Korea’s future prosperity depends on skills

by Andreas Schleicher
Director, OECD Directorate for Education and Skills

 Productivity gains of better matching the skills acquired in education with those required on the job are potentially large for Korea, 2012

The Korean economy has seen significant growth in the past decades.

However, much of the economic growth has been supported by intensive labour resource utilisation. Korean workers work the second longest hours among OECD countries. This is not sustainable in the long-term because Korea’s working age population is projected to decline from 2017 onwards. The growth rate of GDP per capita is on a downward trend.

Ensuring that Korea’s economy continues on the path to growth will mean raising employment levels and increasing the labour productivity of its workforce. Skills are central to both higher employment levels and productivity growth. Better skills, effective labour market policies and stronger incentives to work and hire can raise employment levels. And improving the quality and relevance of skills, as well as the effective use of skills in workplaces, is essential for increasing productivity.

Now is the time to fully harness Korea’s economic potential, by raising productivity and developing a highly skilled workforce across all age groups. Skills and human capital must be the centrepiece of policy measures to support entrepreneurship, drive innovation and productivity while delivering inclusive growth for all.

Identifying skills challenges, together

In the course of 2013 and 2014, a multidisciplinary team of OECD experts worked in collaboration with Korean ministries and a wide range of stakeholders to assess the challenges to crafting a more effective national skills strategy for Korea. Maintaining and building upon this unique whole-of-government and whole-of-society approach will be critical for addressing the challenges identified in the OECD Skills Strategy Diagnostic Report: Korea.

Over the past decades, Korea has made significant progress in increasing participation in education and raising educational attainment levels. Korean students are among the best performing students internationally. A number of recent reforms have aimed at expanding participation in vocational education and training and building smoother pathways from education to the world of work. Korea has also introduced significant initiatives such the National Competency Standards to make skills development more relevant for the labour market. Reforms have been introduced to promote entrepreneurship and stimulate employment growth while fostering the growth of small and medium-sized enterprises and boosting the business sector.

Yet challenges remain.

Many young people are having difficulties transitioning from education to employment even with university degrees. Female employment rates decline significantly after marriage and childbirth, despite the relatively high skill and tertiary attainment levels of women in Korea. Many older workers have low skills and are forced after involuntary early retirement to become self-employed or work in non-regular positions with poor working conditions and low wages. There remain many barriers and disincentives to hiring and supplying skills in the labour market. More needs to be done to leverage the skills of the existing workforce to boost productivity growth and foster innovation.

Korea’s 12 skills challenges 

Today, the results of the diagnostic phase of this collaborative project are published as the OECD Skills Strategy Diagnostic Report: Korea.

With regard to developing relevant skills, the report concludes that Korea should focus its efforts on:

  • Tackling the overemphasis on academic studies and higher education
  • Fostering entrepreneurship and skills for a creative economy
  • Enhancing adult skills through lifelong learning and education

When it comes to activating its skills supply, Korea will need to tackle the challenges of:

  • Activating women while balancing work and family life
  • Facilitating the school-to-work transition for youth
  • Activating older workers while improving their skills and welfare 

Furthermore, Korea could make more effective use of the skills it has by:

  • Improving the quality of current and future jobs
  • Reducing skills mismatches by making skills visible and using skills effectively
  • Identifying and anticipating skills needs to make effective use of skills

Finally, Korea could strengthen its overall skills system by:

  • Promoting policy coherence and inter-linkages
  • Strengthening the whole-of-government and whole-of-society approach to address skills
  • Improving the coordination and collaboration across levels of government to improve skills outcomes.

Taking action on skills

The pressing need for a whole of government approach to skills emerges clearly in the case of Korea. None of these skills challenges can be tackled by ministries working in isolation, nor can they be solved by government alone. Korea’s stakeholders and civil society will need to play a more active role in developing and implementing skills policies that deliver sustainable results over the long term.

Moving from diagnosis to action will require close coordination and greater efforts to measure progress and ensure accountability for results. In doing so, the OECD stands ready to support Korea as it designs and implements better skills policies for better jobs and better lives.

OECD Skills Strategy Diagnostic Report: Korea
Executive Summary in English
Executive Summary in Korean
12 Skills Challenges for Korea PPT
See also the country page on skills for Korea
OECD Skills Strategy
Survey of Adult Skills (PIAAC)
OECD Skills Outlook 2015: Youth, Skills and Employability
For more on skills and skills policies around the world, visit: skills.oecd.org
Chart source: ©OECD

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