Job creation is now at the top position in the Korean government’s agenda. But the means for achieving this goal as well as general understanding on the issue lag behind Korea’s rapid transition to a knowledge-based economy. Direct job creation constitutes an important part of government policy, and the business calls for labor market flexibility. This reports shows that Korea’s job creation mechanism has shifted from one of a manufacturing economy’s to that of a knowledge economy, and knowledge has been the major driving force of job creation since the 2000s. Manufacturing employment has peaked as early as in 1990, and job creation thereafter has been fueled by the growth of knowledge intensive service industry jobs as in any advanced economies. If we presume two sectors in an economy, tradable and non-tradable, a knowledge intensive service job in the tradable sector creates twice as many jobs in the non-tradable sector as a manufacturing job. The knowledge intensive jobs themselves are created by innovation in manufacturing as well as in services and by business profits. Higher service to manufacturing jobs ratios, the growing share of investment on intangibles, concentration of jobs in the Seoul metropolitan area, all such major changes are phenomena in a knowledge-based economy. Job creation has been active with a rapid transition to a knowledge economy and has slowed down with its weakening.

The nontradable sector is larger in numbers of jobs, but the tradable sector is the engine and the determinant of quality of jobs in an economy. Hence the focus of this report is on the latter. Paradoxically the nontradable sector is less related to the economy’s competitiveness, which allows rooms for labor market policies in the sector.

This report covers firm productivity and knowledge capital, local job creation multipliers, patents and firm values, knowledge property right protection, and university-company research collaboration issues. But this list is not at all comprehensive and further research is called for in order to set up a knowledge economy jobs strategy, in areas such as place-based policies, R&D strategies for job creation, et cetera.

Preface
Executive Summary

Chapter 1 Job Creation in the Knowledge Economy
　Section 1 Knowledge Economy and Job Creation
　Section 2 Changes in Job Creation Drivers
　Section 3 Job Creation Model in the Knowledge Economy
　Section 4 Policy Framework to Promote Knowledge Capital Investment
　Section 5 Structure of the Report
　References
　Appendix

Chapter 2 Knowledge Capital and Firm Productivity
　Section 1 What is Knowledge Capital?
　Section 2 Measuring Knowledge Capital and Productivity
　Section 3 The Phenomenon of Productivity Growth Deceleration
　Section 4 The Role of Knowledge Capital
　Section 5 Summary and Implications
　References
　Appendix

Chapter 3 Determinants of Job Creation in the Knowledge Economy: Estimating Regional Job Multipliers
　Section 1 Introduction
　Section 2 Literature Review and Theoretical Discussions
　Section 3 Data and Descriptive Statistics
　Section 4 Empirical Model for Estimating Multiplier Effects
　Section 5 Regional Job Multipliers in Trade Industries
　Section 6 Heterogeneity Analysis and Implications
　Section 7 Conclusion and Policy Implications
　References
　Appendix

Chapter 4 The Impact of Knowledge Assets at the Firm Level: Focusing on Patents and Patent Citations
　Section 1 Introduction
　Section 2 Firm Patent Data
　Section 3 Model
　Section 4 Estimation
　Section 5 Robustness Tests
　Section 6 Conclusion and Implications
　References

Chapter 5 Policy Tasks to Enhance the Value of Intellectual Property Rights
　Section 1 Intellectual Property Rights as a Driver of the Innovation Economy
　Section 2 Policy Tasks from an Institutional Perspective
　Section 3 Policy Tasks from a Market Perspective
　References

Chapter 6 The Impact of Collaborative R&D with Government-Funded Research Institutes on Private Sector Outcomes
　Section 1 Introduction
　Section 2 Corporate Research Collaboration
　Section 3 National R&D Project Collaboration
　Section 4 Data Construction and Preliminary Analysis
　Section 5 Impact of Collaboration on Corporate Performance
　Section 6 Policy Implications
　Section 7 Conclusion
　References
　Appendix

Chapter 7 Recent Trends in Japan's Policies to Promote University-Industry Collaboration
　Section 1 Introduction
　Section 2 Current Status and Evaluation of University-Industry Collaboration in Japan
　Section 3 Policies to Promote Collaboration
　Section 4 Conclusion
　References

ABSTRACT