[How Is Your Dream?] "Self-Employed Vulnerable to External Shocks... Inherent Limitations"

'War of Alleys' Author Kim Young-jun, Economic and Business Columnist

Insufficient Support for Good Landlords and Disaster Relief Funds
Enhancing Competitiveness through High-Value-Added Services
Need for Business-Oriented Approach, Not Just Jobs

[Asia Economy Reporter Seungjin Lee] "Our country's self-employment sector has long had an inherent vulnerability to external shocks."

Kim Young-jun, an economic and business columnist and author of the bestseller "War in the Alley," which presents the limitations and solutions of the domestic self-employment market, viewed the current difficulties faced by small business owners as a virtually "foreseen" situation. Although the novel coronavirus disease (COVID-19) accelerated the timing and intensified the severity, he diagnosed it as a phenomenon that would have appeared eventually due to a lack of competitiveness.

In an interview with Asia Economy on the 8th, columnist Kim pointed out, "What enables the market to withstand shocks is economies of scale," adding, "Korea's self-employment is concentrated in small enterprises and low value-added services." For business owners with low sales and profit margins, the global COVID-19 shock has acted as a blow threatening their survival, beyond a simple recession.

He especially emphasized the need to raise the low competitiveness of self-employed people who rely solely on location to "do business." Columnist Kim said, "The minimum wage increase slowed down last year, and businesses are coping by hiring fewer people. Rent has also been declining on average as vacancy rates have steadily risen over the past three years, indicating a process of finding their own answers," adding, "To cope with the current situation and prepare for the future, self-employed individuals need to improve competitiveness by providing high value-added services that can generate high profits."

He continued, "Unlike in the past when location absolutely determined the sales of stores, it should be considered that the self-employed tenants and their businesses have a significant impact," and criticized, "A market-balanced mindset is necessary."

Regarding the government's current response for self-employed people, he expressed regret, saying, "They are measures used for ordinary recessions during an extraordinary crisis." Representative examples include the "Good Landlord" campaign, which had only a 1% participation rate, and uniform disaster relief funds that ignored the scale of damage by industry. He stressed, "Focused compensation and cash support for damages caused by business restrictions are necessary," and urged, "Discussions must proceed quickly as patience has reached its limit after already enduring 11 months."

Regarding the post-COVID-19 self-employment market, he called for a shift in perspective. It should be viewed from the standpoint of "business," not just jobs to maintain livelihoods. In particular, he diagnosed, "Many self-employed people fall short of the average level of service demanded by the market," and "They often fail to generate proper profits or barely manage to keep their stores running."

He added, "Advanced countries have shown a steady decline in the proportion of self-employment, and Korea is following that stage," emphasizing, "In the future, only those with competitiveness will survive." As restructuring and exit are expected to accelerate, he also stressed the need for government policy support. He explained, "The government must open exit routes so that self-employed people can move to wage employment," calling this "an essential condition for maintaining a healthy self-employment market."