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Park says 'creative economy' key to restoring middle class

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(GlobalPost/GlobalPost)

SEOUL, Aug. 29 (Yonhap) -- President Park Geun-hye said Thursday she believes her "creative economy" growth strategy is key to bolstering the dwindling middle class as the vision calls for providing more decent jobs through creative business ideas.

Park made the remark during a meeting of the National Economic Advisory Council, saying increasing employment translates directly into propping up the middle class, one of Park's key presidential campaign promises, along with raising the employment rate to 70 percent.

The creative economy, Park's trademark economic growth strategy, calls for creating new business opportunities, industries and jobs through the fusion of information and communication technology, culture and other realms.

"Restoring the middle class is linked closely to realizing the creative economy," Park said. "It is because realizing the creative economy is key to achieving a 70 percent employment rate, and achieving an employment rate of 70 percent is directly related to (restoring the middle class)."

The middle class play pivotal roles in all sectors of society, but their proportion has dwindled as polarization of wealth has accelerated, Park said. A decrease in the middle class is a serious problem because it could lead to a reduction in domestic demand and weakened growth potential, she said.

Later in the day, Park hosted a lunch for the chiefs of about 30 intermediate-sized enterprises -- companies larger than small and medium enterprises (SMEs) but smaller than conglomerates or chaebol.

The meeting and a similar session she held with the chiefs of South Korea's top 10 conglomerates a day earlier were aimed at seeking support from the business circles for her push to revitalize South Korea's slumping economy and create more jobs.

Park underscored the importance of mid-sized firms to the country's economy, saying such enterprises total only about 1,400, but account for 10.9 percent of the country's total exports and 5.7 percent of total employment.

"Intermediate-sized enterprises are the backbone of our economy," Park said. "Just as humans are healthy when their backs are strong, a country's economy can become strong when intermediate-sized firms are strong."

Park said she is well aware of difficulties mid-sized firms face as they grow out of SMEs, such as losing a series of state support and benefits they enjoyed as smaller firms and a greater number of regulations they come under as bigger companies.

This made some SMEs unwilling to grow, she said, likening it to the "Peter Pan Syndrome."

To help address the problems, Park said the government is putting together what she called a "growth ladder," a set of measures designed to help SMEs grow into intermediate firms and intermediate firms into conglomerates under continued tax, and research and development support from the government.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130829/park-says-creative-economy-key-restoring-middle-class