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South Korea's labor productivity growth continues to slow, especially in the manufacturing sector,...which the country heavily relies on.
Our Kim Da-mi explains some of the reasons behind the slowdown.
Labor productivity shows the output of a country's economy, and is mainly affected by investment, innovation and human capital.
According to recent data from the Bank of Korea,...because of a lack of innovation in the manufacturing sector, the rate of increase in South Korea's labor productivity is slowing.
The country's manufacturing labor productivity growth rate slowed by almost six-percentage points following the global financial crisis in the late 2000s.
Its total labor productivity growth for the 2011 to 2015 period, including the service sector, also slowed to half its growth rate for the 2001 to 2007 period.
Despite the slowdown, Korea's labor productivity is still increasing, unlike the OECD as a whole, which saw average labour productivity fall by zero-point-nine percent from 2011 to 2015.
South Korea's slump was especially large in the high technology sector, which includes the country's semiconductor and display industries.
The report suggested that the output growth slowed due to the lack of innovation and new innovative companies entering in the industry,... despite South Korea's dominance of overseas markets and expansion of value-added products.
"To improve productivity, equipment investment needs to be modernized. Along with active investment in equipment, technical training should be consistently provided to workers."
As the high technology sector has led the country's economic growth since the financial crisis, recent low labor productivity raises concerns over the country's weakening international competitiveness and could be a burden on the economy in the future.
KIM Da-mi, Arirang News.
