Nation's ranking stuck at 26 for four years in WEF report
By Yoon Ja-young
Korea's overall world competitiveness remained unchanged for the fourth consecutive year, a report by the World Economic Forum (WEF) showed Wednesday.
According to the annual Global Competitiveness Report, Korea ranked 26th among 137 countries.
The report measures competitive edge in terms of "basic requirements," "efficiency enhancers" and "innovation and sophistication factors," which are categorized into 12 pillars comprising 114 components.
The evaluation on Korea is based on analysis of statistics as well as a survey of 100 CEOs of conglomerates and SMEs.
Korea ranked 11th in overall competitiveness in 2007, a record high, but has since been sliding, stopping at 26th for four years since 2014.
Switzerland continued to top the ranking, followed by the United States, which moved up one notch from the previous year. Singapore ranked third falling from the second spot. Germany ranked fifth, while the United Kingdom stood at eighth and Japan got the ninth spot. China is trailing right behind Korea, rising to 27th from 28th from the previous year.
The WEF noted Korea presents large disparities between pillars of evaluation. While it fared well in terms of basic requirements such as macroeconomic environment and infrastructure, it remained sluggish in efficiency enhancers.
"Its performance is largely driven by its remarkable infrastructure (eighth) and a highly favorable macroeconomic environment (second). This year's political turmoil and corruption scandals highlighted the challenges in the country's institutional environment, yet the score of the institutions pillar advanced marginally," it noted in the report.
The labor and financial markets remain Korea's biggest weaknesses.
"Another area in which Korea consistently underperforms is labor market efficiency, in which it ranks 73rd, hiding deeper challenges with regard to labor market flexibility - in which it ranks 106th - caused notably by conflictual labor-employer relations and high redundancy costs," it said.
Korea ranked 130th in terms of cooperation in labor-employer relations, 112th in redundancy costs, and 90th in female participation in the labor force. It was also poor in hiring and firing practices, ranking 88th, and stood at 62nd in terms of flexibility of wage determination.
Korea ranked 74th in overall financial market development, doing especially poorly in the soundness of banks and ease of access to loans as well as availability of financial services, ranking below 80 among the 137 countries evaluated.
The WEF advised Korea to make efforts in innovation to remain in the top group. "Korea, while still in the top group in innovation, appears to have lost ground," it noted.
It added Korea should expand investment in human capital and accelerate efforts for innovative growth.
The country's finance ministry noted it needs to strengthen dynamism in the labor market, attaining stability and flexibility at the same time. It also plans to put more emphasis on productivity.
The government plans to resume a committee on national competitiveness next month to set up an agenda for improvement.
By Yoon Ja-young
 |
According to the annual Global Competitiveness Report, Korea ranked 26th among 137 countries.
The report measures competitive edge in terms of "basic requirements," "efficiency enhancers" and "innovation and sophistication factors," which are categorized into 12 pillars comprising 114 components.
The evaluation on Korea is based on analysis of statistics as well as a survey of 100 CEOs of conglomerates and SMEs.
Korea ranked 11th in overall competitiveness in 2007, a record high, but has since been sliding, stopping at 26th for four years since 2014.
Switzerland continued to top the ranking, followed by the United States, which moved up one notch from the previous year. Singapore ranked third falling from the second spot. Germany ranked fifth, while the United Kingdom stood at eighth and Japan got the ninth spot. China is trailing right behind Korea, rising to 27th from 28th from the previous year.
The WEF noted Korea presents large disparities between pillars of evaluation. While it fared well in terms of basic requirements such as macroeconomic environment and infrastructure, it remained sluggish in efficiency enhancers.
"Its performance is largely driven by its remarkable infrastructure (eighth) and a highly favorable macroeconomic environment (second). This year's political turmoil and corruption scandals highlighted the challenges in the country's institutional environment, yet the score of the institutions pillar advanced marginally," it noted in the report.
The labor and financial markets remain Korea's biggest weaknesses.
"Another area in which Korea consistently underperforms is labor market efficiency, in which it ranks 73rd, hiding deeper challenges with regard to labor market flexibility - in which it ranks 106th - caused notably by conflictual labor-employer relations and high redundancy costs," it said.
Korea ranked 130th in terms of cooperation in labor-employer relations, 112th in redundancy costs, and 90th in female participation in the labor force. It was also poor in hiring and firing practices, ranking 88th, and stood at 62nd in terms of flexibility of wage determination.
Korea ranked 74th in overall financial market development, doing especially poorly in the soundness of banks and ease of access to loans as well as availability of financial services, ranking below 80 among the 137 countries evaluated.
The WEF advised Korea to make efforts in innovation to remain in the top group. "Korea, while still in the top group in innovation, appears to have lost ground," it noted.
It added Korea should expand investment in human capital and accelerate efforts for innovative growth.
The country's finance ministry noted it needs to strengthen dynamism in the labor market, attaining stability and flexibility at the same time. It also plans to put more emphasis on productivity.
The government plans to resume a committee on national competitiveness next month to set up an agenda for improvement.
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