Shipbuilding: The Neglected Industry among Those of Shipping, Maritime & Marine: The Case-Studies of UK, Japan & S Korea

Abstract

Adam Smith observed that UK endowed by different “natural gifts” vis-à-vis other nations, and so he proposed specialization and trade. Also, the mechanization could boost the productivity of manual labor, leading to the 1 st Industrial Revolution. One unintentional mistake of Smith occurred in basing economic development only on “resource-based industries”! Mercantilists discovered that UK’s “wealth” can be derived from a positive Balance of Trade! British also realized , using their Navy that a number of colonies would promote their trade, and UK’s wealth, and formed the 1 st sea Cartel (1875). This led British to obtain the highest share in global seaborne trade, since 1890, but also to be first in the global shipbuilding . This advantage lost by UK in the 1960s, and also lost by Europe in 1978, and obtained by Japan, S Korea and China! Piracy determined nations’ territorial sea! The liberated colonies voted the “Law of the Sea”, in 1982, creating the “Marine Economies”! Arabs in 1975, and others in 1979, and Russia in 2022, created a great challenge for economists of how to achieve “sustainability”. The cyclicality of shipbuilding, since 1948, is shown as well the behavior of ship-owners, during 1975-1987 depressions. Interesting were the results of a survey carried-out among 50 Greek shipping companies of how to select a shipyard. We created 3 diagrammatic & mathematical models to analyze the way shipbuilding prices are determined, and the role of fixed cost, including the case of a price war . Finally, we elaborated the issues of why to establish an ephemeral shipbuilding industry at all, and why to build ships for foreigners…