This study identifies options available to the Korean government when the domestic ad market is opened, following expansion of multilateral or bilateral trade in the service sector.
Interest in the ad industry has recently increased because issues in the service sector have become trade issues in the global market. Another reason is that developed countries (including the United States) have started to demand their major trading partners to open their service industry markets. Discussion between countries regarding trade in the service sector takes place through the General Agreements on Tariffs and Trade (GATT), an international organization that governs trade negotiations. Since its establishment in 1948, GATT has held 7 rounds of multilateral trade negotiations.
Despite its short history, the Korean ad industry grew rapidly: its annual growth rate from 1976 to 1986 was 25 percent. Since the overall economic growth rate was 7.5 percent during the same period, the industry achieved dramatic growth. Opening the ad market under these circumstances will generate both positive and negative effects.
Positive effects include the following: Advanced ad techniques will be introduced, which will enhance technique in the domestic ad industry. International competition will be staged in the domestic ad market, which will enhance international competitiveness of the domestic ad industry and will eventually help domestic agencies globalize. Moreover, current institutions recognized as unfair can be improved as the ad market is opened up.
On the other hand, the domestic ad industry isn't competitive enough in the global market. If the market is opened, most of the market might be dominated by foreign agencies. Korea is a country where there is no entrenched consumption culture, and there is a strong preference for foreign goods. If foreign ads that facilitate sales of goods are allowed, consumption for the foreign goods in Korea will be encouraged, and this will have an impact on the commerce industry. Moreover, there is also a concern that differences between Korean institutions and those of foreign countries could cause conflicts and confusion.
There are still challenges in opening up a domestic ad market that lacks international competitiveness, but it is not in our discretion to decide when to open it. Therefore, in Korea, the government and the industry should carefully consider policy for opening up ad market.
한국광고산업의 대외개방추진방향(Korean ad industry's plant for opening up)
|Series Title; No||정책연구시리즈 / 88-19|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < General|
|Holding||KDI; KDI School|