Korea’s Industrial Productivity Lowest in OECD

It has been pointed out that Korea has the lowest industrial productivity out of all OECD countries and is falling behind its major competitor, Japan, in all aspects of technology. Korea is even behind China in some technology sectors.

The Korea Chamber of Commerce and Industry’s report on “The actual state and improvement task of Korea’s industrial productivity” showed that Korea’s current hourly productivity according to its GDP was 37 percent of the U.S.’ in 2002. This is much lower than Japan, which was 72 percent of the U.S.’, and U.K., which was 79 percent, and thus Korea is at the very bottom of all OECD countries.

Moreover, the intellect-based manufacturing industry, which requires moderate to high level technology, accounted for seven percent of the domestic industry, higher than the OECD’s average of 5.2 percent. However, the intellect-based service industry accounted for 4.2 percent, lower than the OECD’s average of 6.3 percent. Therefore, the inequality among the industries is serious.

The technology sector’s competitiveness is worrisome. Setting Japan as the benchmark with 100, Korea’s technology fell far behind with: human resource at 84.8, production skill at 82, industrial skill (patent) at 10.5, technological achievement according to the number of research papers and acknowledged thesis at 15, and total amount of research at 11.4.

In particular, in three sectors of the human resource, technical achievement, and total amount of research improvement, China received ratings of 134.2, 27.8, 43.4 respectively compared to Japan, surpassing Korea.

The report also stated that although Korea’s main industries—semiconductors, cars, ship building, and steel—occupy the top six spots in world market share, their quality competitiveness is very weak as the non-memory semiconductor sector has a world market share of only 1.6 percent and special ship building has below 30 percent (whereas Japan has 70 percent).

Keuk-In Bae bae2150@donga.com