An Economic Ripple Effect Analysis of Domestic Supercomputing Simulation in the Industrial Sector

Abstract

The manufacturing industry is the foundation that drives economic growth, and manufacturing innovation is essential for sustainable growth advantage and the transition into a digital economy. Therefore, major countries actively support the field of simulations, which incorporate information and communication technologies into manufacturing, and announce various policies at the national level along with increasing investment. Simulation technology virtualizes product development processes to replace physical production and experimentation of products, dramatically reducing time and costs. In South Korea, the Korea Institute of Science and Technology Information (KISTI) has supported manufacturing companies for about 14 years by providing relevant technologies. This study uses the input-output table for the Bank of Korea to analyze the economic ripple effect. First, we identified the domestic industrial sector dealing with the supercomputing-based simulation industry. Then we analyzed its ripple effects by dividing them into the production inducement effect, value-added inducement effect, employment inducement effect, and forward/ backward linkage effect. Consequently, when the supercomputing simulation budget of KISTI (28.3 billion won, 2007-2020) was set as an input coefficient, the analysis showed 45.1 billion won as the production inducement effect, 24.7 billion won as the valueadded inducement effect, and 282 individuals per 1 billion won as the employment inducement effect. This study is significant in that it derived the effects of the inputs by analyzing the economic ripple effects of the projects of KISTI, which have been supporting South Korean manufacturing companies for the past 14 years with supercomputing-based simulations.