A failure to fully implement market-based corporate restructuring could lead to serious economic trouble in the years to come. For Korean companies to prosper, they will have to be able to operate in a global environment in which companies are constantly measured by their ability to invest and operate in ways that enhance return on equity and create new wealth for their shareholders. Shareholder value is the new mantra of the global economy. Another priority area is regulatory reform key. A continuation of the deregulation effort of the past several months is crucial to attracting more foreign investment and making Korean companies more competitive.
Deregulation is also vital to the creation of new firms and new jobs.
I do not see the prospect of much job growth in Korean manufacturing. However, there are abundant opportunities for new jobs in relatively underdeveloped sectors of the Korean economy, like in services. This can only happen if the regulatory burden that has, for too long, choked growth in the services sector is further reduced. As Korea continues to develop, future job growth will almost certainly have to come from services, just as is the case in the advanced industrialized nations. I have been encouraged that in recent months several new companies have been established for every one company that has gone out of business.