[Dynamic Economic Roadmap] Breaking Entry Barriers to Create the World's Best 'Competitive System'

The government will begin efforts to break down market entry barriers and establish a fair compensation system to realize a dynamic economy. It plans to raise the regulation index, which is among the lowest in major countries, to a mid-level range and accelerate the introduction of the job-based pay system.

On the 3rd, the Ministry of Economy and Finance announced the "Dynamic Economy Roadmap" containing these details. The ministry will commission research in the second half of this year to identify the current status of entry regulations and competition-restricting regulations, and prepare improvement measures by next year. For tasks where consultations are delayed or require reconsideration, the use of social conflict resolution bodies will be considered. Additionally, to create an advanced competition system, the government plans to improve the victim relief system and investigate systems and practices that affect market competition, including various associations and organizations.

Kim Byung-hwan, First Vice Minister of the Ministry of Economy and Finance, is explaining the Dynamic Economy Roadmap at the Sejong Government Complex on the 1st. Photo by Ministry of Economy and Finance

Through this, entry regulations will be rationalized to the level of major advanced countries. According to the OECD's product market regulation index, Korea ranked 33rd out of 38 countries in 2018, placing it near the bottom, but the goal is to rise to the mid-level by 2033. The domestic competition system level will be raised to the world's highest by 2027. The Fair Trade Commission has been rated "very excellent" in the UK's Global Competitiveness Report (GCR) since 2018, and aims to elevate this to the highest grade.

The wage compensation system will also be revised. This is based on the judgment that corporate competitiveness is declining due to the still high adoption rate of the seniority-based pay system and large wage gaps. First, the government plans to lead the expansion of job-based pay introduction through the public sector. Currently, only 109 public institutions have introduced job-based pay, but this will increase to 200 by 2027. For private companies, support for related infrastructure will be strengthened. A one-stop system will also be created to provide integrated support for establishing wage systems in small and medium-sized enterprises and mid-sized companies.

At the same time, an efficient environment that allows concentration on work capabilities will be established. There is a need to improve labor productivity by alleviating long working hours, promoting work-life balance, and responding to diverse industrial demands. The current date-based holiday system varies by year, so improvement measures such as substitute and day-of-week holidays will be reviewed. Research will also begin on various advanced country-style work and rest systems, such as granting options for break times or changing the wage payment system to twice a month.