The Korean Economic Forum
Income-led Growth, Innovative Growth, and New Business Ecosystem: Complementary? or Contradictory?
Choong Yong Ahn (Chung-Ang University)Year 2019Vol. 12No. 2
The current Moon Jae-in administration of Korea, during more than two yearsin office, has adopted as its flagship economic policy an income-led growthcoupled with an innovative growth to urgently create jobs and resolve rampantunemployment, acute income polarization and slowing growth. The highestpriority income-led growth policy has been implemented through a recordminimum wage hike. The innovative growth policy with a far-lesser priority hascentered on government-led subsidized venture businesses. The dual policieshave produced significantly opposite results deviating from the intendedobjectives, being not harmonious each other but mutually contradictory. Koreaneeds to make a fundamental shift from the wage-led growth to an innovativegrowth regime. Specifically, the minimum wage for 2020 needs to be frozen,together with flexible working hours, digitalization, globalization, the humancapitalization of micro businesses and adequate social safety nets. Korea alsoneeds to create a new business ecosystem between big and small businesses.