'Digital New Deal' imperative for future of Korea

The Korean Productivity Center Chairman Noh Kyoo-sung speaks during an interview with The Korea Times at his office in Jongno, Seoul, on Jan. 16. / Courtesy of KPC

By Kim Jae-heun

South Korea has been witnessing the steady decline of its economic growth rate since the country encountered financial crisis in 1997. The rate has been falling by 1 percentage point every five years to record 5 percent in 2000, 4 percent in 2005 and 3 percent in 2010.

In the last decade, the government took defensive measures to keep the rate of economic growth in the 2 percent range and has achieved a national per capita income of over $30,000 in 2018. Korea became the seventh country in the world with a population over 50 million to do so.

However, like Japan, Spain and Italy, Korea has failed to find its next growth engine that would at least maintain this rate. Last year, Korea's economic growth marked 2 percent; the lowest in 10 years.

But the Korea Productivity Center (KPC) Chairman Noh Kyoo-sung, whose agency trains and consults local firms and the government to encourage improvements in productivity, is offering a new strategy of national economic growth ― the “Digital New Deal.”

The “Digital New Deal stands on the basis of intelligence information technology, which will create new markets and solve the issue of polarization,” said Noh during an interview with The Korea Times on Jan. 16. “When I say polarization, I am talking about the economic gap between the capital city and other local areas and the gap between major companies and small and medium-sized enterprises. The wage differential between rich and poor is also a problem.”

“The most urgent task is to disperse the concentrated population and businesses to outside the capital area. All the opportunity and capital are saturated in Seoul. We need to balance them out and moving public firms and major companies' affiliates to local regions will make the start,” Noh said.

The chairman said next comes digital transformation.

Major companies here have already became familiar with the process of using digital technologies to create new business processes, culture, and customer experience to meet changing business and market requirements.

Medium-sized firms are well aware but face difficulties applying the concept.

“We've developed a methodology for medium-sized firms' digital transformation to foster hidden champions. The aim is to obtain the maximum effect with minimum investment. Besides, we are helping firms to digitalize the manufacturing industry and expand the smart-factory system,” Noh said.

To foster more local hidden champions, the KPC signed an MOU with various universities in the United States, Europe and the Middle East to incubate promising start-ups which came into effect last year.

“Purdue University has agreed to open a center with us to raise venture businesses there starting March. We will send Korean students to America, where they will learn the latest technology trends at Silicon Valley and make global connections,” Noh said.

“The KPC will play the coordinator's role to attract venture capital investment for students, who learn to create start-ups at Purdue University, the State University of New York and the Plug and Play Tech Center,” Noh added.