[Asia Exclusive] "The Economic Solution After COVID-19 Is Exactly the 'Digital New Deal'"

Interview with Noh Kyuseong, Chairman of Korea Productivity Center
Digital Economy Transition Due to COVID-19... Infectious Disease Crisis as a New Opportunity
Promoting Digital-Based Work Innovation... Productivity Center to Support Strengthening SME R&D Capabilities

Chairman Noh Gyu-seong of the Korea Productivity Center is being interviewed on the 9th at the Korea Productivity Center in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

"The novel coronavirus infection (COVID-19) crisis has served as an opportunity to confirm South Korea's competitiveness through advanced digital-based responses, a high-quality medical system, and civic awareness. If we seize this opportunity well and swiftly promote South Korea's digital transformation, it can become another economic solution to prepare for the future. This is the 'Digital New Deal.'"

No Gyuseong, Chairman of the Korea Productivity Center (photo), emphasized that not only COVID-19 response strategies but also 'post-COVID' strategies must be established together. While we must make our best efforts to end COVID-19 immediately, South Korea, which is evaluated as a model case in responding to COVID-19, can welcome the post-COVID era ahead of other countries, so preparations for this should be expedited, according to Chairman No.

Although the pace of change accelerated rapidly due to the pandemic, promoting various levels of change based on digital technology has been a topic Chairman No has consistently advocated. The 'Digital New Deal' he proposed in January this year, before the spread of COVID-19, presents a direction on how to prepare for the post-COVID era. Since his inauguration in 2018, the Korea Productivity Center has also promoted public functions and strengthened global capabilities centered on spreading 'digital transformation.' Chairman No said, "The Productivity Center's digital transformation is progressing well as planned and is in the final stage of completion this year, and efforts to digitalize small and medium-sized enterprises (SMEs) are expanding." On the afternoon of the 9th, at the Korea Productivity Center headquarters in Jeokseon-dong, Jongno-gu, Seoul, we heard Chairman No's thoughts on digital transformation and post-COVID strategies.

- COVID-19 has brought many social and economic changes.

▲ Already, due to COVID-19, non-face-to-face (untact) consumption has been activated, accelerating the transition to a digital economy, and minimizing contact has led to the rise of online shopping, remote work, telemedicine, and video education. Because society and the economy have been forced to operate digitally, the digital capabilities of social members have also increased. As the period of restricted movement due to the pandemic lengthens, digital-based contact will become more active. Areas such as telemedicine, which had been progressing slowly, are likely to advance one step further. After the end of COVID-19, the transition to the Fourth Industrial Revolution in various countries is expected to accelerate further. The COVID-19 crisis can become a new opportunity to accelerate digitalization.

- If the core of the post-COVID era is digital-based change, how should we prepare for it?

▲ First, companies must promote digital-based working methods and business innovation. Many companies have experienced telecommuting and staggered working hours this time. Changes in work styles can induce innovative changes in employees' work-life balance and productivity. As initial confusion is resolved and digital infrastructure is established, more diverse forms of smart work will become possible, and the effects of innovation will increase. Also, digitalization can be used to seek solutions to various social problems. We experienced this time that diversification of work styles can solve social issues such as traffic and the environment. Moving away from uniform work styles can save time and energy spent commuting, and attempts can be made to activate the sharing economy, such as smart work centers.

In terms of education, edutech should be activated. Education should be improved in a way that integrates and activates online and offline education, and policy support such as infrastructure construction is necessary. By incorporating digital new technologies such as big data, artificial intelligence, virtual reality/augmented reality, 3D, and robotics into education, personalized education tailored to individual levels will be possible, and educational effects will increase through new learning experiences.

- How should the government prepare for the post-COVID era?

▲ The government should promote South Korea's digital innovation through continuous institutional improvements and financial support. For economic recovery, I believe we must move toward a digital New Deal rather than a traditional New Deal. The government announced 100 trillion won in financial support this time, which is a kind of financial New Deal to prevent corporate bankruptcies. The financial New Deal should not merely prevent corporate bankruptcy crises but should transition to a digital New Deal. Through benefits such as reduced interest rates on applied loans and partial exemptions, it is possible to consider ways to ensure that part of the support funds after COVID-19 stabilization lead to corporate digital transformation.

Noh Gyu-seong, Chairman of the Korea Productivity Center, is being interviewed on the 9th at the Korea Productivity Center in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

- Please explain the Digital New Deal in detail.

▲ The Digital New Deal is a new national growth strategy that can enhance productivity and competitiveness in our economy in the digital economy era. It is a policy based on intelligent information technology to create new markets and solve national issues, serving as a solution to regional low growth and polarization and an alternative for inclusive innovative growth during the transition to a digital economy. Major countries worldwide are already promoting national competitiveness and job creation through digital New Deal-related policies, and we must also promote a Korean-style Digital New Deal to establish a foundation to solve economic and social problems such as low growth, low employment, and polarization. The ten major tasks include regionalization of major welfare allowances and expansion of incentives, strengthening customized R&D support for regional SMEs, establishing and operating urban control systems in major regional cities, building regional data convergence complexes, introducing AI administrative services, turning crisis universities into regional R&D technology startup hubs, strengthening support for regional SMEs' overseas market development, enhancing digital competitiveness of regional manufacturing industries, building youth-friendly self-sufficient new towns, and strengthening human resource capabilities and nurturing future talents in regional SMEs.

- What is important for the successful promotion of the Digital New Deal?

▲ The Korean-style Digital New Deal aims to create new markets in regional hubs through fostering strong local companies and advancing regional specialized industries, and for success, it must be promoted in a hybrid manner with both government support and private participation. The government should play the role of priming the pump by investing large-scale finances to build infrastructure, and private sectors such as local companies should lead market creation and produce effects. Recently, issues arose regarding delivery app commission fees, but I believe it is not appropriate for the public sector to enter the market. The public sector should create a systemic foundation to reduce commissions so that small business owners can bear less burden.

- What is the role of the Productivity Center in the Digital New Deal?

▲ We need to increase the productivity of SMEs, but there are limits to labor input alone. Accelerating digital transformation is what can be changed in input factors. The role of the Productivity Center is to help SMEs establish R&D capabilities and innovation systems through various educational projects and support strengthening digital competitiveness. Especially, SMEs recognize the necessity of digitalization but often find it difficult to implement. When visiting the field, SME CEOs know the need for digital transformation but feel very lost about how to proceed at the execution stage. The Productivity Center proposes digital innovation strategies that enable SMEs to achieve maximum effects with minimal investment.

The Productivity Center has promoted smart factory construction and expansion, support for adopting productivity management systems (PMS), human resource development, and development of digital transformation methodologies for SMEs. This year, based on digital transformation methodologies, it plans to diagnose the digital level of SMEs and focus on promoting digitalization of SMEs.

Chairman Noh Gyu-seong of the Korea Productivity Center is being interviewed on the 9th at the Korea Productivity Center in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

- It has been over two years since your inauguration. Please tell us about your operational achievements so far.

▲ Since my inauguration, I have promoted strengthening public functions, spreading digital transformation, and enhancing global capabilities, achieving considerable results. In particular, I have promoted building a global startup ecosystem as an important task, laying the foundation for our innovative companies to enter the world, including the U.S., and last year, for the first time, opened two edutech centers in Indonesia and Vietnam, establishing overseas bases. This year, we plan to actively promote global startup cultivation.

- What is the Korea Productivity Center focusing on this year?

▲ We will complete digital transformation and make this year a leap toward becoming a global productivity-leading institution based on 'digital intelligence.' Although education and qualification businesses are affected by COVID-19, I believe things will gradually improve, and we are exploring various ways to make the digital transformation we have prepared ahead an opportunity.

Interview = Kim Minjin, Head of SME and Venture Department enter@asiae.co.kr

Summary = Reporter Kim Cheolhyun kch@asiae.co.kr