Service export growth is sluggishService exports have been stagnant due to stiff regulations and a lack of government support, a trade association argued Sunday.
According to a report from the Institute for International Trade under the Korea International Trade Association (KITA), aggregate global service exports grew 3.8 percent a year on average from $3.96 trillion in 2008 to $5.77 trillion by the end of 2018.
The global market was dominated by the United States, Britain, Germany, China, the Netherlands and France.
During the same period, the Korean service industry grew an average of 0.8 percent a year, from $90.1 billion to $95.4 billion.
Among the 20 largest service exporters, only Korea and Italy reported service sector export growth of under 1 percent a year.
While the global trend for service exports is to exceed product export growth, in Korea, service exports grew more slowly.
The balance for goods trade for Korea was positive in all 11 years except 2008, but services were in deficit throughout the period. The deficit was $17.3 billion in 2016. $36.7 billion in 2017 and $29.7 billion in 2018.
The report said the government must provide consistent policy support across agencies to create a supportive environment for local players.
Ireland, Singapore and India experienced growth of more than 5 percent per year on average, and the figure for Thailand was more than 10 percent.
The report argued for a dedicated support agency that can offer consistent and systematized support initiatives for local service industry players, citing the examples of Ireland, Singapore and Thailand.
While offering regulatory breaks to players and an improved business environment, like how Japan eased visa requirements for Southeast Asian tourists and how Thailand exempted visa fees for tourists of 18 countries, KITA believes the government could also offer incentives like tax cuts and exemptions that can draw more players to initiate research and development initiatives and business projects, like in the case of Britain, Ireland and India.
And in anticipating future changes in demand and trends for the global service industry, the report said the government needs to start developing expertise that can understand rapidly changing technological trends, adding that educational support is also needed for service industry job seekers.
BY KO JUN-TAE [email@example.com]