South Korea’s dual economy: Manufacturing might vs service slump



Analysis South Korea’s dual economy: Manufacturing might vs service slump While manufacturing thrives, service sector grapples with productivity as it struggles with structural inefficiencies Peter WardAugust 9, 2023 SHARE COPY LINK FACEBOOK X LINKEDIN MASTODON An illustration of a stock market board \| Image: Korea Pro South Korea’s growth trajectory, while commendable by the Organization for Economic Co-operation and Development’s (OECD) benchmarks, reveals deeper structural economic concerns. Although the nation consistently inches closer to the advanced post-industrial countries in economic output, examining the drivers of this growth provides a clearer picture: On a per-unit-input basis, South Korea’s manufacturing sector is surpassed only by the U.S. within the OECD. Moreover, manufacturing has a more substantial representation in South Korea’s economy than in other nations. Conglomerates primarily fuel this productivity. In stark contrast, smaller firms, especially those operating in less lucrative sectors with limited capital and a shortage © Korea Risk Group. All rights reserved. No part of this content may be reproduced, distributed, or used for commercial purposes without prior written permission from Korea Risk Group. LATEST ANALYSIS 01South Korea bank hacks expose weak links beyond core financial systems 02Lee-Zelensky feud exposes South Korea’s widening Ukraine policy dilemma 03Lee Jae Myung’s ‘pacemaker’ strategy tests South Korea’s leverage with Trump 04Trump’s Korea investment victory lap masks safeguards Seoul still controls 05North Korean POW dispute tests Seoul-Kyiv trust and future Ukraine policy 06South Korea’s CPTPP push exposes the cost of turning trade gains into consensus 07AI storage boom gives South Korea battery makers an EV overcapacity lifeline 08South Korea’s Mexico strategy runs into the hard limits of USMCA politics

Analysis

South Korea’s dual economy: Manufacturing might vs service slump

While manufacturing thrives, service sector grapples with productivity as it struggles with structural inefficiencies

Peter WardAugust 9, 2023

An illustration of a stock market board | Image: Korea Pro

South Korea’s growth trajectory, while commendable by the Organization for Economic Co-operation and Development’s (OECD) benchmarks, reveals deeper structural economic concerns. Although the nation consistently inches closer to the advanced post-industrial countries in economic output, examining the drivers of this growth provides a clearer picture:

On a per-unit-input basis, South Korea’s manufacturing sector is surpassed only by the U.S. within the OECD. Moreover, manufacturing has a more substantial representation in South Korea’s economy than in other nations.
Conglomerates primarily fuel this productivity. In stark contrast, smaller firms, especially those operating in less lucrative sectors with limited capital and a shortage

South Korea’s dual economy: Manufacturing might vs service slump

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Peter Ward