OECD Economic Surveys: Korea 2016

OECD Economic Surveys: Korea 2016 Summary

Executive Summary

• Current Situation: Korea is experiencing slower growth and low inflation, partly due to productivity gaps between sectors (manufacturing vs. services, large companies vs. small and medium enterprises, SMEs) and issues in the labor market that exacerbate inequality and poverty.

• Policy Focus: The government is implementing policies aimed at ending low growth and inflation, focusing on productivity enhancement through innovation and structural reforms, and improving the labor market to promote inclusive growth and social cohesion.

Key Findings and Recommendations

1. Productivity and Innovation

   • Issues: Productivity is low, largely attributed to the gap between manufacturing and services sectors, and differences between large corporations and SMEs.
   • Recommendations: Implement appropriate frameworks to increase productivity, upgrade the innovation system, develop human capital, promote SME productivity through innovation, and expand access to capital markets.

2. Labor Market Reforms

   • Focus Areas: Addressing labor market dualism, strengthening social safety nets, expanding employment opportunities for women, integrating youth into the labor market, and utilizing older workers to reduce poverty.
   • Recommendations: Promote inclusive growth by enhancing labor market flexibility and inclusiveness, ensuring fair treatment of all workers, and providing support to vulnerable groups.

Outlook

• Positive Impact of Reform: The report highlights the positive impact of past reforms on the Korean economy, emphasizing the need for continued efforts to maintain and enhance economic stability and growth.
• Collaboration with OECD: Korea looks forward to further collaboration with the OECD to achieve "better policies for better lives", contributing to the stable development of the global economy and improving the quality of life within member countries.

Key Themes Covered

• Regulatory Reform Initiatives: Emphasizes the importance of streamlined regulations in fostering business growth and innovation.
• Non-viable Companies: Discusses strategies for managing and restructuring non-viable firms to improve overall economic health.
• Capital Markets Expansion: Advocates for broader participation and support for businesses through expanded capital markets.

Conclusion

Korea's 20-year membership in the OECD has facilitated knowledge exchange, policy adoption, and collaborative efforts aimed at addressing current economic challenges. The report underscores the necessity of continuous reform and cooperation to ensure sustainable economic growth and improved living standards.