After Korea's Two Big Growth Leaps, No 'New Growth'... "Time to Remove Regulatory Barriers"

[Financial News] “We have to climb a big mountain, but the day is ending and a big rock (regulation) is blocking the way.”
Song Seung-heon, McKinsey & Company Korea Office Representative, diagnosed this at the 'What is the New Government's Regulatory Reform Direction?' discussion held by the Korea Chamber of Commerce and Industry at the Korea Chamber of Commerce and Industry building in Jung-gu, Seoul on the 14th, stating, "After Korea's growth in the 1960s-80s and 1980s-2000s, there has been no 'new growth' for the past 20 years."
Representative Song analyzed that the reason for the stagnation of Korea's economic growth is not only the sluggishness of leading companies but also the stagnant capital, manpower, and innovation invested in venture companies, and the inability of the service industry, self-employed businesses, and small and medium-sized enterprises to create added value due to low labor productivity. He particularly pointed to the rigid environment that makes it difficult for entrepreneurial spirit to be exercised as a cause of low growth.
He said, "We are in an era where we need to respond flexibly to changes in the internal and external environment, but the current regulations are excessively uniform and lack flexibility," and "Once regulations are created, they mostly only get strengthened, and as companies find it difficult to adjust their strategies to changes, a vicious cycle of poor performance is repeated." 
He also emphasized that to create new growth, it is time to first remove the big obstacle (Big Rock) of regulation. Representative Song suggested, "While it is important to address hundreds of regulations one by one, we must focus on solving key regulations that restrict the will to do business, such as capital market regulations, labor regulations, and venture investment regulations." 
Furthermore, Representative Song added, "Regulations may have had a reasonable background at the time they were created, but today they act as factors that make innovation and challenges difficult for large corporations, foreign companies, domestic and foreign investors, and venture entrepreneurs," and "This is not an ideological issue but a matter of execution, so it is a task that the entire society must endure and solve from a long-term perspective, not a choice between growth and distribution, left or right." 
As there is not much time to create growth opportunities, the opinion was also raised to test first in a 'Mega Sandbox' style. Professor Lee Jeong-hee of Chung-Ang University proposed a model of testing first and then executing, saying, "The regulations we face now can take years just for discussion." For example, it is necessary to apply region-specific exceptions to ease regulations, such as flexibly adjusting inheritance tax within specific areas or allowing flexible working systems in research and development (R&D) special zones.
The Korea Chamber of Commerce and Industry recently suggested in its booklet 'New Order, New Growth' that "There is no need to remove all regulations nationwide. It requires a lot of resources. Let's proceed by experimentally easing regulations, verifying their effects, and then expanding the scope." The National Planning Committee also recently announced that the Mega Sandbox is not a one-point but a comprehensive regulatory relaxation system and plans to reflect it in national tasks, saying that it is receiving reports from the Personnel Authority and the Board of Audit and Inspection for extensive regulatory exceptions. 
Park Il-jun, Vice Chairman of the Korea Chamber of Commerce and Industry, said, "It is a time when the National Planning Committee, the central government, and local governments are all putting their heads together for drastic regulatory reform," and "I hope that regulatory innovation will lead to bold investments, create new growth, and continue a strong virtuous cycle of creating quality jobs, balanced national development, and improving birth rates."soup@fnnews.com Lim Soo-bin Reporter