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PAC/COM/PUB(2001)5

Paris, 8 February 2001

Korea Reforms to Join the Knowledge-Based Economy

Having successfully weathered the worst economic crisis since the 1950s, Korea nevertheless faces

numerous structural problems in an increasingly competitive global environment. To manage the transition to a
knowledge-based economy, Korea needs to increase overall productivity and open up to international trade and
information exchange. This implies a fundamental renewal of public policy in favour of entrepreneurship,
education and deregulation of markets.

The challenges facing Korea as it draws up a strategy for economic development in the 21

st

century

are described in a new publication, Korea and the Knowledge-Based Economy: Making the Transition,
published jointly by the OECD and the World Bank. It warns that Korea’s growth prospects may be seriously
hampered unless changes are made to an excessively complex system of regulations and an outdated
industrial framework, traditionally dominated by the chaebol, the family-controlled conglomerates.

Korea invests more in education, information infrastructure and R&D as a percentage of GDP than most

OECD countries. Yet the benefits that it reaps in economic terms are low due to inadequate protection of
intellectual property rights, lack of flexibility and misallocation of investments. Deregulating the education
system and increasing the autonomy for private institutions are critical reforms on the government agenda.

Journalists may obtain a copy of this report from the OECD Media Relations Division (request by fax:

33 1 45 24 80 03 or [e-mail]).

For further information, journalists are invited to contact Thomas Andersson at the OECD Directorate

for Science, Technology and Industry (tel: [phone] or [e-mail]) or
Jacob Arfwedson in the OECD Media Relations Division (tel: [phone] or [e-mail]).

-----------------------

“Korea and the Knowledge-Based Economy: Making the Transition”
152 pages, OECD/The World Bank, Paris 2000
Electronic version available (PDF)

36; FF236.14; US$33; DM70.40

ISBN 92-64-18298-5 (92 00 06 1)