A new economic ecosystem

President Lee Myung-bak held a meeting last Friday with financial magnates. According to the Federation of Korean Industries, the largest business lobby group in Korea, the nation’s top 30 conglomerates plan to invest about 87 trillion won ($77 billion) in total this year, up 16.3 percent from last year’s 74.8 trillion won, and expand recruitment by 8.7 percent compared to the previous year by hiring more than 79,000 employees. Samsung Group is expected to make the second largest investment in its history. LG Group President Koo Bon-moo said, “We will further expand investment earlier than scheduled.” In this period of employment problems, this is welcome news. Lee, who puts the highest priority on job creation, has expressed his gratitude to the business leaders for announcing such radical investment plans.

The fact that the president urged businesses to consider investing more from the outset of the new year sets a good example. Corporate investment is a matter that must be judged on its own merits, rather than through government pressure. However, our society has been seeing no employment growth since the outbreak of the financial crisis. A considerable amount of corporate investment moved overseas. Recently, there is an indication that this atmosphere is changing. Large conglomerates who survived the global financial crisis are announcing plans to engage in aggressive management in a bid to take positions of leadership as global providers. Labor-management relations dragging down the Korean economy are undergoing rapid change. Strikes are disappearing and law and order are coming into force. A new economic ecosystem is being created to ensure that the government, management and labor will join hands to make another quantum leap.

It has been repeatedly emphasized that the national economy can’t be expected to move forward without an expansion of investment. Investment, which is overly weighted toward foreign countries, should make a U-turn back to Korea. Ambitious new year’s blueprints for investment expansion have gone up in smoke over and over again. This should stop this year.

The federation has launched a committee for the creation of three million jobs nationwide in the coming eight years. The government and politicians need to take measures to provide a healthy investment atmosphere. Outdated institutions hampering job creation and labor market flexibility should be overhauled across the board. A variety of labor patterns should be allowed to cope with changes at work and to meet global standards, and barriers to entry into the service industry should be drastically lowered. This is a shortcut to creating jobs for women and young people.