Korea's 10 Major Trends for 2013

Kim Seong-Pyo Researcher Fellow Samsung Economic Research Institute

• Economy - Continuous low growth
• Politics - Launch of the new presidency
• Industry and management - Pressure to change the paradigm

• 1. Continuous growth below potential

  • The BOK forecasts two straight years below 3% Growth: 2.0% (2012) to 2.8% (2013)
  • Korea's three major growth engines have weakened

• 2. Increased risk from housing debt

  • Household debt has increased continuously ￦41.4 trillion (2011) to ￦48 trillion won (2012)
  • Purchases have frozen as housing prices fall

• 3. Worsening financial management and chronic low interest

  • Continuous global stagnation Base interest in major economies is at the lowest level in history US, Japan (zero interest), EU (0.75%), Korea (2.75%)

• 4. Social integration to be tested

  • Demand for cohesive leadership is increasing (Job creation, growth engines, social safety nets)

• 5. Designing a Korean style welfare system

  • “Work friendly” welfare and increased efficiency in administration
  • Expansion of welfare and securing financial soundness

• 6. Seeking a breakthrough in inter-Korean relations

  • Flexible policy in the South to stabilize the North’s foreign relations,
  • If negotiations do not reopen in the first half or the impasse becomes prolonged, provocations like the third nuclear test will continue

• 7. Revamping for a high efficiency management structure

  • The strong won, weak yen and pervasive low growth will require both cost effectiveness and revenue creation
  • New growth engines should be reviewed and arranged in the business portfolio

• 8. Low price, high value consumption

  • Smart consumption that adjusts the timing of purchases
  • Consumers will target sales periods and families will participate The market for used products will grow

• 9. Growing use of big data

  • Building of a new industrial ecosystem with big data

• 10. Debate on jobs and extension of the retirement age

  • Discussion about introducing a wage peak system
  • Growing interest in coexistence of generations at work

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