Raising productivity requires addressing a wide range of policies that affect resource allocation, the creation and diffusion of technology, human capital and the creation and financing of start-ups. The greatest gains can be achieved in the service sector and in SMEs, where productivity has...

Labour market reforms are essential to promote social cohesion by removing obstacles to employment, particularly for women, youth and older persons. In addition to reducing income inequality and poverty, such reforms would also sustain economic growth as Korea’s working-age population begins...

Rising household debt has become a major policy concern in Korea. By the end of 2012, it had risen to 164% of disposable income, well above the OECD average of 133%. In addition to the economic impact and the risk to the financial sector, it raises social cohesion issues, as households with low...

One-half of Korea's population aged 65 and over lives in relative poverty, nearly four times higher than the OECD average of 13%. Elderly poverty is thus an urgent social problem. The immediate priority is to target the Basic Old-Age Pension on the lowest-income elderly to ensure that they...

The Korean government has made fostering a “creative economy” a top priority. The goal is to shift Korea's economic paradigm to one based on innovation in which new start-ups and venture businesses play a key role. However, the venture capital market is still at an early stage of...

To strengthen social cohesion, a top government priority, it is essential to address the labour market roots of inequality by breaking down dualism to reduce the share of non-regular workers and to boost the employment ratio toward the government’s 70% target. Education reforms are also...

A creative economy requires innovation-friendly conditions. Korea’s innovation system should be improved by upgrading universities and expanding their role in business R&D, while increasing international collaboration in R&D from its current low level. The returns from Korea’s large...

Large business groups, which played a key role in Korea's economic development, are still dominant today, especially in exporting. The concentration of economic power creates a number of problems and risks. Ensuring a level-playing field between the business groups, also called chaebols, and...

Making SMEs and start-ups a driver of growth and job creation requires a number of policies to improve the performance of SMEs, whose labour productivity in the manufacturing sector has fallen to less than a third of that in large companies. The large-scale support for SMEs should shift from...