OECD Economic Surveys: Korea 2018

Annex A3. Progress in structural reform

Abstract

This Annex reviews actions taken on recommendations from the 2016 OECD Economic Survey of Korea that are not covered in tables within the main body of the Key Policy Insights chapter. Recommendations that are new in this Survey are listed in the Key Recommendations box and at the end of the thematic chapters.

 

Recommendations in the previous Survey	Action taken since May 2016
Use the new “cost-in, cost-out” system to reduce the regulatory burden based on accurate Regulatory Impact Assessment.	The government is running the “cost-in, cost-out” system, backed by scientific cost-benefit analysis by the Center for Regulatory Studies for improving cost prediction accuracy.
Phase out positive-list regulations.	The “first permission, ex-post regulation” system was announced by the Prime Minister in September 2017. The system allows new products and services to be launched first and regulated later, if necessary.
Focus venture capital on start-ups by facilitating early-stage IPOs in the KOSDAQ and KONEX markets.	The government took measures to revitalise the KOSDAQ market in January 2018, improve the KONEX market in April 2017 and to activate the intermediate recovery of unlisted SMEs and venture businesses in November 2017.
Take further steps to jumpstart the M&A market through regulatory reform.	The government expanded the size of the M&A component in the Growth Ladder Fund in 2017, and is supporting M&As of SMEs by designating investment banks specialised in mid-size companies. Strategic investors are now allowed to participate in special purpose companies established by private equity funds.
Relax barriers to trade and investment to help firms better connect to global innovation networks.	Foreign equity ownership limits in littoral fishing and other service activities incidental to air transport were removed in September 2016 and March 2017, respectively.
Strengthen R&D links between academia, business and government by promoting the mobility of researchers.	Since 2017, the results of university-industry co-operation have been reflected in the evaluation of professors and instructors at universities.
Lower the share of loans to SMEs that are guaranteed by the government and put time limits on their length.	The government is reducing guarantees for long-term SME loans.
Reduce the generosity of SME support to weaken the disincentives for small firms to grow into larger enterprises, thereby increasing their productivity through economies of scale.	The government integrated and eliminated 16 redundant SME programmers run by four ministries in 2016.
Improve the skills of older workers by expanding lifelong learning, focusing on those with weak skills, and base it on the National Competency Standards to ensure its relevance to the labour market.	The government has expanded training for older workers at public training institutes, with seven courses at four campuses in 2017, and will provide specialised courses in 2018.