Deputy Prime Minister and Minister of Economy and Finance Koo Yun-chul chaired the second meeting of the Public-Private Service Industry Competitiveness Task Force on the 6th at Westin Chosun Seoul, calling for the enactment of a Service Industry Development Basic Act to provide concentrated support through R&D, tax benefits, and financial assistance. Koo stated that a new framework is urgently needed to develop the service industry amid what he described as a global AI revolution. The service industry currently accounts for 70% of domestic employment and 60% of added value in Korea, according to analysis presented at the meeting by the Korea Economic Research Institute.
Deputy PM Koo Calls for Service Industry Development Basic Act
Koo Yun-chul emphasized that "a new framework must be established for the development of the service industry" and stated that "the enactment of the Service Industry Development Basic Act for concentrated R&D, tax, and financial support is urgent." He explained that legal grounds are necessary to establish long-term and short-term development plans and integrated governance that breaks down barriers between ministries and industries to foster the overall service industry.
Koo added that bold regulatory rationalization should be pursued through mechanisms such as non-action letters that allow advance confirmation of whether new industries can proceed. He stated, "The entire world has entered a national total war staking survival on the AI revolution upheaval period," and emphasized that "for an economic leap forward, improving service industry competitiveness is important alongside the three major mega-projects centered on semiconductors, AI data centers, and physical AI."
AI Transformation in Shopping and Service Sectors Highlighted
Koo diagnosed that the service industry is at a turning point where AI is creating "convergence with manufacturing," "public service innovation," and "transformation of daily life." He specifically noted that in the shopping sector, changes are emerging where AI goes beyond product recommendations to compare products on its own and even handle ordering and payment.
Koo stated, "We will promptly prepare institutional improvement measures to demonstrate the entire shopping process of AI agents in order to preempt the new AI agentic commerce market." He identified that the service industry is meeting AI at a transformational period where convergence with manufacturing, innovation in public services, and major changes in daily life are occurring.
Research Institutions Present Three-Strategy Framework for Service Industry Growth
The Korea Economic Research Institute presented analysis showing that the service industry is responsible for 70% of domestic employment and 60% of added value, and that service trade is growing faster than goods trade. The institute proposed that three major strategies are needed for service industry development: export activation, rationalization of domestic demand value, and global leadership in new services.
The institute emphasized that as convergence between manufacturing and services, and between services and services expands, a cross-ministerial policy coordination and support organization is important to reduce blind spots in policy support. Professor Shim Sang-min of Sungshin Women's University stated that K-Culture is expanding into K-Everything, and that innovation in production, investment, and distribution, integrated policy implementation, and cultural awareness transformation are necessary for sustainable growth.
The Korea Employers Federation delivered 20 policy recommendations discovered in the field, including content and beauty sectors, to the government. The government plans to utilize the discussions from the meeting in discovering and establishing service industry-related policy tasks.
FAQ
What did Deputy PM Koo Yun-chul announce at the second Service Industry Competitiveness Task Force meeting on the 6th?
Deputy PM Koo Yun-chul called for the urgent enactment of a Service Industry Development Basic Act to provide concentrated R&D, tax, and financial support. He stated that a new framework is needed to develop the service industry and emphasized regulatory rationalization through mechanisms such as non-action letters.
How significant is the service industry to Korea's economy according to the meeting?
According to analysis presented by the Korea Economic Research Institute at the meeting, the service industry accounts for 70% of domestic employment and 60% of added value in Korea. The institute also noted that service trade is growing faster than goods trade.
What AI-related changes in the shopping sector were discussed at the meeting?
Deputy PM Koo noted that AI is creating changes in the shopping sector where it goes beyond product recommendations to compare products on its own and handle ordering and payment. He announced that the government will prepare institutional improvement measures to demonstrate the entire shopping process of AI agents to preempt the new AI agentic commerce market.
