[LETTERS to the editor]Advancing amid globalization
The financial crisis of 1997 revealed weaknesses in Korea’s financial system; since then many efforts have been made which have borne fruit. Laws on corporate governance, stock transactions and labor have been substantially improved. Further efforts are needed for the measures to effectively function in line with the goals of institutional reform.
Korean industries have achieved rapid growth, but have weaknesses in high-value areas such as design, marketing and logistics. Korean industries face new challenges to improve their competitiveness. As high-performing sectors have restructured and spurred economic growth, job creation has slowed. Korea needs new development strategies to reverse this trend. Korea’s industrial design companies are unable to overcome the limitations of being small scale because of their lack of capable human resources. Korea’s relatively high distribution cost is another factor that undermines industrial competitiveness. Expanding infrastructure to pare down distribution costs and streamline the complex distribution system will help Korean industries gain a competitive edge.
Restructuring services toward high-performing sectors can be facilitated by government initiatives, with knowledge-intensive services including finance, education and medical sectors as the priority. Coupled with market forces, the government can play an active role in creating new jobs in social services. Expanding child- and health-care systems will be important.
In the era of globalization, regions are redefining their roles as growth engines. Empowering these current industrial bases with innovative capabilities and transforming them into centers of regional development are among the goals of a balanced growth strategy. The challenge is to create regional advantages and endogenous growth. The basic idea is to build growth centers across regions.
Private sector R&D is highly concentrated in a small number of large enterprises. The government should focus on nurturing the innovative capabilities of small-and medium-sized enterprises. Linkages between industry and universities or public research institutes are a means to make R&D activities a cost-effective and risk-sharing venture. Capitalizing on the highly invested information infrastructures, the future direction is to make more balanced growth in IT sectors and to enhance productivity. Service sectors such as software and content creators play a mediator role that contribute to enhance the productivity of manufacturing, and these sectors are also important for creating new jobs. The public and private sectors have a mutual responsibility to develop learning partnerships. The government’s role in this process will be to establish a learning infrastructure to foster learning and eliminate barriers to a learning society. Knowledgeable workers, lifelong learning organizations and a networked learning society will be key factors for success.
Now is the time to make Korea an advanced, open economy. It is important to overcome the passive mindset that globalization and economic opening mean submission to foreign pressure. The country must make the best use of globalization as a growth opportunity, and Korea needs to keep improving its domestic institutional framework. Globalization should be viewed as mutually reinforcing in two directions: the internationalization of indigenous enterprises and inflows of foreign firms. Increasing numbers of Korean firms are expected to go multinational, whereas the Korean market will be an open arena for any firm in the world.
Pramod Kumar, Changwon, South Gyeongsang