OECD Advises S. Korea to Upgrade Universities

By Jung Sung-ki

South Korea needs to improve the global competitiveness of its universities, says a report released Monday.

The Organization for Economic Cooperation and Development (OECD) released its policy review of South Korea's regulatory reform efforts in recent years and pointed out what measures Seoul should take to meet the challenges of globalization.

The aim is for Korea to increase economic opportunities and close the gap with the most advanced countries in the world, the report said.

Korea has made impressive progress in a very short time in streamlining regulations, and fostering growth and competition, but "more should be done to strengthen capacity and promote change at the local and working level, if Korea is to reap all the benefits of its efforts," it said.

"For innovation and productivity to grow, especially in the service sector which is only about 60 percent as productive as the OECD average, Korea needs qualified human capital," the report said.

"While Korea's primary and secondary education levels are excellent, as demonstrated by scores at the international level, there is still scope for improving the quality of tertiary education to ensure an adequate supply of high-skilled human capital," it said.

Companies here complain about the quality of domestic university education because there is a "skill mismatch" with workers at both low and high skill levels in short supply, said the report that resulted from the OECD's on-site investigation last year into regulatory reform, market opening, telecommunication and university education.

South Korea represents five percent of foreign student flows to the OECD area, but plays a very modest role as a destination for students, it added.

The report, however, said Seoul succeeded in improving the global competitiveness of its university education system by eliminating obsolete regulations and simplifying others.

In addition, the report indicated that foreign ownership restrictions and market openness in certain areas, such as services, agriculture and media, also remain an issue.

"Laws and legal instruments may not always be sufficient to improve investors' confidence, as there is also a perception among some foreign investors that officials sometimes interpret and apply regulations more strictly for foreign firms," it said.

While foreign direct investment is allowed in most sectors, 26 have limitations on foreign participation and two sectors - television and radio broadcasting - are fully restricted, said the report.

The current negotiation over free trade agreements could potentially represent a powerful tool to address these challenges although care is necessary so that the results of free trade agreements do not lead to trade diversion, it pointed out.