After start-ups fail, outdated regulations to be loosened

Home > Business > Economy

print dictionary print

After start-ups fail, outdated regulations to be loosened

Finance Minister Yoo Il-ho promised less restrictive regulation reforms on Wednesday to expand new technologies and industries and stimulate further growth as the nation’s manufacturing-based economy has reached its limits.

“It is important to change outdated regulations that prevent the birth of new industries, new technologies and the convergences of the two,” the minister said during a keynote speech at the International Forum on Global Industry hosted by the Korea Institute for Industrial Economics and Trade.

“The government will convert to a ‘negative’ regulation system, which will approve any businesses in principle and only make a few exceptional bans,” Yoo added. “For new businesses where legality is absent or ambiguous, special approval will be made or temporarily given for trial runs.”

The minister’s comment comes as the government’s regulations are being criticized for preventing several start-ups from achieving success. One that was forced to close was Hey Dealer, a second-hand car dealership app created by three Seoul National University graduates. The company was shut down because businesses that sell cars must own parking spaces of at least 3,300 square-meters (10,827 square-feet).

Another company, the ride-sharing business Callbus, was a smartphone app offering minibus rides after public transportation services end for the day. However, the legality of the business was put under review by the government earlier this year after taxi companies complained, concerned it would eat into their profits.

Following much controversy Hey Dealer’s business resumed after being closed for 50 days and Callbus will hold a trial service in May after reaching an agreement with the taxi industry by making several adjustments including limiting its service hours.

“Despite recent low economic growth, technological advances have allowed the industrial ecosystem to change rapidly,” the minister said. “The fourth industrial revolution is already taking place, with every object becoming intelligent. The physical world and the Internet are connected and services are autonomous.”

He stressed that new jobs like big data analysis, IoT design and smart healthcare development are being created thanks to the changing paradigm in these industries.

“The manufacturing-centered economy has reached its limits and we have to overcome this through innovation,” Yoo said.

The minister also stressed the
importance of developing the service industry.

“The service industry accounts for 70 percent of all employment [in Korea] and yet productivity is only equivalent to 42.7 percent of the manufacturing industry,” Yoo said. “We plan on creating jobs that are popular among young people by fostering promising service industries related to medicine, finance and contents [cultural and media products].”

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)