CRI

 [ABSTRACT]

This study investigates strategic approaches to invigorate the international service trade sector in Chungcheongbuk-Province (as fallow, Chungbuk), Republic of Korea, and to establish a sustainable framework for transforming the region’s economic structure from a manufacturing-centered model to a service-integrated, high-value economy. While Chungbuk has achieved remarkable industrial growth through its competitive manufacturing clusters—particularly in semiconductors, biohealth, secondary batteries, and advanced materials—the region’s service trade performance remains comparatively limited. This imbalance underscores the need for a comprehensive regional strategy that effectively integrates service industries into the existing industrial ecosystem and strengthens Chungbuk’s participation in the global value chain(GVC).

Background and Problem Statement

The study identifies several structural and institutional barriers that have hindered the expansion of service trade in Chungbuk. First, there is a lack of industrial convergence between manufacturing and service sectors, resulting in limited creation of high value-added service exports. Second, the absence of a regional-level statistical system for service trade makes it difficult to measure the current scale, composition, and performance of service exports, thereby constraining data-driven policy-making. Third, the shortage of specialized human resources—particularly in areas such as international service marketing, export consulting, and cross-border digital trade—acts as a bottleneck for service globalization. Finally, weak institutional coordination between local governments, innovation agencies, and export support organizations has limited policy efficiency and synergy.

Strategic Framework for Service Trade Activation

In response to these challenges, the study proposes a four-pillar strategy for revitalizing Chungbuk’s service trade:

1. Promotion of Industrial Convergence:

By embedding service-oriented components within traditional manufacturing industries, Chungbuk can generate new forms of exportable value. Examples include after-sales and maintenance services in semiconductors, bio-clinical trial outsourcing in pharmaceuticals, and smart factory management services in machinery sectors. This “servicification” of manufacturing is expected to diversify revenue streams and improve global competitiveness.

2. Creation of a Service Export Ecosystem:

The establishment of a cohesive ecosystem connecting research institutions, local innovation agencies (such as Chungbuk Technopark), and small and medium-sized enterprises (SMEs) is essential. The ecosystem should provide integrated export support, including consulting, financing, and digital marketing assistance, while encouraging collaboration with national agencies such as KOTRA and the Korea Trade Association.

3. Digital Transformation and Global Connectivity:

To overcome spatial and market limitations, the study emphasizes the role of digital trade infrastructure. Utilizing AI, big data, metaverse platforms, and e-commerce channels can expand service exports in areas such as education, content production, and medical tourism. In addition, promoting digital certification, online transaction security, and cross-border payment systems will facilitate a more efficient global outreach.

4. Development of Specialized Service Sectors: Focusing on Chungbuk’s regional strengths, five key sectors are identified for priority development: biohealth, medical and wellness tourism, cultural contents, digital education, and smart services. By aligning these sectors with existing manufacturing capabilities and research clusters, the region can achieve synergetic growth and global differentiation.

Future Research and Policy Implications

Building on these findings, this research outlines a series of future research directions and policy-oriented recommendations. One of the most critical areas is the establishment of a data-driven policy foundation. The creation of a Chungbuk Service Trade Statistical System will enable systematic monitoring of service export trends at the regional and industrial levels. Developing quantitative indicators such as a Service Value Index (SVI) will allow researchers and policymakers to measure the degree of “servicification” within manufacturing sectors and to assess policy outcomes more objectively.

Further research should also employ quantitative modeling and empirical evaluation methods, including input-output analysis, Computable General Equilibrium (CGE) modeling, and econometric estimation. These tools can provide deeper insights into the ripple effects of service trade promotion on regional employment, income distribution, and industrial competitiveness. Additionally, comparative studies of successful service-trade regions (both domestic and international) will help identify transferable best practices.

The study also calls for research into institutional and governance reforms. Establishing a regional service trade governance framework—comprising local governments, industry associations, universities, and export agencies—would enhance coordination, reduce policy fragmentation, and improve accountability. Legislative measures such as a “Chungbuk Service Industry Promotion Ordinance” could institutionalize service trade support and ensure sustainable resource allocation.

Human Capital and Globalization Strategies

Another crucial research avenue involves human capital development. Universities and research institutions in Chungbuk should collaborate with industry partners to create specialized training programs in international service business, digital trade management, and cross-cultural communication. Certification systems for service export professionals could further enhance workforce competitiveness. Moreover, global networking initiatives—including partnerships with sister cities, joint service platforms, and overseas incubation centers—will help local firms expand their market reach and global visibility.

Conclusion and Contributions

Ultimately, this study contributes to both academic understanding and policy practice by proposing a comprehensive, multi-dimensional framework for regional service trade activation. It highlights the transformative potential of service trade in driving economic diversification, job creation, and sustainable development at the regional level. The findings emphasize that the evolution of Chungbuk’s economy requires not only industrial upgrading but also systemic innovations in policy design, data infrastructure, digital transformation, and human resource development.

By integrating these strategies, Chungcheongbuk-do can position itself as a leading regional hub for Korea’s global service trade expansion, serving as a model for other provinces seeking to achieve balanced national development through service-oriented growth. This research ultimately lays the foundation for long-term policy collaboration and academic inquiry into the dynamics of regional service trade in the era of digital globalization.