Sound health management and supportive policies helped Korea emerge swiftly from the pandemic, with economic growth boosted by strong semiconductor exports. The recovery is set to continue as pandemic-era restrictions on contact-intensive services are shelved, despite the Russia-Ukraine war raising inflation and highlighting the need for supply chain resilience. Fiscal policy support will need to be scaled back to finance rapid population ageing. Spending should focus less on supporting firm survival in an SME sector with chronically low productivity and more on supporting people and business dynamism. The productivity gap between small and large, highly productive companies is reflected in labour market dualities of income, job quality and social protection. It spurs fierce competition among young men and women to enter prestigious universities and good jobs and slows down youth’s labour market entry and family formation. Record low birth rates reflect that combining motherhood and a career is difficult, and raising children and investing in their education is expensive and time-consuming. Korea is well-placed for a green transition, with a functioning emissions trading scheme and popular support. Reforms to reduce productivity gaps and improve business dynamism would help Korea achieve ambitious cuts in greenhouse gas emissions, with a smoother and less painful structural reallocation of capital and jobs.