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Productivity stagnation in service industry and policy implications for sustained economic growth

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Frame of Image ice industry is highly associated with a productivity stagnation in the overall Korean economy due to the lack of internationally tradable service goods and an unlikely surge in service productivity. This article examines the relationship between Korea s service industry growth and the productivity stagnation in Korea. Furthermore the article presents important policy implications for this issue. Measured in terms of real value, Korea s service industry has not been showing a clear increase in production. Only nominal production is rapidly increasing due to rising service prices. On the other hand, in terms of labor input, more people a r e transferring to the service industry. Consequently, productivity stagnation and expansion of labor employment are worsening the productivity of the service industry. This is potentially problematic considering that when such labor t r a n s f e r s to the service industry becomes full fledged, productivity stagnation in the service industry may become a huge burden on the productivity of the overall economy. Accordingly, from a policy perspective, the productivity must be improved within the service industry itself through such means as providing support for research and development. Considering the service industry s linkage effect with other industries, this spillover effect is expected to promote the productivity for the Korean economy.
1. Introduction
The service industry is attracting much attention in many aspects. Under the proposit


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Title Productivity stagnation in service industry and policy implications for sustained economic growth
Similar Titles
Material Type Reports
Author(English)

Ha, Bong Chan

Publisher

[Seoul]:Korea Institute for Industrial Economics & Trade

Date 2006
Journal Title; Vol./Issue KIET Industrial Economic Review:vol. 11(no. 5)
Pages 7
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Economic Conditions
Industry and Technology < General
Holding KIET; KDI School

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