[The Editors' Verdict] Policies to Enhance Digital Competitiveness

“Job seekers crowding at every metaverse recruitment booth,” “An era of working through the metaverse” are recent headlines attracting much attention. Significant social and economic changes are occurring worldwide. At the core of these changes lies digital technology. South Korea takes pride in being the “world’s best” in digital technology fields, including telecommunications. However, the reality we currently face is quite different. The telecommunications service industry, a representative sector of digital technology, has stagnated in growth. Although some media and content sectors show growth, the overall media and content market is losing vitality or becoming increasingly dependent on overseas operators. Digital platforms showing noticeable growth still require innovation to secure competitiveness compared to global platforms.

Recent environmental changes have made policy responses more challenging. One of the most notable changes is the shift in the economic paradigm due to entering an ultra-aged, low-growth era. The traditional economic growth system, which relies heavily on labor as a primary input, has reached its limits. Accordingly, the importance of innovation based on digital technology has increased. The intensification of industry boundary dissolution and the expansion of the platform economy also demand changes in policy directions. The widening growth gap between companies effectively utilizing digital technology and those that do not is another issue. Currently, nations and companies are being urged to reduce their dependence on international linkages. The global value chain, which emphasized efficiency and low cost, is being reorganized into a system that prioritizes safety, crisis management capabilities, and resilience. As data-driven social and economic innovation accelerates and the data economy era dawns, responses to these changes have become necessary.

To restore the competitiveness of the digital industry, which forms the foundation of South Korea’s economic growth amid rapid changes, six policy directions must be considered. First, strengthening the appropriateness of policy instruments. A decline in trust regarding the suitability of policy tools makes policy implementation and achieving effects difficult and may provoke resistance to policies. Second, policies must be established in a way that promotes industrial innovation, inclusiveness, and an open system in response to the convergence between industries and companies. Digital innovation has caused disparities between industries. Policy philosophy and goal setting for both the public sector and private industries that respond to these changes are necessary.

Third, as new competitive structures form due to digital innovation, issues of jurisdiction and limitations of existing regulatory frameworks need improvement. Measures to minimize conflicts between existing industries or stakeholders arising from the emergence of new businesses must be devised. Fourth, policy governance suitable for the evolutionary stage of each industry should be established. Fifth, policies should be reorganized to focus on industrial revitalization. In a situation where global operators enter the domestic market and new competitive relationship systems are formed in each industry, domestic industrial revitalization is an essential policy element. Lastly, enhancing social trust and consumer protection is necessary. While increased use of digital technology enhances consumer utility, it also significantly raises the possibility of infringing on consumer sovereignty.

Through policy formulation suitable for the digital transformation era, it is hoped that not only social utility will increase but also a digital innovation ecosystem will be created where all stakeholders, including companies and users, grow together.

Shin Minsu, Professor, Department of Business Administration, Hanyang University

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