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Boosting Productivity in Korea’s Service Sector

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Author Info
Randall S. Jones
Abstract

Labour productivity growth in the service sector has been low relative to manufacturing. This is explained in part by weak competition in services resulting from strict product market regulation and the low level of import penetration and inflows of foreign direct investment (FDI). Increasing productivity growth in the service sector, which accounts for 67% of employment and 58% of value added in Korea, is essential to sustain high potential growth. The priority is to strengthen competition by eliminating domestic entry barriers, accelerating regulatory reform, upgrading competition policy and reducing barriers to trade and inflows of FDI. Another challenge is to enhance the performance and accelerate the restructuring of small and medium-sized enterprises, which account for over 90% of service-sector employment. Furthermore, it is essential to boost productivity in service industries with high growth potential, such as telecommunications and financial and business.

Rehausser la productivité dans le secteur des services en Corée
La croissance de la productivité du travail dans le secteur des services a été lente par rapport à celle du secteur manufacturier. Cela s’explique en partie par la faiblesse de la concurrence dans les services, due à une réglementation stricte des marchés de produits et à un niveau peu élevé de pénétration des importations et d’entrées d’investissement direct étranger (IDE). Un renforcement des gains de productivité dans le secteur des services, qui représente 67 % de l’emploi et 58 % de la valeur ajoutée en Corée, est essentiel pour soutenir un taux élevé de croissance potentielle. Il faut en priorité intensifier la concurrence en supprimant les barrières intérieures à l’entrée, en accélérant la réforme de la réglementation, en améliorant la politique de la concurrence et en réduisant les obstacles au commerce et à l’afflux d’IDE. Une autre tâche difficile sera de rehausser les résultats et d’accélérer la restructuration des petites et moyennes entreprises, qui représentent plus de 90 % de l’emploi dans le secteur des services. Il est par ailleurs indispensable de stimuler la productivité dans les domaines qui ont un fort potentiel de croissance, comme les télécommunications et les services financiers et aux entreprises.

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Paper provided by OECD, Economics Department in its series OECD Economics Department Working Papers with number 673.

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Date of creation: 20 Feb 2009
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Handle: RePEc:oec:ecoaaa:673-en

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Related research
Keywords: Business service; competition policy; financial services; foreign direct investment; FTAs; KFTC; Korea; legal services; productivity and growth; regulatory reforms; service sector; services trade; Small and Medium-sized Enterprises; telecommunications; commerce de service; Corée; croissance de la productivité; investissement direct étranger; KFTC; petites et moyennes entreprises; politique de la concurrence; réforme de la réglementation; secteur des services; service aux entreprises; services financiers; services légaux; télécommunications;

Find related papers by JEL classification:
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
R21 - Urban, Rural, and Regional Economics - - Household Analysis - - - Housing Demand
R31 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Housing Supply and Markets

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This page was last updated on 2009-11-23.

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