Business Leaders: "20 Years of Stagnation in the Service Industry, 21st National Assembly Must Take Action"

Source: Korea Chamber of Commerce and Industry

[Asia Economy Reporter Changhwan Lee] Businesses have called for the 21st National Assembly to actively pursue reforms of outdated laws and systems to promote the long-stagnant development of the service industry.

According to the Korea Chamber of Commerce and Industry (KCCI) on the 3rd, a group of 73 nationwide chamber chairpersons, including KCCI Chairman Park Yong-man, appealed through the "Economic Suggestions to the 21st National Assembly Members" that "the domestic and international economic situation is being diagnosed as the worst since the Great Depression of the 1930s," and urged that "the National Assembly must prioritize support for the service industry and the revision of laws and systems for new industries to revitalize the economy."

The KCCI analyzed that the service industry, which is a treasure trove of jobs with twice the employment creation power of manufacturing, is instead regressing year by year. As of 2017, the service industry's share in the entire domestic industry was 58%, down from 61% about ten years ago.

Furthermore, this share is significantly lower than major advanced countries such as the United States at 80% and the United Kingdom at 79%. Labor productivity in the service industry also ranks 27th out of 31 OECD countries, placing it near the bottom.

The main reason for the underdevelopment of the service industry is evaluated to be insufficient policy efforts by the government and the National Assembly. Since 2001, more than 20 government measures have been introduced to improve the service industry, but their effects have been minimal. The Service Industry Development Act was proposed repeatedly from the 18th to the 20th National Assembly but was discarded without ever being passed.

The chairpersons emphasized that for the development of the service industry, the public mindset that services are free must disappear, the government and the National Assembly must ease regulations, and differential support compared to manufacturing is necessary. They also added that revising related laws, including allowing telemedicine?a key issue?is absolutely necessary.

Discovering new industries was also cited as a core issue for economic revitalization. With the Fourth Industrial Revolution, many entrepreneurs are attempting to find new business opportunities, but outdated laws and systems of the National Assembly are obstructing these efforts.

The chairpersons stated, "Last year, the 'Framework Act on Administrative Regulations,' which applies the principle of prior permission and post-regulation in new industries utilizing new technologies, was legislated, but its actual operation remains unclear," and argued, "Concerns about side effects in overall administration and a culture of mid- to long-term review still persist, and these must be improved."

They continued, "We must prepare for the worsening talent shortage problem alongside the development of new industries," adding, "We need to predict and respond to talent supply and demand in promising fields such as biohealth, next-generation semiconductors, and artificial intelligence."

Woo Tae-hee, Executive Vice Chairman of the KCCI, said, "The 21st National Assembly should revisit past communication methods in our society and induce fundamental changes in the economic and social operating system through comprehensive redesign of laws and systems. In particular, I hope that areas where the National Assembly can lead change, such as establishing a Special Committee on Legal and Institutional Improvement or introducing legislative impact assessments, will receive special attention and be managed intensively to become achievements of this National Assembly."

This content was produced with the assistance of AI translation services.