[EDITORIALS]Productivity report card

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[EDITORIALS]Productivity report card

A report by the Korea Productivity Center that compares labor productivity in the year 2000 among industrialized countries reveals plainly the real state of Korea's economy, which the nation has taken pride in pulling out of the 1997 financial crisis.

According to the agency's calculation, Korea ranks 20th among the 25 countries of the Organization for Economic Cooperation and Development in added-value labor productivity, or gross domestic product divided by the number of employed persons. Korea's per-capita valued-added labor productivity was $30,935 in 2000. The figure was 46.6 percent of the comparable productivity of the United States, $66,341, and 63.5 percent of Japan's $48,744. In other words, additional economic value created by two Korean workers fell short of what a single U.S. worker produced. The gap was wider than in the previous year, when Korea's labor productivity was half that of the United States and 64.1 percent of Japan's. Considering that labor productivity may vary depending on the standards used to calculate it, one cannot blame Korean workers based on the Korea Productivity Center's figures alone.

As the gap helps define the economic competitiveness of a nation, the government and private industry must hurry to draw up measures to narrow it. The biggest reason why the 4.7 percent growth in the nation's value-added labor productivity fell far short of the economic growth rate of 8.8 percent in 2000 is the inefficient industrial structure. Korea's labor productivity in the manufacturing sector did not differ much from that of other advanced economies, but the nation's service-sector productivity was half the level of the United States and Japan.

Therefore, Korea's industrial structure should be revamped in a way that enhances additional economic value in both the manufacturing and service sectors through innovation in high value-added industries, including information-technology and bioengineering. Labor quality should also be raised to save time and resources at workplaces. By doing so, we can expect higher labor productivity even with the implementation of a five-day workweek.
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