Korea is No. 15 on WEF competitiveness indexKorea ranked 15 among 140 countries for competitiveness in the World Economic Forum’s latest Global Competitiveness Report released on Tuesday, up two notches from last year.
Korea held onto the No. 1 slot for ICT adoption, and also ranked No. 1 for macroeconomic stability, which it shared with 31 other countries.
But Korea was weak in product marketing as a result of lack of domestic competition and also ranked low for its labor market.
According to the WEF on Tuesday, the United States ranked No.1 in competitiveness followed by Singapore and Germany. Among countries in East Asia and the Pacific region, Korea’s competitiveness ranked sixth.
“The country leads the ICT adoption pillar, boasting some of the world’s highest penetration rates of ICTs,” the report said. “Notably, it spends 4.2 percent of GDP on R&D spending, second only to Israel (4.3 percent).”
But the report noted that Korea struggles with “less tangible drivers of innovation” including critical thinking (ranking 90); interaction and diversity (80); and entrepreneurial and corporate cultures (59).
In subrankings in the ICT adoption category, Korea ranked No.1 on fiber internet subscriptions and sixth on broadband internet subscriptions. It ranked No. 9 when it came to the percentage of internet users to the overall population.
But when it came to mobile broadband subscriptions, Korea ranked 17, which was three notches down compared to last year. On mobile cellular telephone subscriptions it ranked 52.
Korea was praised for macroeconomic stability, ranking No.1 in the subcategory of annual percentage change in inflation, a position shared with 74 countries, and also No.1 for debt dynamics.
Korea’s innovative capability ranked relatively high at eighth, an area in which Germany ranked the highest. Korea ranked second after the United States for buyer sophistication and ranked No. 2 in R&D spending. It ranked No. 3 for patent applications.
But in diversity of the workforce, Korea ranked 82.
Korea’s business dynamism was another area that needed improvement, ranking 22. The United States ranked highest in this field.
While Korea ranked eighth for its insolvency regulatory framework, and 12 for insolvency rate and time to start a businesses, as well as 35 for companies embracing disruptive ideas and 37 for growth of innovative companies, it was very low for the cost to start a business. It ranked 93.
The financial system ranked 19 overall. Korea ranked second in non-performing loans, fourth in insurance premiums. When it came to banks’ regulatory capital ratio, it ranked 97.
One of the areas the WEF said Korea needs improvement in was the product market, the marketplace for finished goods and services (as opposed to raw and intermediate material trading), which ranked 67. Singapore was No. 1 in this field.
Korea ranked 96 when it came to trade tariffs and 85 for complexity of tariffs. It ranked 66 for prevalence of non-tariff barriers.
Korea’s labor-employment relations were among the worst in the world. Korea ranked 124 for labor relations, 114 for redundancy costs and 108 for workers’ rights. Korea’s competitiveness in hiring foreign labor also ranked low at 104.
The Korean Ministry of Strategy and Economy on Wednesday said in a statement that the government will step up the product market’s dynamism by speeding up regulatory reforms.
Additionally it said it will push forward structural reform of the labor market and further strengthening of the social safety net.
“The government is currently working on changing the foundation of the economy and society in areas including income distribution and wealth gaps,” said an official at the Finance Ministry.
BY LEE HO-JEONG [email@example.com]