published: 11.10.2024
• ISSN: 2071-1050; 2071-1050
• DOI: 10.3390/su16208816

While it is crucial to grasp the economic potential in emerging convergence industries in order to develop effective policies and strategies for digital transformation, evaluating the potential is still challenging. This study develops a novel input–output model suitable for analyzing the economic potentials of subsectors in a new convergence industry. Furthermore, this research quantitatively assessed the economic potential of three sectors—components, vehicles, and services—within the autonomous vehicle industry in South Korea using the method newly proposed by this study and contrasted the results with those obtained from a traditional approach. It is found that the experimental approach introduced in this study can capture both the inter-sectoral relationships within the emerging convergence industry and its fundamental characteristics related to other sectors. As an empirical result, the autonomous vehicle service sector is found to drive the highest level of increase in production and labor for other industries. The vehicle sector has relatively high forward and backward-linkage effects, functioning as both supply and demand across the value chain of the autonomous vehicle industry. It also shows that the components sector has a relatively higher ripple effect on industries related to the infrastructure of autonomous vehicles, such as maintenance and energy fields. To rapidly establish an autonomous vehicle ecosystem and enhance its economic impact at the national level, it is essential to develop a “Soft Power” corresponding service sector. Consequently, the implementation of supportive and market-driven policies in this area is imperative.