President Park Geun-hye on Monday pledged to complete her reform drive, stressing that it would create a new environment for Korean exporters facing both internal and external challenges.
In a speech delivered at the annual Trade Day, Park also urged to foster start-up exporters and industrial convergence with information technology in order to improve the nation’s trade competitiveness.
“(The government) will improve the country’s trade competitiveness and strengthen the economy by wrapping up four major reforms, including labor and finance, as soon as possible,” Park said at the event hosted by Korea International Trade Association at Coex in southeast Seoul. The reforms are aimed at eradicating unnecessary practices and regulations in labor, public, finance and education sectors.
Park also called for boosting productivity by leveraging IT in the manufacturing sector, and encouraging small and medium-sized companies to boost exports.
“One of the new blue oceans for Korean trade is the effective use of IT in the service industries, as we see in digitalized government system, intelligent transportation system, plant management and digitalized hospitals,” Park said.
“At present, only 86,000 small and medium exporters, or only 2.7 percent of the country’s around 3 million SMEs, have made successful inroads into overseas market.“ Their export translates to about one-third of the country’s total exports.
Her remarks came as South Korea continues to struggle with faltering exports.
Since 2011, the country’s total annual trade has topped $1 trillion. This year, however, exporters have faced a hard time, and it is unlikely to reach the mark. In the January-November period of this year, Korea’s export volume fell to $484.6 billion, down 7.6 percent from a year ago, according to KITA’s data. Imports also fell, down 16.6 to $401.4 billion.
Trade surplus reached $100 billion to set a new record, yet the shrinking of the trade pie itself has led to gloomy forecasts about the country’s sustainable growth potential.
Although the global economic slowdown has had a negative impact on the Korean economy and exporters, KITA has confidence in Korea’s strong presence in the global trade scene -- with some extra policy efforts.
KITA said in its latest report that Korea should turn to ways of developing innovative, value-added products, shifting its focus from traditional ideas of expanding trade volume.
“For K-Trade 4.0 to succeed, we need government support to foster a start-up friendly business environment,” said Jang Sang-sik, a senior researcher at the future strategy research unit of the KITA. To raise the competitiveness of Korean manufacturers, the researcher saw great potential in connecting promising small manufacturers to international trade companies.
Easing corporate regulations is another crucial part of the K-Trade 4.0, according to Jang. “Efficient restructuring and corporate overhaul are what Korean business corporations find the most pressing and necessary at this moment.”
An innovative business environment calls for a strong trilateral partnership among industries, universities and institutes, as well as business collaboration between manufacturers and trade companies, according to the report.
By Chung Joo-won (firstname.lastname@example.org