The Korean economy has achieved remarkably compressed industrialization,
vital social mobility, and decent economic equality during the last six decades.
Such a success is mainly attributed to human resource development (particularly
in science, technology and engineering) and ‘technocratic dominance’ over
politics in policy making. Recently, however, Korea’s growth potentials are
steadily weakening and social mobility is declining. Ironically, human
competency and policy making with minimal political distortions, two key factors
to the past success, are now converted into roadblocks. Demographic dividends
are dissipating and human competencies are trailing behind technological
progress. Representative democracy is malfunctioning and government failures
are growing. Reforming or upgrading out-of-date institutions, regulations,
practices, and organizational culture has fallen into arrears due to
populism-prone leadership. A sweeping structural reform for productivity
improvement is an inevitable path and a shortcut to boost both growth and
equality. First, welfare, education, and labor market systems must be reformed
to expand human resources and enhance human competency. Second, economic
liberalization must be pursued to establish market-friendly systems, foster
innovation, and reduce government intervention. For a successful reform, two
requisites are proposed: an advocacy leadership with moral suasion, and
‘statecraft’ in strategic change management.