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News The 2024 KDI Conference: Reform Measures for Enhancing Productivity in the Korean Economy

News

The 2024 KDI Conference: Reform Measures for Enhancing Productivity in the Korean Economy

The 2024 KDI Conference: Reform Measures for Enhancing
Productivity in the Korean Economy


  • The 2024 KDI Conference, themed "Reform Measures for Enhancing Productivity in the Korean Economy," was held on December 11 in Seoul. The conference aimed to address critical reform tasks to sustain the dynamism of the Korean economy amidst challenges such as slowing growth rates and an aging population.
     


    In his opening remarks, KDI President Dongchul Cho emphasized that enhancing productivity across society is essential to supporting economic dynamism, particularly as growth driven by labor and capital inputs has reached its limits. He expressed hope that the conference would contribute to the advancement of Korean society by presenting major structural reform agendas within the framework of productivity enhancement.

    Prime Minister Duk-soo Han conveyed his congratulatory remarks, emphasizing that by revitalizing our dynamism and cohesion amid the numerous challenges we face both domestically and internationally, any crisis can be overcome. He further expressed hope that the various policy recommendations presented at the conference, through social discourse, would serve as a solid foundation for national development. Due to an urgent schedule, he was unable to attend the conference.


    During the keynote address, Dr. Changwoo Nam, KDI Senior Vice President, highlighted the rapid decline in total factor productivity and stressed the low labor productivity of labor-intensive SMEs in the service sector. He further emphasized that fostering economic growth ultimately increases the likelihood of achieving social stability.
     


    The first session, "Efficient Allocation of Production Resources," included several expert analyses. Dr. Yonghyeon Yang, Director of the Center for Regulatory Studies at KDI, emphasized the need to reform outdated regulations that impede productivity improvements. Dr. Minsub Kim, Associate Fellow at KDI, highlighted the importance of enhancing labor market flexibility and security to address the challenges posed by rapid industrial restructuring and demographic changes. Dr. Changwon Lee, Senior Research Fellow at the Korea Labor Institute, analyzed the dual nature of Korea’s labor environment. He pointed out that rigid labor-management relations frequently lead to strikes and hinder the rational reform of wage systems. At the same time, smaller, non-unionized businesses exhibit weak protections for vulnerable workers, highlighting the contrasting challenges within the labor landscape. Lastly, Dr. Minho Kim, Fellow at KDI, advocated for shifting government SME support policies from subsidy-based protection to "scale-up" strategies aimed at fostering growth and improving productivity.
     


    The second session, titled "Enhancing Creative Innovation," explored the role of education and research. Professor Hi Sam Kim from GIST highlighted a growing public perception that education fails to foster social mobility. Professor Ee-gyeong Kim, Dean of Chung-Ang University Graduate School, pointed to the stagnation in school education innovation, attributing it to stakeholder conflicts and rigid, uniform systems, despite the critical role of secondary education in nurturing national talent. Professor Joon Mo Ahn from Korea University discussed R&D efficiency, highlighting Korea's status as a global leader in technological innovation. He noted that the country ranks among the top globally in terms of R&D investment relative to GDP and the scale of R&D personnel.

    The third session, "Strengthening Robust Social Capital," explored issues of regional balance and corporate governance. Professor Jin Park from the KDI School of Public Policy and Management emphasized that regional development should be driven by competition among localities, which requires granting greater autonomy to local governments. He further noted that achieving a certain level of balanced development is essential to enable fair and healthy competition among regions. Dr. Sung Ick Cho, Senior Director of the Department of Industry and Market Policies at KDI, suggested that stakeholder-driven self-regulation is a more desirable and effective approach than public intervention for addressing opportunistic practices by large conglomerates (chaebols) and enhancing innovation. Finally, Dr. Jinkook Lee, Senior Research Fellow at KDI, analyzed subcontracting practices, pinpointing challenges such as increased dependency and power imbalances stemming from holdup problems, which expose businesses to various challenges.

    The 2024 KDI Conference brought together experts from diverse fields to provide valuable insights and propose actionable strategies for tackling Korea’s economic challenges. By focusing on productivity enhancement, creative innovation, and robust social capital, the conference underscored the importance of comprehensive structural reforms to ensure sustainable growth and economic resilience in the face of evolving domestic and global dynamics. 

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