The Korean social and economic context makes adult learning investments particularly important for small and medium-sized enterprises (SMEs) – i.e. firms which employ less than 250 employees. SMEs are the backbone of the Korean economy: they account for nearly all firms (99.9%) and provide 80% of all business sector employment, the second highest share in the OECD after Greece.
Yet, Korean SMEs lag behind large companies when it comes to productivity and working conditions. The productivity gap between large firms and SMEs is the largest in the OECD. SMEs also offer lower wages, less job stability, and fewer career progression opportunities compared to large firms.
Adult learning – i.e. job-related adult education and training that is expected to enhance performance and productivity at work – is a key policy tool that Korea can use to close these gaps. Adult learning can help SMEs to close the productivity gap with large firms. It can help SMEs improve their productivity, while ensuring that SME workers can update their skills and improve their employment opportunities. It can strengthen position of SMEs in global value chains (GVCs) by helping them to specialise in high value-added activities (e.g. technologically advanced industries, complex business services). Adult learning is also valuable for SMEs going through changes due to company transitions, such as growth, restructuring, introduction of new technologies, or exporting for the first time.
While investing in adult learning in SMEs is already urgent today, it is likely that mega-trends such as digitalisation, population ageing, and globalisation, will make adult learning even more important in the future.
The adoption of new technologies, for example, may further increase the need for adult learning. OECD estimates show that some 44.3% of SME jobs in Korea could be partially/completely automated should new cutting-edge technologies be introduced, against 36.5% of jobs in larger firms. This suggests that many SME workers may need to retrain to adapt to these changes.
Population ageing may also increase the need for adult learning in SMEs. In Korea, the skills gaps between youth and older generations is among the highest in the OECD. Given that about 85% of older employees (ages 50‑65) in Korea work for SMEs and many people start and run a small businesses upon retirement, closing the skills gaps with younger generations will be key for the competitiveness of SMEs.
Adult learning is also key to address ongoing skills imbalances. The OECD Skills for Jobs data shows that high-level cognitive skills (e.g. reasoning and verbal abilities; complex problem solving skills) are in shortage in the Korean labour market, a trend that is similar to that experienced in most other OECD countries. On the contrary, the demand for physical and manual skills (e.g. physical strengths) is found to be in line with supply, unlike what can be observed in the OECD area where the supply of these skills exceeds what is required in the labour market.