Chairman Huh Chang-soo of the Federation of Korean Industries.

Chairman Sohn Kyung-shik of the Korea Employers’ Federation.

Chairman Park Yong-maan of the Korea Chamber of Commerce and Industry.

Chairman Park Sung-taek of the Korea Federation of Small and Medium Businesses.

In December 2017, then-chairman Park Byung-won of the Korea Employers’ Federation (KEF) released his 2018 New Year’s message in which he called for regulatory reform. “Regulatory reform should be done the way everything that may be possible in China can be enabled in Korea,” he said.

The Korea Chamber of Commerce and Industry (KCCI) and the Federation of Korean Industries (FKI) also issued similar messages.

However, nothing had changed one year later. On the contrary, regulations increased. About 1,500 measures had been submitted to the National Assembly since it launched its 20th term, Of the total, 833 bills were related to restrictions.

 Now, economic organization heads are calling for regulatory reform in chorus. The 2019 New Year messages were released together on Dec. 27, 2018. FKI Chairman Huh Chang-soo said regulatory reform was a matter of survival, not a matter of choice.

“As companies in foreign countries can do business, Korean companies have to be allowed to pay the way for it,” he said.

Korean companies should no longer be burdened in competing with foreign counterparts, Huh added. Gaps between Korea and foreign countries, including the United States, Japan and China, get bigger.

A case in point is car sharing services. Uber of the United States and Didi Chuxing have shored up their presence. On the other hand, car-sharing services in Korea have failed to capture market share due to a variety of regulations and opposition from the taxi business community. In the United States, Japan and China, AI-enabled remote medical services are made available via smartphones and wearable gadgets, but they are illegal in Korea.

KCCI Chairman Park Yong-maan said he wished for a departure from a dichotomy between growth and distribution. He said growth and distribution are not mutually opposing issues, but both are goals that should be attained.

Park also emphasized the necessity for regulatory reform. He analyzed that old-fashioned regulatory systems hinder innovation chances, obstruct the emergence of new industries, and throw away job creation opportunities.

A rapid increase in the minimum wage, a curtailment in working hours and inflexible labor-management relations are cited as factors to stand in the way of corporate growth.

KEF Chairman Sohn Kyung-shik said triple slow-downs – sluggish production and investments, and a decline in employment growth – will be materialized. A high-cost, low-production structure, caused by confrontations between labor and management, incurs a drop in industry competitiveness, Park said.

SME firms’ voices were urgent. Chairman Park Sung-taek of the Korea Federation of Small and Medium Businesses said SMEs and small shop owners were forced out of business due to rapid changes in the labor environment.

He appealed for buffers such as differential minimum wages according to each business and size and the implementation of flexible working hours. He called for social great compromise for securing labor flexibility and strengthening social safety net.

Corporate worry over external uncertainties has mounted. Chairman Kim Young-joo of the Korea International Trade Association (KITA) said, “The global economy is demanding a more challenging attitude from us.” He analyzed that it is a time for a paradigm shift from a fast follower to a first mover.

Globally, low growth and low consumption is a new normal trend and chances are high that advanced countries may tighten monetary policies and new economies suffer from financial uncertainties, he said.

Trade conflicts between the United States and China have dampened global trade. Chairman Kim added that the private sector will establish a new trade roadmap designed to help companies by monitoring numerous trade issues such as U.S.-China trade conflicts, tariffs and non-tariff barriers.