Trend Unfair trade practices and labour market dualism are weakening incentives to innovate

Summary

The government diagnoses that an unfair market order is eroding incentives for innovation in the Korean economy. It points to persistent unfair dealing and technology theft by firms with market power, including large companies in negotiations with suppliers. Difficulties in securing evidence and proving damage limit the relief that small firms can obtain through compensation claims. As a result, the innovation incentives of small and medium firms weaken, their competitiveness falls and their ability to scale up is constrained. The government adds that labour market dualism is deepening, with widening gaps in pay and conditions and weak safety protections for workers in vulnerable sectors.