Session 2. A Paradigm Shift in Economy and Korea’s Strategy
Presentation 2. Korea’s Strategy for Inclusive Growth
KANG Dongsoo 　Director of Research Coordination Office, KDI

□ Slow growth and worsening income inequality have been common global phenomenons since the 1980s. However, Korea’s income gap took a particular turn for the worse following the 1997 financial crisis.
 
○ Income inequality arises from technological progress, economic integration and an aging population. Accordingly, if Korea fails to achieve a full-scale policy shift towards a more inclusive growth, it will be difficult to sustain mid- to long-term development.
 
□ The most significant agenda for achieving inclusive growth is job creation, and to that end, consistent regulatory reform is essential.
 
○ Higher productivity could serve as a growth engine, but it is highly probable that there will be a repeat of past negative experiences including poor distribution. Besides, income-oriented policies will not guarantee better economic prospects.
 
○ With the fourth industrial revolution fast approaching, job creation must be pursued together with the regulatory reform of the commodities and labor markets while a safety net is established to absorb any negative impact from the reform.
 
□ A new strategy should be formulated that embraces inclusion and innovation and Korea should push forward for a policy paradigm that pursues both growth and distribution.
 
○ Structural reforms are needed so that resources are allocated more efficiently and new industries and jobs are created. And, a new system must be established in which people are equally given the value added created through more opportunities and better accessibility.