1887

2020 OECD Economic Surveys: Korea 2020

image of OECD Economic Surveys: Korea 2020

Economic activity has contracted less in Korea than in other OECD countries, thanks to the prompt and effective reaction of the authorities to contain the spread of the COVID-19 virus and to the wide-ranging government support to households and businesses. Nevertheless, the pandemic generates strong headwinds. Huge uncertainty surrounds global economic prospects and hence the outlook for exports, which are a key engine of the Korean economy. The crisis will have a lasting effect on some economic sectors and therefore require significant resource reallocation. The impact of the COVID-19 pandemic compounds pre-existing challenges, notably rapid population ageing and relatively low productivity in parts of the economy. This Survey draws on the OECD Jobs Strategy to outline policies to enable the creation of more and higher-quality jobs and foster more inclusive growth. It also highlights how further digitalisation can boost productivity growth, competitiveness and well-being.

SPECIAL FEATURES: AGEING, DIGITALISATION

English Also available in: French

Promoting the diffusion of technology to boost productivity and well-being

Korea is a top player in emerging digital technologies, with an outstanding digital infrastructure and a dynamic ICT sector. The COVID-19 outbreak highlighted the importance of digitalisation to contain the spread of the virus, by allowing quick testing and tracing of infected people, and spurred the development of the “untact economy”. Remote access both facilitated physical distancing and mitigated the economic impact of the crisis by enabling more people to continue working. Digital technologies offer opportunities to raise firms’ productivity and the population’s well-being. However, wide productivity gaps between large firms and SMEs and between manufacturing and services weigh on economy-wide productivity, which is far below the OECD average. A wide skills gap between youth and older generations prevents an increasing share of the population from taking part in and enjoying the benefits from a digitalised economy. This chapter suggests ways to narrow the digital divide by enhancing the diffusion of digital technologies among firms and individuals. Increased participation in quality ICT education and training for students, teachers, SME workers and older people is key to address the lack of adequate skills and awareness of digital benefits or dangers (online security, cyberbullying, addiction). Promoting innovation networks between SMEs, academia and large firms through vouchers or platforms can support SMEs’ R&D and commercialisation of innovative goods and services. Waiving stringent regulations through regulatory sandboxes can help identify and alter regulations that hinder the adoption and diffusion of digital technologies.

English

Graphs

This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error