Title, Date, Attachment, Content
[KDI’s monthly periodical] Conditions for Successful Workforce Policy
Date 2022-12-28

Published in: September issue of National Economy (No. 382), KDI’s monthly periodical

Published on: August 31, 2022

Conditions for Successful Workforce Policy 

The quality of life and competitiveness of a nation hinge on various factors, but the most important among them is undoubtedly its workforce. In any country, the focus is placed on securing its workforce in a quantitative sense in the initial stages of economic development and then on developing its workforce in a qualitative sense after the economy advances to a certain extent. With the advent of the Fourth Industrial Revolution, the qualitative aspects of a workforce have become even more important. Countries around the world are concentrating their resources on enhancing the quality of their workforce.


In Korea, the workforce is even more valuable due to the country’s lack of natural resources and insufficient capital. In fact, the nation’s rapid economic development was driven by its aggressive investment in workforce cultivation. The sectors of science and technology and industry require workers equipped with differentiated capabilities compared to previous times. As AI, metaverse, and other digital technologies that were only envisioned in novels and movies are now being industrialized, the demand for workers knowledgeable in these areas continues to grow.


We are now in need of policies that can manage workforces with conventional capabilities while fostering workforces with innovative capabilities at the same time. In order to ensure the successful adoption and implementation of such advanced workforce policies, the following challenges must be resolved.


First, it is vital to perform an accurate analysis of workforce supply and demand. The prerequisite for workforce cultivation is an accurate estimation of the scale of workforce and capabilities required by different industries. As economist Alfred Marshall mentioned, labor calls for a long-term investment unlike other products. Thus, the importance of a workforce supply and demand analysis cannot be stressed enough. It is the beginning and heart of all workforce policies. For this reason, the government has invested in workforce supply and demand analyses for diverse industries including advanced industries. However, the allocated budget amounts and number of analysis experts have been insufficient compared to its importance. It is viewed as necessary to rapidly expand the relevant budgets and number of experts.


Second, due to the traits unique to the area of workforce, the short term and mid-to-long term workforce cultivation policy must be planned seperately and carried out in a balanced manner. The need to resolve workforce shortage or oversupply within a short period of time may arise because of variables that are overlooked or realistically unidentifiable by the workforce supply and demand model. In addition to mid-to-long-term policies for regular students, short-term policies are also needed to resolve workforce shortage through intensive training for graduates and students of majors closely related to proficiency traits in urgent need. The government must flexibly respond to changing workforce supply and demand by employing short-term and mid-to-long-term policies properly.


Third, an organization dedicated to the supervision of workforce policies must be formed to build a virtuous cycle of analysis-cultivation-utilization of workforce and to ensure more effective cooperation among government agencies as well as industrial-academic-research-government cooperation. Despite continued efforts, the establishment of a system to promote such cooperation concerning workforce policies remains one of the most difficult challenges that have yet to be tackled. In this context, the government’s recent move to initiate the Strategic Council for Workforce Cultivation presided over by the President to build pan-governmental cooperation governance appears timely. A permanent organization dedicated to the technological and systematic support of the Council is also necessary to ensure the effective operation of pan-governmental cooperation governance.


The fulfillment of the above mentioned conditions will contribute to improving the public’s quality of life and national competitiveness in this fast-changing world.