The Address of Lee, Shukchae, Chairman of Korea Telecommunications
No company will succeed unless they relate their development to the general economic progress. This applies especially to businesses engaged in service sectors like KT. They are standing at the place where they have to turn from having a hardware-centered economic structure to a content-centered one.
Korea is now faced with many external and internal challenges: the financial crisis that originated in Europe, the widening gap between the rich and poor, the quickly aging society, and the unemployment problem among young people, to name but a few. The financial crisis in Greece has drawn a dark shadow over most Southern and Eastern European countries and now we're anxiously gazing at its possible impact on Korean financial sectors. In addition, we need to keep an eye on a possible Chinese recession and domestic inflation.
The domestic economy is closely related to political decisions. When it comes to economic policy, the most important task that the government should address is setting the agenda and priority for its economy. The rest will be dealt with by the experts and officials in charge of economic matters. Surely, there are some cases in which politics should intervene. For example, there can be structural problems-some people will stick to old conventions and never want to change and, in some cases, even when people need to compromise to solve intricate situations, they won't do so. Those are situations in which political action is necessary.
We have two economic problems that politics should take care of. The first is the deepening division of wealth or the alienation of small businesses. The second is the decreasing population problem. In Korea, the first problem wasn't very significant in the past, but at the moment 15 percent of the population is in poverty. Among the thirty one OECD countries this percentage has been the fifth and is now the seventh highest. The biggest issue is that young people cannot find jobs. Every year about five hundred fifty thousand students pour into society looking for jobs, yet only fifty to one hundred can find employment at large conglomerates or government-run companies. The rest go abroad to improve their language proficiency or live off their parents until they are in their thirties. The young people who couldn't find stable jobs get to work at some outsourcing companies which are playing a significant role in the Korean industrial structure. This is one of the main reasons why we have poor adolescents and a destitute class. Also, the parents of these young people have to pay high tuition and support their children and gradually become poor themselves. Consequently, the poor class is increasingly getting larger.
One measure we can take to solve this structural poverty is lowering the legal and institutional regulations so that large conglomerates and government-run companies can employ more young people with fewer burdens. It's time to make the employment system flexible so that companies can replace older workers with a young labor force. Alleviating the obligatory employment system will encourage companies to employ more young people and older people can work for outsourcing companies. Then everyone can find a job, companies will get fresh vigor, and older people will be able to prepare for their retirement. Once young people get jobs, they'll support themselves, and the financial burdens on older people will decrease over time.
The second problem is not something Korea faces alone. As an example, the main reason that the Japanese economy and society are at a standstill is their aging society. Sooner or later Korea will also be confronted with the problem of a low labor force. Even now one person is supporting two people. In thirty years, we may have difficulty maintaining the status quo even if we impose doubled taxes on citizens. Many solutions are being raised in order to work out this problem. Two of them are importing North Korean or foreign labor forces. However, when we look at the previous example of the unified Germany, North Korean labor is more of a burden rather than an asset. As for foreign labor, it will take at least thirty years for Korea, an ethnically unified country, to accept a foreign labor force and use it effectively.
I think we need to make innovative renewals for the causes that bring about aging society. The main causes are expensive and ineffective childrearing, education, and medical practices. We can use a network to improve these areas. These three sectors are done offline, so the financial burdens are very big. Those financial burdens lead to lower childbirth and then a reduced population. We have to concentrate on information technology in order to solve these problems. We can improve the childrearing system by using "smart working." This will allow parents to work anywhere without ever having to go to workplaces and can be done using a network. Tuition can be lowered with mobile and online education services called e-learning. Senior citizens could check their health conditions at home with the aid of online medical services and wouldn't have to visit hospitals. I believe ideas like these and overall network innovation will lower expenses from these three sectors and eventually decrease the burden that the people are carrying. With this belief, KT has been making an investment of 1.8 trillion won every year, and cumulatively 11 trillion won, to construct such a high-quality network infrastructure.
In this new industry, I believe we can activate the employment market by revising the Work Standard Acts so that companies can lower the pay of less-productive workers and dismiss employees or terminate contracts with more ease. Education will be the number-one issue we need to concentrate on for this to come true. Korea has the sure potential to be the education hub in South Asia or the world. In all truth, as long as education goes well, it's very simple to create several hundred thousand jobs.
I think the future of Korea's economy and young people will be bright when we get support from deregulation and make information technology the center of our economy.