"Low Population Growth Rate, High Per Capita Income: Opportunity to Improve Quality of Life"

Bank of Korea and Korea Chamber of Commerce and Industry Seminar

There is an opinion that South Korea's low population growth rate can serve as an opportunity to increase per capita income and quality of life.

Professor Jonghwa Lee of the Department of Economics at Korea University emphasized at a joint seminar held by the Bank of Korea and the Korea Chamber of Commerce and Industry on the afternoon of the 1st that "population decline itself does not determine the fate of the economy," adding, "In fact, the lower the population growth rate, the higher the growth rate of capital per capita and output per capita, and it can be an opportunity for labor-saving technological development, as well as increasing per capita income and quality of life."

He stressed that in the current domestic and international situation where geopolitical divisions and population decline are becoming the new normal, comprehensive reforms of human resources, technology, institutions, and policies are necessary to sustain stable growth, and especially highlighted the importance of leadership.

Professor Lee expressed concern, saying, "The Korean economy is currently experiencing a triple burden of declining growth potential, persistent income and wealth inequality, and high inflation-financial instability," and added, "It is also exposed to various downside risks such as high interest rates and the Federal Reserve's monetary tightening, declining growth potential, rising energy prices, US-China conflicts, and instability in the Middle East."

He explained that externally, as economic means are frequently used to achieve geopolitical objectives, trade and foreign direct investment are concentrated in friendly countries, and supply chains are being reorganized, which act as threats to both the economy and security.

In response, Professor Lee said, "A comprehensive economic security strategy that proactively responds to changes in the trade environment, such as diversifying trade markets, securing stable supply chains, advancing industrial structure, and fostering high value-added service industries, is necessary."

Domestically, with the total fertility rate falling to one of the lowest levels in the world, total population decline has begun, and aging is progressing rapidly, causing the population structure to change rapidly and growth rates to decline.

As methods to enhance growth rates in this situation, he mentioned the quantitative and qualitative improvement of the workforce through the utilization of women and the elderly, education and labor reforms, expansion of investment, regulatory and institutional reforms, and technological innovation through responses to digital and AI new technologies.

He continued, "Companies need to strive to secure core technologies and human resources necessary for the Fourth Industrial Revolution and digital transformation, thereby turning changes in the external environment and industrial restructuring into new opportunities."

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