Regulation of Service Sector

 

It has been shown that Korea’s service sector is regulated excessively, having 10 times more restrictions than its manufacturing sector. 

According to the Federation of Korean Industries (FKI) on February 6, the service sector is subject to 3,601 restrictions, compared to 338 for manufacturers.

The FKI said that 47.6 percent of the restrictions are on the five most promising service sectors – software, healthcare, education, tourism, and financial services.

Of these restrictions, 712 are related to financial and insurance businesses, 294 to education, and 270 to healthcare and medical services.

The FKI claimed that regulations work as the biggest obstacles to business expansion and new investments, which can, it argued, give a negative effect on job creation, the main policy goal of the incumbent administration.

President Park Geun-hye in her New Year’s press conference on January 6 emphasized the importance of creating new jobs and enhancing the competitiveness of the country’s service sector, stressing every effort will be made to remove red tape in the sector. 

An expert in the industry said, however, “One of the reasons there has been little progress over the past decades in nurturing the service sector is because of social interest conflicts blocking any meaningful push for change. Consequently, the first thing the government should do is to take affirmative action to resolve discord between various interest groups.”

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