With an understanding that economic integration and reunification of North and South Korea should be accompanied by structural reforms of the two Koreas’ industries and industrial development of North Korea, this paper aims at drawing a competitive industrial map of the Korean Peninsula and exploring ways to restore North Korean industries and grow its economy.
  In order to maximize economic integration and economic benefits from unification, reforming disparate industrial structures of North and South Korea is necessary to create a synergy effect. In other words, as their economic power and institutions are different from each other, the two Koreas have to make industrial reforms in a reasonable way to create a favorable environment for unification and develop industries with growth potential in North Korea.
  North Korean industries are expected to face changes from three perspectives. Firstly, with economic sanctions from the international community rising, the North will continue to change its industrial policy depending on 'external factors'. Secondly, North Korea's industrial policy in the future will focus on normalization of leading industries and improvement of internal efficiency. Thirdly, with investments from other countries and Sino-North Korean economic cooperation limited, the North will face a dilemma between its planned economic system and a market-oriented economy.
  To restore North Korean economy and achieve its sustainable development, the following measures are required.

  a. Finding and nurturing industries that will lead economic growth
  b. Coming up with methods to attract investment to expand production and supply capacity
  c. Enhancing growth potential by expanding SOC facilities
  d. Fostering labor intensive industries to strengthen social safety net that lead to both economic growth and enhanced welfare
  e. Developing export and basic industries based on establishment of a special zone or an industrial complex of local specialization
 
  Directions for inter-Korean industrial cooperation and industrial reform in preparation for unification will have to focus on early economic recovery and industrial normalization of North Korea, while focus on strengthening competitiveness of South Korean industry through building a structure of division of labor that can make a win-win situation.
  From a mid and long-term perspective, these should be pursued with consideration of balanced land development of the Korean Peninsula, enhancing regional  cooperation, formation of an economic community and economic integration of North and South Korea. They also have to consider association with establishment of a Northeast Asian economic bloc.
  To this end, the North will have to implement comprehensive and vigorous reforms and make large-scale investments on most industries. It will also have to foster new industries through privatization of state- owned properties, while attract foreign direct investments to nurture new industries, and establish a division of labor system in relation to South Korea’s key industries.
  This paper points to promising industries in North Korea after unification. Firstly, light industry exports like textiles and clothing, ICT manufacturing and service industries, and food processing and daily necessities industries targeting expanded domestic markets will lead growth in North Korea.
  Secondly, the service industry along with the light industry will have to play a leading role in creating jobs in the North shortly after economic integration.
  Thirdly, with demands for construction rising, the construction industry and related industries including construction materials like machinery, cement and plastic products should be nurtured as one of short-term growth industries right after unification.
  Fourthly, the machinery industry will be one of key industries of North Korea for a mid and long term period based on a comprehensive industrial base. Fifthly, the materials industry such as steel and chemical industries have to experience a limited modernization through rapid and powerful reforms on relatively competitive sectors.
  Sixthly, while restructuring and fostering existing industries, industries of new or advanced technologies that have an advantage to enter into the North region have to be developed so that the foundation for North Korea’s mid and long term economic growth can be established.