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Economic conditions

South Korea's Service Sector Must Embrace Liberalization and Globalization to Boost Competitiveness

Strategic Insights

— 1 min read

A presidential economic advisory panel in South Korea has emphasized the need for further liberalization and deregulation to boost the competitiveness of the country's service sector. The panel, comprising university professors, business leaders, and top researchers from state-run think tanks, stressed that preventing participation by outsiders is counterproductive and that the country must learn from the management know-how of first-class companies in the sector. With the service sector accounting for 50.5% of the country's GDP and employing 63.5% of the workforce, the panel's recommendations aim to drive growth and competitiveness in areas such as research and development, consulting, design, and industrial services.

Key Takeaways:

  • The service sector in South Korea accounted for 50.5% of the country's GDP in 2003, with 63.5% of the workforce employed in this sector, a significant increase from 9.05 million in 1995.
  • The advisory panel emphasized the need for liberalization and deregulation to promote growth in the service sector, including allowing foreign schools, hospitals, and leisure centers in free economic zones.
  • Cutting unnecessary red tape and easing development restrictions in and around Seoul are deemed essential for boosting the sector's competitiveness.
  • The panel urged concerted efforts to help South Korean companies achieve competitive edges in areas such as systems integration and information technology to seek markets abroad.
  • The recommendations aim to support the growth of high-value-added industries and prevent the sector from becoming a low-value-added industry.
  • Business leaders have repeatedly emphasized the need for development restrictions to be adjusted to promote growth.

Statistics:

  • 50.5%: The proportion of the country's GDP accounted for by the service sector in 2003.
  • 63.5%: The percentage of the workforce employed in the service sector.
  • 14.07 million: The number of workers employed in the service sector in 2003.
  • 22.15 million: The total number of active workers in the country in 2003.
  • 9.05 million: The number of workers employed in the service sector in 1995.
  • 5 million: The net gain in employment in the service sector from 1995 to 2003.

Sources:

  • Yonhap
  • Asia Pulse (July 14)

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