The Korean economy is showing growth centered around semiconductors, but the gap between macroeconomic indicators and the public's perception of the economy remains unresolved. Park Yang-soo, head of the Korea Chamber of Commerce and Industry's Economic Research Institute, emphasized the need for Korea to secure new growth drivers to make a significant leap forward rather than settling for the current growth trend.
In a recent interview with Aju Economy, Park diagnosed that "the gap between macroeconomic indicators and the public's perception of the economy is still significant." While some indicators, including exports, suggest a clear recovery, it is difficult to conclude that economic conditions have improved for households and businesses.
He pointed out that the concentration of growth in large corporations and specific sectors, such as semiconductors, is a reason for the disparity between perceived and actual economic conditions. Although the increase in semiconductor exports is boosting the overall growth rate, the benefits of this growth have not sufficiently spread to domestic consumption and small businesses.
Park also identified exchange rates as a variable. He noted, "While the value of the won has recently stabilized, it remains at a high level, and uncertainties regarding prices due to external factors, such as conflicts in the Middle East, persist." He added that it is risky to assess economic recovery based solely on strong exports in an unstable external environment.
Despite the current stagnation of the Korean economy, Park believes that further leaps are possible. He introduced the concept of the 'S-curve,' explaining that even if the economy enters a stagnation phase after growing based on new industries and technologies, securing new growth drivers can lead to another upward trajectory.
He stressed the importance of creating a 'second S-curve' rather than repeating past growth methods. The current semiconductor boom should not merely be seen as an opportunity for economic recovery but as a stepping stone to transition to a new growth phase.
As new growth drivers, he highlighted advanced industries, climate technology, and energy development. He argued that it is essential to maintain the competitiveness of existing key industries while expanding investments in areas with significant future growth potential. Given the favorable conditions of the semiconductor supercycle, he suggested leveraging this opportunity to enhance the competitiveness of the entire domestic industry.
Park pointed out that jobless growth is also one of the chronic issues facing the Korean economy. Even if the economy expands, if it does not lead to job creation, there will be limits to improving public perception of the economy. He argued that alongside improvements in macroeconomic indicators such as growth rates and export figures, a structure must be created that promotes corporate investment and employment, ultimately leading to increased household income.
He also proposed solutions to address regional disparities, a structural issue. With businesses, talent, and capital concentrating in the capital region, he noted that existing regional development policies have limitations, necessitating a new approach that combines regulation and support.
Park mentioned the 'mega sandbox' approach, which would not only ease individual regulations but also comprehensively apply industry, regulation, and finance to specific regions to build a foundation for growth. He stated, "Utilizing the mega sandbox is necessary to induce corporate investment while leveraging regional characteristics and alleviating the concentration in the capital region. The mega sandbox is a growth strategy aimed at simultaneously addressing the issues of capital region concentration and regional decline."
Artificial intelligence (AI) was also presented as a key task for transitioning to a new growth stage. However, he cautioned that merely approaching AI as a new technology could limit productivity gains. It is crucial to establish the necessary infrastructure for domestic companies, especially small and medium-sized enterprises, to effectively utilize AI in their production and operational processes.
Park assessed that rather than diagnosing an immediate crisis for the Korean economy, the focus should be on how to connect the current growth opportunities to the next stage. If the opportunities presented by the semiconductor boom and export recovery are not linked to new industries, technologies, and investments, there is a risk that the growth momentum could slow again.
He emphasized the need to look ahead to the next decade and establish a new growth model. He believes that merely responding to fluctuations in short-term economic indicators will not be sufficient to overcome structural growth limitations.
Park concluded, "For the Korean economy to move beyond its current stagnation and return to growth, it is essential to nurture advanced industries and climate and energy technologies while simultaneously spreading the effects of growth to employment and regional economies. We must use the opportunity presented by the semiconductor supercycle as a stepping stone to foster new industries and technologies, creating a structure where the benefits of growth are shared across the economy."
* This article has been translated by AI.
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