12TH MINISTERIAL MEETING ON THE ECONOMY

Deputy Prime Minister Hyun Oh-Seok hosted the 12th Ministerial Meeting on the Economy on July 4 and led the discussions on i) service industry policy directions and stage 1 measures; and ii) plans to deliver on regional development pledges that President Park made during her election campaign.

The following is the summary of keynote speech given by Deputy Prime Minister Hyun at the meeting:

Service Industry Policy Directions and Stage 1 Measures

The service industry is an important pillar of the economy, accounting for 70% of the total employment and 60% of the total industrial output. It also has been a key driver of job creation since the 1990s. The service industry is growing in size, however, its productivity is low and competitiveness is weak compared to the domestic manufacturing industry, not to mention against OECD countries. 

Since early 2000s, the government has implemented a wide range of policies to develop the service industry. As a result, we have seen fruitful outcomes in areas, such as tourism, healthcare and education but there were also areas which left room for improvement due to conflicts of interests.

The development of the service industry is indispensable for our economy to be upgraded and transform into a ‘creative economy.’ Now is the time to secure new growth momentum and lay a consistent and systemic policy framework for the service industry development. To this end, the government, in cooperation with the private sector, carried out thorough analyses of existing service industrial policies and set out a policy direction for the service industry. Also, stage 1 measures were formulated.

The government will develop the service industry with four key principles to ensure that the service industry plays a key role in achieving a 70% employment rate and develops into a new growth engine. They are i) expanding infrastructure; ii) strengthening promising industry competitiveness; iii) resolving difficulties in the field; and iv) reviewing disputes

Stage 1 measures will cover i) measures for expanding infrastructure and resolving difficulties in the field for strengthening service industry framework, led by Ministry of Strategy & Finance, ii) contents industry promotion plan, led by The Ministry of Culture, Sports and Tourism and the Ministry of Science, ICT & Future Planning as a part of the government efforts for strengthening promising industry competitiveness and iii) comprehensive measures for the information security industry promotion, led by the Ministry of Science, ICT & Future Planning.

In the measures for expanding infrastructure and resolving difficulties in the field, the government focuses on rationalizing related systems including taxation, financial and public fee systems as well as SME classification in a way that the service industry is not disadvantaged and augmenting the infrastructure such as fostering professional human capital and supporting commercialization of excellent R&D results.

In the ‘Contents Industry Promotion Plan,’ the government will expand contents funds to support creative ideas and present contents industry development strategy which includes increasing creative platforms, supporting overseas reach and strengthening copyright protection.

In ‘Comprehensive Measures for the Information Security Industry Promotion,’ the government will increase IT infrastructure designation, develop the world’s top 10 information security products, and run information security expert training programs. 

Measures to promote the service industry need to be carried out consistently stage-by-stage from a mid-to-long term perspective rather than be implemented sporadically.

Following today’s stage 1 measures, the government will develop and announce measures to strengthen the competitiveness of promising value-added service sectors, such as tourism and business service.

Plans to Deliver on the President’s Regional Development Pledges

Following the announcement of ‘Campaign Pledge Funding Plan’ in May as a part of its efforts to finance national priorities, the government has mapped out a regional development pledge implementation plan to proactively support regional development policies. Through discussions with related ministries and local governments, the government has detailed out timeline and support principles for regional development projects that President Park promised during her election campaign. Based on these timeline and principles, the government will unveil funding amount and implementation plans for 106 regional development pledges. After prioritizing 106 pledges through relevant procedures, the government will develop the National Fiscal Management Plan accordingly and reflect it in the budget planning

With regard to regional development pledges, it is crucial that local governments have ownership and develop projects that substantially contribute to regional development. In this regard, related ministries are asked to closely work together with relevant local government from the initial planning stage to ensure regional development pledges are successfully delivered.

Based on today’s discussion, the detailed ‘Regional Development Pledge Implementation Plan’ will be announced tomorrow.