South Korea should realign its export structure by boosting the portion of the service sector while reducing dependence on the manufacturing segment amid digital transformation and the artificial intelligence era, a central bank report said Friday.
The Bank of Korea (BOK) said the country’s manufacturing sector accounted for 27 percent of its gross domestic product (GDP) in 2020, far higher than the OECD average of 14 percent.
Also, around half of total output by the manufacturing sector is consumed and used as intermediate goods overseas, according to the report.
The bank said South Korea is similar to China in terms of the high portion of the manufacturing sector in GDP, but in terms of export exposure, Asia’s fourth-largest economy is far more vulnerable to a glitch in the global supply chain compared with China.
According to the BOK, the portion of South Korea’s service sector in its exports stands at around 16 percent, far lower than the global average of 25 percent.
The bank said South Korea needs
to actively participate in global R and D cooperation, and secure key minerals as the fast-growing service sector and responses to climate change and geopolitical conflicts will set the overall tone for the future supply chain.
Source: Yonhap News Agency