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Rigid labor, education hinder human development
By Park Hyong-ki
South Korea has been locked in an "education paradox" with the country spending huge amounts on educating and training young people only to see their global competitiveness getting left behind year after year.
Simply put, they are highly-educated but ill-equipped to bring value to the economy. In addition, the nation has a poor system to fully utilize its manpower and prepare for the Fourth Industrial Revolution.
The gloomy picture is evident in the 2019 global talent competitiveness index announced by INSEAD, one of the world's leading business schools.
Korea ranked 30th out of 125 countries in the index; the same as last year, but lower than in 2017 when it ranked 29th.
On the surface, the country has an abundant pool of highly educated people with knowledge and skills that could have a "positive impact" on the market.
But beneath this, the economy does not make good use of the human capital because of rigid labor regulations, gender inequality and the lack of social mobility.
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Basically, the economy does not develop men and women to their full potential, nor can it attract highly talented global professionals.
And analysts say this is because the government has been sticking to an aging education policy and system that continues to promote rote learning and encourages students to become civil servants rather than entrepreneurs.
This rigid social and educational environment will further produce job mismatches in the long run, they said.
"We have still got the same education ministry doing the same thing as always, just preparing students to take college entrance exams for their whole life, instead of re-creating schools to foster future innovators, problem-solvers," said Kim Tae-gi, an economist at Dankook University.
"There are even mismatches among government agencies. Seriously, the education ministry should be named the ministry for college exams, and the labor ministry should be called the ministry for labor unions. Also, the security and public administration ministry should be called the ministry for civil servants."
Businesses and even workers have been highly aware of the problem that the rigid labor environment has been hindering the growth of human capital over the past years, he added.
Even the problem concerning the education system that produces so-called "fish-shaped buns" has been around for ages.
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Business and labor cannot change this. Kim said government policies have to rebuild and re-create the system so that it can help develop human resources for the new technological age.
But current education and labor policies have worsened the labor market, making it harder for those highly educated people to get hired, let alone use their potential talent freely anywhere, the analysts noted.
A wage structure that does not reflect individual productivity is another problem, weighing on the country's economic competitiveness, they said.
"This hinders the mobility of human capital here," said Sung Tae-yoon, an economist at Yonsei University.
The index is assessed by what countries do to produce and acquire talent, and the kind of skills that are available to them. It is aimed at helping economies design and implement better policies in areas such as education, employment and immigration, INSEAD states.
Switzerland, Singapore, the United States, Norway and Denmark have continued to dominate at the top of the global talent index. The business school issues the index in partnership with Adecco and Tata Communications.
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