Combining new industries with IT
Last year, Korea’s exports shrank in size, but compared to other countries, the slowdown was not as serious, and Korea was the sixth largest in the world in exports. At the end of last year, Korea’s sovereign credit rating was elevated to the highest in history, thanks to enhanced economic fundamentals and reforms. However, not much praise has been given in the news, as Koreans are anxious that the future of the Korean economy won’t be so hopeful.
A new era is unfolding with information technology changing the world. The Davos Forum earlier this year defined the fourth industrial revolution as in progress. As driverless vehicles, drone and remote medical services show, information technology-driven innovation is spreading across fields from finance to distribution to medicine.
Reflecting the global trend, the Park Geun-hye administration announced the creative economy policy three years ago. The creative economy refers to creative and innovative development in the Korean economy of new products, technologies and services that never existed before. It is another way to enter the ranks of developed economies.
Nevertheless, development of new industries to build new economic structures cannot speed up due to existing regulations and resistance from interest groups. The emergence of new industries with IT innovation results in creative destruction and discord with existing industries. While adjustments in speed and support for adaptation in the course of a transition to a new structure may be necessary, rejection and resistance inspired by group egoism should be avoided for the future of the Korean economy.
In the early days of information technology, Korea was praised as a leader in hardware-oriented development. However, collaboration between industries and information technology has not been active due to opposition from interest groups in established industries, and overall industrial competitiveness is weakening. Korea’s information technology and medical services are one of the best in each field, but due to the fight over rights, industrial cooperation is not smoothly carried out in remote medical examinations and treatment.
The structure of the economy is not floating in the air but stands on the foundation of politics and society. For renovation called economic reform to be successfully completed, we need a stable and reliable partnership foundation. Reform cannot be implemented by the government alone, and all members of society should participate and work together.
BY Kim Joon-kyung, President of the Korea Development Institute
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