2023-12-12 12:25:10
Illustration = Lee Cheol-won
McKinsey, a global consulting firm that attracted a lot of attention in 2013 by comparing the Korean economy to a ‘frog in a pot’ that is slowly heating up, published a report saying, “The Korean economy is facing the limits of growth,” and released its first follow-up report in 10 years. issued. In a report titled ‘Korea’s next S-curve’ on the 11th, McKinsey said, “The temperature of the boiling water in the pot has risen further due to declining labor productivity and intensifying global competition in the country’s basic industries.” “It is time to boldly take the frog out of the boiling water and out of the pot, rather than waiting for it to go down,” he argued. This means that a new leap forward can be expected only following major changes to the framework of the Korean economy. McKinsey said, “We need to create a framework so that frogs can play freely on a bigger stage,” and added, “Bold attempts and changes will enable Korea to leap forward into the world’s 7th largest economy with a GDP per capita of $70,000 in 2040.” “It is,” he said.
Graphics = Yang Jin-kyung
◇Global leading technologies sharply decreased from 36 to 4 in 8 years
McKinsey found the problems of the current Korean economy to be low labor productivity and industrial competitiveness. Korea’s weekly working hours are 36.9 hours, which is longer than developed countries such as the United States (34.6), the United Kingdom (29.3), and Germany (25.7), but the GDP per working hour is $52.4, which is lower than Germany (87.3), the United States (87.2), and the United Kingdom (74.3). Significantly low. The gap in labor productivity between large corporations and small and medium-sized enterprises was also pointed out as a factor hindering economic growth, with the top 10 groups accounting for 20% of the employed workforce accounting for 60% of GDP. McKinsey diagnosed, “This means that Korea works longer hours in a less productive way than other developed countries, or that Korea’s industrial structure is focused on low-value-added sectors.”
Korea’s industrial competitiveness is also weakening. In 2012, Korea was evaluated as ‘leading’ in the global market in 36 fields including ‘ultra-precision display process and equipment technology’ and ‘ultra-high integration semiconductor process and equipment technology’ among 120 national strategic technologies (Korea Institute of Science and Technology Evaluation and Planning). However, in 2020, it was evaluated as leading in only four fields, including ‘high-capacity long-life secondary battery technology’. On the other hand, the number of fields evaluated as ‘latecomers’ increased from 1 to 13 over the same period. McKinsey pointed out, “In a situation where the technological gap with advanced countries is not narrowing, developing countries, such as China, are rapidly securing capabilities,” and added, “If Korea does not actively develop its technological capabilities, it may lose its competitiveness at the national level.”
◇50,000 AI skilled workers are needed, but there are only 5,000.
For the Korean economy to take a leap forward, McKinsey first emphasized the need for large-scale industrial structure reform. Korea’s major manufacturing industries, including shipbuilding, automobiles/mobility, and consumer goods, have secured global competitiveness through vertical integration that focuses on one industry. However, in the era of convergence and convergence where boundaries between industries are collapsing, the structure needs to be reorganized to collaborate with other industries. For example, autonomous ships must combine various technologies such as autonomous driving, Internet of Things, big data, and advanced sensors. Since shipbuilding companies do not have all the technologies, they need to create an ecosystem by collaborating with companies and startups with specialized technologies.
McKinsey emphasized that the government’s role is also important in reorganizing the industrial structure. We will focus on nurturing industries with high added value, such as software, content, and platforms, and use them as new growth engines. We will secure source technologies by actively supporting industries where Korea has competitiveness and high growth expectations, such as energy, pharmaceuticals/bio, fashion, and textiles. It has to be done.
McKinsey said that in a situation where competition in generative AI (artificial intelligence) triggered by ChatGPT is intensifying, efforts should be made to foster talent, such as nurturing 50,000 high-level AI human resources. According to the Ministry of Employment and Labor, the demand for AI human resources will reach 66,000 by 2027, but the supply will only amount to 53,000, of which only 5,000 are highly skilled workers. McKinsey said, “Considering that technological barriers are high and the speed of development is fast, it has become more important to secure core AI talent, focusing on high-quality human resources.” Song Seung-heon, CEO of McKinsey Korea, who oversaw the report, said, “There is no way out for the Korean economy anymore,” and added, “The only way for Korea to survive is through radical and bold change.”
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