Issue Sustaining growth under labour supply constraints in Korea

Summary

KEIS frames Korea's central challenge as achieving sustainable growth in an environment where labour is becoming scarce. It warns that very rapid low fertility and ageing will constrain the supply of core workers, weaken human capital competitiveness and create imbalances in labour supply and demand across industries and occupations. A growing dependent population adds to social burdens and threatens to slow the country's growth potential. The report's response combines drawing more people into work on the supply side with a rapid transition to an innovation-led industrial structure and higher productivity on the demand side. It concludes that expanding a safety net for marginalised groups, promoting R&D and developing highly skilled talent familiar with AI and data are the only ways to sustain growth.