Census shows service sector fell out of step in 2010
According to the final results of the nation’s first-ever economic census released yesterday by Statistics Korea, the total yearly revenue of Korean businesses reached 4,332 trillion won ($3.8 trillion) in 2010.
The manufacturing sector generated the most revenue with 1,464.3 trillion won, or 33.8 percent of the whole. But the services sector, including dining and lodging, broadcasting and media, education and health and social services, only managed 575.9 trillion won, or 13.2 percent of the total that year.
Such a yawning gap between a heavyweight manufacturing sector and a welterweight services sector has been the subject of criticism by industry observers.
The Organization for Economic Cooperation and Development noted in a report last Thursday that the productivity of Korea’s services industry only remained at 53 percent of manufacturing productivity, much lower than the OECD average of 87 percent.
The Paris-based organization underscored the importance of services, saying that 85 percent of high-income countries’ GDP growth in the last 25 years came from the services sector.
“There’s also a question of where Korea is going in the future. [It has] been mostly manufacturing-based in [its] growth, with admirable productivity and growing market share,” said OECD Secretary General Angel Gurria last week.
“But now as you move into services, clearly, productivity in the area of services also has to catch up.
“The productivity of services industries has to be improved in order to ease income disparity as well,” said Koh Young-sun, a Korea Development Institute research fellow, noting that lower productivity was caused by the local service sector being relatively unexposed to global competition.
The economic census was conducted between May and June 2011 based on earnings reports and personnel records as of the end of 2010.
By Lee Jung-yoon [email@example.com]
More in Economy
On the campaign trail
Online courses get failing grades from tech students
Help after the rains
The Gangnam-Gangbuk price gap remains