On the Battle between Shipbuilding Regions in Germany and South Korea

Abstract

Over time we can observe a dramatic global shift in shipbuilding activities, from Great Britain to Continental Europe to Japan to South Korea; most recently China is gaining ground. Every transition is accompanied by institutional and political reactions, leading to protectionism and trade conflicts. The most recent of these battles is being fought out between the European Commission, in particular Germany as a major player in this market, and South Korea, which is accused of illegally supporting its shipyards. As state support has traditionally played an important role, both in establishing and in protecting shipbuilding as a strategic industry within a national economy, the concept of political lock-in appears to provide a promising method for explaining both the rise, through its enabling element, and delayed fall, through its constraining element, of these specific regional economies. Against the background of this theoretical concept, an empirical study comparing two competing shipbuilding regions—Mecklenburg-Vorpommern in eastern Germany and Gyeongnam in South Korea—was conducted; the results are twofold. First, restructuring the shipbuilding industry in these two regions seems less affected by local and regional factors than it is by national and international organisations. National and international organisations are, under globalisation conditions, increasingly responsible for regulating the conditions of competition, but are failing to do so. Second, because of the multiscale involvement of political and economic actors and, hence, the increasing complexity of the restructuring process, the concept of political lock-in needs to be integrated into a much broader explanatory framework—which the authors develop.