To Start Anew with Entrepreneurship

The weakening vitality of the Korean economy can be confirmed in the continued downward trend in economic growth rates. Why is this happening? The reason lies in the decline of entrepreneurship. In a corporate economy where entrepreneurship is vibrant, increased investment and job creation naturally lead to higher incomes and stronger economic growth. If our economy is to make a fresh start, we must revive entrepreneurship.

The new government has presented a vision for raising the potential growth rate. It has met with entrepreneurs and listened carefully to voices from the business community. Encouraging entrepreneurs striving amid global competition and improving the institutional environment that supports them is the first step toward reviving entrepreneurship.

As anti-business sentiment and regulations that dampen entrepreneurship have increased in our society, the contraction of the corporate economy has gradually worsened. As the spillover effects of the corporate economy have diminished, the domestic market has also stagnated, and the business difficulties of small merchants and the self-employed have become more severe.

The global economy is changing along with U.S.-China tensions. Korea, too, is at a turning point that calls for a new start. Now is the time to foster business-friendly sentiment and take a forward-looking approach to reviving the corporate economy.

When our economy was enjoying rapid growth, Korea was regarded as one of the countries with the strongest entrepreneurial spirit in the world. Even now, countless entrepreneurs are active across global markets. If we encourage them and ease their difficulties, our corporate economy will regain its vitality. If entrepreneurship is revived, entrepreneurs will increase investment in Korea, make better use of capital, and create more quality jobs.

It is important to address the difficulties entrepreneurs feel most acutely. When entrepreneurs decide to invest, they do so from a long-term perspective, looking at least 20 to 30 years ahead. Short-term incentives are important, but they are also highly sensitive to policy uncertainty and long-term changes in the investment environment. Whether taxes will rise or fall over the long run also matters.

If we are to consider how to encourage entrepreneurs to increase investment in Korea, we must create an opportunity for the entrepreneurs who make corporate investment decisions to recognize that Korea is a good place to invest.

The most urgent issue to resolve is easing inheritance taxation. If it continues to remain at one of the highest levels in the world, investors will have no choice but to turn away from Korea. A social consensus is needed to decisively lower the inheritance tax burden to levels seen in countries that attract global investment capital.

Companies want an abundant labor force. If excessive labor regulations block the effective use of labor, companies will turn to overseas investment. More than anything, it is crucial to increase jobs for people who want to work. We must move beyond policies focused on existing workers and think about how to expand quality jobs.

What we must do is clear. The solution lies in enhancing entrepreneurship. First, political efforts to bring about a shift in social awareness toward stronger pro-business sentiment must come first, and this should be followed by a market-friendly policy approach to support it.

Sung-no Choi, President of the Center for Free Enterprise (CFE)

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Original title: 기업가정신으로 새롭게 시작하려면

Author: Sung-no Choi

Date: 2025-06-23

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&idx=27822