Deputy Prime Minister and Finance Minister Hyun Oh-seok said Thursday that the government would undo “any discriminative policies” against the services sector and provide the same support to the industry as it had to the manufacturing sector.
This is part of efforts to boost productivity in the services industry and achieve a 70 percent national employment rate.
Although the services sector has created more jobs than the manufacturing sector over the years, its productivity falls well behind the OECD average and local manufacturing, according to the Finance Ministry.
The sector created about 17 million jobs in 2012 ― compared to the manufacturing industry’s 4 million ― but its productivity, measured by output per worker, recorded only about 39 million won ($34,200) in that period, compared to manufacturing’s 85 million won.
The government aims to balance and narrow this gap between the two industries by offering the same tax breaks and benefits to small and medium enterprises that contribute to job creation and growth in the services sector as SMEs enjoyed in the manufacturing sector.
The deputy prime minister added that the government planned to offer cuts in public utility fees such as electricity, gas and water so that services companies would bear the same burden as those in the manufacturing industry where companies had been charged relatively lower fees.
The government’s first set of measures aimed at boosting services productivity will focus on laying the infrastructure or support mechanism. It will then draw up further details regarding tax benefits as it seeks to refine its comprehensive tax codes, the finance minister said.
Minister of Science, ICT and Future Planning Choi Mun-kee said that it would further strengthen the information protection and security industry, part of the services sector, as new growth engine and to counter growing threats in cyberspace.
Korea, prone to unconventional threats from North Korea, has seen shortages of manpower and investment in the cyber-security industry despite the global information protection security markets growing over 10 percent annually. The country accounted for only 2 percent of the global market.
As smart devices become prevalent and demand for online security increases, Minister Choi said that the government aimed to double the domestic market size by 2017 from $4.2 billion in 2012.
Also, the ICT ministry will foster 5,000 professionals in the field by 2017, with the aim of Korea providing one of the top 10 information protection and security services worldwide.
Under the government’s support measures for the services industry, the Ministry of Culture, Sports and Tourism said it would work to increase the domestic content market size from 88 trillion won to 120 trillion won over the next five years.
This is in line with efforts to create 80,000 jobs and increase exports of smart and entertainment content worth $10 billion by 2017.
The ministry said it will set up a 1.8 trillion won fund to invest in the development of creative ideas and content using high-convergence technologies such 3-D, computer graphics and holograms.
By Park Hyong-ki (email@example.com