SEOUL: South Korea’s service sector has made a relatively small contribution to the country’s entire exports for years, lagging far behind the average of the world’s advanced countries, a report showed Sunday.
The service industry accounted for 15.1 percent in the country’s entire exports as of end-September last year, compared with an average 29.2 percent of the Organization for Economic Cooperation and Development (OECD) as a whole, according to the report released by Hyundai Research Institute (HRI), a Seoul-based private think tank.
The figure gained 0.3 percentage point from 2006 to 2014, while the OECD average jumped 2.8 percentage points over the eight-year period.
“The South Korean service sector has a far lower percentage in the country’s outbound shipments than that of other OECD countries, and has contributed less to export growth,” said the report. The amount of South Korea’s service exports stood at US$112 billion as of end-2014, slightly larger than an OECD average of $100 billion.
However, the HRI report noted that growth has been slowing from 2010 to 2014. During this period, it grew an average 7.7 percent, down from a average 9.8 percent reached in the 2006-2010 period. The OECD average edged 0.2 percentage point down to 6.1 percent over the cited period.
The report also showed that South Korea’s service industry heavily depends on exports of shipping and construction sectors, but puts less emphasis on exports of information technology, which is growing rapidly throughout the world. “New service markets like fintech and Internet of Things are expanding widely,” the HRI report said. “The government and the business have to draw up a comprehensive strategy to integrate the manufacturing and service industries.”
South Korea’s outbound shipments plunged nearly 8 percent to reach $527 billion in 2015, with its monthly exports posting negative growth every single month, due mainly to waning global demand and a slowdown in China.
