Jo Dong-chul, KDI President: "Productivity Improvement Will Be the Only Pillar of Our Economy"

Conference on "Reform Measures to Enhance Productivity in the Korean Economy" Held on the 11th

Jo Dong-chul, President of KDI (Korea Development Institute), emphasized that “in a situation where growth driven by the input factors of labor and capital has reached its limits, improving productivity across society will be the only pillar supporting the dynamism of our economy.”

On the 11th, KDI held the 2024 KDI Conference under the theme “Reform Measures to Enhance the Productivity of the Korean Economy” at the JW Marriott Grand Ballroom in Seoul. In his opening remarks, President Jo stated, “Through this conference, I hope to present key structural reform tasks within the framework of improving productivity across society and contribute to achieving healthy development of our society.”

Prime Minister Han Duck-soo delivered a congratulatory message, saying, “In these times of many domestic and international difficulties, I am confident that if we revive our dynamism and cohesion, we can overcome any crisis,” and added, “I hope that the various policy proposals from today’s conference will undergo social discussion and become a solid foundation for national development.” Prime Minister Han was unable to attend the conference due to an urgent parliamentary inquiry session held in the afternoon.

Nam Chang-woo, Research Director at KDI, said, “The total factor productivity, which is the driving force of our country’s economic growth and the efficiency of the economic structure, is rapidly declining,” and noted, “Labor productivity in service-related small and medium enterprises is very low.” He suggested that since enhancing economic growth drivers increases the likelihood of securing social stability, reform measures are needed within three frameworks: rational allocation of production resources, enhancement of creative innovation, and expansion of robust social capital.

Yang Yong-hyun, Head of the KDI Regulatory Research Office, stated, “Well-designed regulations increase productivity, but it is important to promptly improve regulations that hinder productivity enhancement due to lagging behind social changes.” He emphasized, “For regulatory reform of new technologies and new industries, improvement of the regulatory sandbox and active coordination by the Presidential Office are necessary,” and added, “Along with improving entry regulations in the professional services market, a shift from uniform regulations to autonomous regulations is needed.”

Kim Min-seop, Research Fellow at KDI, stressed, “It is important to enhance labor market flexibility and stability in response to rapidly progressing industrial restructuring and demographic changes.” He proposed a gradual reform approach that increases labor market flexibility through adjustments in employment protection, flexible working hours, and wage system reform, secures stability by alleviating the dual structure and strengthening employment safety nets, and applies changes in protection levels and conditions starting from new employment contracts.