NABO Industry Trends and Issues (No. 26)
Published on 25 November 2019
Published by Economic Analysis Department
I. Employment, Population and Pension (Insurance) Trends
In October 2019, the number of employed people increased by 419,000 YoY, monthly, while 90,000 more young adults found new jobs. The number of employed people in manufacturing fell by 81,000 (-1.8%) YoY, monthly, to 4 million 434 thousand; whereas the number of employed in the services sector increased in October MoM (by 0.3%) and YoY, monthly (by 2.6%). Employment by age bracket indicated an increase among youths and young adults (aged 15-29, 1.4%p) as well as people in their 30s (0.4%p), 50s (0.5%p) and 60s (1.5%p), while there was a decrease among those in their 40s (-0.6%p). Employment rates decreased YoY, monthly, across all age groups.
II. Analysis of the Export Competitiveness of New Industries in the Korean Chemical Industry
The chemical industry is one of the key players in the manufacturing sector as it produces the base materials needed in most other industries, and its importance and demand are gradually increasing. In particular, the chemical manufacturing-based bio industry based on the chemical manufacturing is regarded as one of the most potential fields and is expected to serve as an engine for sustainable growth in Korea. In this point of view, the Trade Specification Index (TSI, quantitative indicator) and export-import unit price (qualitative indicator) are used to analyze the export competitiveness of the bio industry. Results show that pharmaceutical products are import-centered while cosmetics are export-centered, and the quality of domestically-manufactured pharmaceutical products is lower than those manufactured in Japan. Since pharmaceutical products have an import advantage, concerted efforts should be made toward expanding the export market for pharmaceuticals to improve the trade balance; and since cosmetics may face intensified competition in the global market, investments should be made towards the research and development of high-quality cosmetics.
III. Analysis of the Export Competitiveness of Semiconductor & Display and Computer & Computer Peripherals Industries
While the trade volumes of the semiconductor and computer & computer peripherals industries throughout 2014 to 2018 increased by 14.9% and 7.3%, respectively, significantly higher than the trade increase rate of all industries; there was a 15.1% decrease in the display industry due to weak LCD exports. An analysis of Korea’s export competitiveness of system semiconductors and next-generation displays – which were designated by the government as innovative growth drivers – concluded that these industries fall behind those in the US, Germany and Japan in terms of quality. Growth is expected in the next-generation display market, led mainly by system semiconductors and micro-LEDs, in which Korea has weak competitiveness. Against this backdrop, in order to reinforce the competitiveness of existing areas of strength such as the semiconductor & display industry while meeting the demands of the 4th industrial revolution, measures are required to secure original and core patents at an early stage through an expansion of domestic R&D investment support.
Ⅳ. Relation between Young Adults’ Employment and Low Birth Rates
As the employment conditions for young adults weaken, the low birth rate phenomenon is worsening with the average age of first birth increasing. An analysis was conducted on the relation between the characteristics of the first jobs taken by young adults and their decisions on childbirth, since first jobs are likely to have a long-term impact on the young adults’ future career, such as in terms of their wage levels and job security, and such factors may be considered when they make decisions related to childbirth. As a result, it was found that the age at which a first job is obtained is highly relevant to one’s decision to have a first child, and that the chance of having a first child increases when one’s monthly salary in their first job is higher, when the size of their first company is larger and when they are employed as a full-time or regular employee. Thus, the low birth rate issue may be addressed with the availability of a greater number of “decent jobs” preferred by young adults. Therefore, it is necessary to establish a foundation that will induce employers to offer more high-quality jobs.