Moon Jae-yong and Kim Hyo-jin
A stronger service sector could accelerate South Korea’s economic growth by up to 1 percentage point and create 150,000 new jobs, a state-run think tank study showed.
Lifting Korea’s service sector productivity to the level of developed countries could boost the country’s gross domestic product (GDP) growth to as much as 3.6 percent and generate 150,000 related jobs, Korea Development Institute (KDI) said in a policy forum on service sector development Wednesday.
“Getting Korea’s service productivity to reach the average productivity rate of the Organization for Economic Cooperation and Development (OECD) member countries would lead to a 0.5 to 1 percentage point increase in Korea’s overall economic growth,” said Kim Yong-seong, a KDI senior fellow. The country’s GDP grew 2.7 percent last year, the Bank of Korea confirmed. It projected this year`s growth to be 2.6 percent.
The economic uplift is also projected to add 150,000 new jobs on top of the estimated 100,000, he added.
Korea’s export-reliant economy has long been viewed as heavily skewed toward the manufacturing sector, with its service industry significantly underdeveloped compared to that of its advanced peers. The country’s service productivity is rated 43 on a scale of 1 to 100, falling far short of the OECD average of 67.
Choi Jeong-pyo, president of the KDI, also noted the service sector’s potential to shake the country out of its economic slump. “Transforming our services to a high value-added industry could generate quality jobs and form the backbone of the Korean economy,” he projected.
The think tank outlined five priority sectors in need of focused development, including culture and tourism, continuing education and training, senior health care, child care and education, and environment.