'When Life Gives You Tangerines' Goes Global, Boosts High-Quality Youth Employment

Expansion of High-Quality Youth Employment Driven by IT and Content Service Exports
Service Exports Play a Key Role in Job Market Stabilization
Rising Overseas Demand for Korea’s High Value-Added Services Spurs Domestic Job Growth
Policy Support Needed to Sustain Growth and Create Quality Jobs

It has been found that the increase in Korea's service exports has led to a rise in high-quality jobs for young people. Service exports refer to exports generated through the popularity of Korean dramas on Netflix, overseas companies using Korean IT companies' cloud services, and Blackpink holding concerts abroad. As the importance of services in exports continues to grow, there is an analysis that policy support for high value-added service exports, such as IT and content, should be expanded.

The Bank of Korea stated this on the 19th through its blog post titled "Does an Increase in Service Exports Create High-Quality Jobs?" published on its website. Park Youngjin, head of the Input-Output Team at the Economic Statistics Department 2 of the Bank of Korea, explained, "Compared to 2020, the number of employed people in Korea (converted to full-time equivalents) increased by 996,000 in 2022, and 82.5% of this increase was driven by exports." He added, "Of the employment induced by exports, more than half-50.9%-was due to service exports." He explained that during the COVID-19 pandemic, when sluggish domestic demand put downward pressure on the domestic job market, the employment-inducing effect of service exports helped significantly ease this pressure.

Park pointed out, "The background for the large number of jobs created by service exports was the export of IT and content-related services." As the digitalization of the economy progressed, exports of broadcast program and advertisement production, online video services (OTT), IT system management, and databases increased. The number of jobs induced by IT and content-related service exports grew at an average annual rate of over 70% from 2020 to 2022. Considering that the average annual growth rates of employment induced by service exports and manufactured goods exports during the same period were 15.1% and 4.8%, respectively, this is a remarkably high level.

IT and content-related service exports especially generated 'high-quality' jobs. Park noted, "Looking at the characteristics of employees in this sector, the proportion of highly educated, highly skilled, and regular workers is high, meeting the general criteria for quality jobs." He also pointed out, "Compared to manufacturing or other services, the proportion of young workers is higher in this sector."

Service exports have not only helped alleviate youth employment issues but also contributed to stabilizing the job market. Generally, even if demand for the service industry increases, the number of jobs indirectly induced in other sectors is limited. However, the indirect employment induction rate in IT and content-related sectors is higher than in other service sectors. Park explained, "For example, even if Tanghulu becomes popular and many Tanghulu shops open, there are not many indirectly induced jobs in the economy besides the shop employees. However, to produce a show like 'When Life Gives You Tangerines,' which recently gained popularity thanks to actors IU and Park Bogum, a significant number of jobs are indirectly created in various fields, including cast members, managers, camera, lighting, and props manufacturers, and OTT platform operators and managers."

It has been found that overseas markets generally demand Korea's high value-added services. According to the Asian Development Bank (ADB), major export partners such as the United States, China, and Japan mainly demand Korea's service products in the areas of transportation and producer services. Transportation services include freight transport related to goods exports and imports, as well as passenger transport for travel. Producer services are represented by IT and content-related services. In particular, demand for Korea's producer services has increased significantly in the United States. Park said, "Since producer services have a high value-added effect, the increase in overseas demand for Korea's producer services contributes to raising the added value of the Korean economy."

Looking at the number of domestic jobs created by final overseas demand for Korean services by country (as of 2022), China led with 234,000 jobs, followed by the United States with 63,000, and Japan with 29,000. In particular, the rapid increase in domestic employment was driven by rising demand for Korea's producer services in the United States.

Park emphasized, "The recent increase in service exports has had a positive impact on the qualitative improvement and stabilization of the job market by expanding domestic employment." He added, "The importance of services in Korea's exports is growing, so this effect is likely to continue in the future." He also assessed that the significant overseas demand potential for high value-added industries such as producer services could provide opportunities not only in major markets like China and the United States but also in new markets such as Southeast Asia. He said, "With growing uncertainty in the trade environment for goods due to global supply chain fragmentation and the strengthening of protectionism, expanding exports of high value-added services such as IT and content can provide new opportunities for the Korean economy." He added, "It is necessary to create quality jobs and establish a foundation for sustainable growth through active policy support, such as investment in high value-added service exports and the provision of vocational training."