Service Exports
The Hyundai Research Institute announced on March 13 that South Korea’s service industry accounted for 15.1% of South Korea’s total exports in the third quarter of last year while the OECD average was 29.2%.
According to its report, the former ratio edged up by 0.3 percentage points between 2006 and 2014 whereas the latter increased by 2.8 percentage points during the same period. The exports from South Korea’s service industry totaled US$112.1 billion in 2014, larger than the OECD average at US$106.7 billion, and the rate of increase was 8.1%, 2.9 percentage points higher than the average of OECD member countries.
Still, between 2010 and 2014, the rate of increase in the exports from South Korea’s service sector was 7.7% on annual average, 2.1 percentage points lower than in the period of 2006 to 2010. The OECD average fell by only 0.2 percentage points from 6.3% to 6.1% during the period. Besides, OECD member countries recorded increasing service account surpluses during the period unlike South Korea. Specifically, South Korea posted an average service account deficit of US$9.4 billion a year between 2006 and 2014 while OECD member countries recorded an average service account surplus of US$10.5 billion per year.
South Korea’s service exports were highly dependent on transport and construction and those from the segments related to information and communications technology (ICT) took up 29.7% of the total, much lower than the OECD average at 43.3%.
The institute explained that this was because the ratios of telecom, computer and information exports and financial service exports were as low as 2.7% and 1.3%, respectively. It advised that the exports be increased by the growth of new service industry segments such as smart data, fintech, Internet of Things (IoT) service and inter-industrial convergence between service and manufacturing.