IntroductionA New Human Resources P

Introduction
A New Human Resources Policy for the 21st Century
Jang-Ho Kim
Need for a New Development Paradigm
The rapid growth of Korea over the past 50 years is regarded as an unprecedented and momentous success story in global economic history. In the early 1960s, Korea was one of the world’s poorest nations with per capital income of less than US$80, and its industrial infrastructure was poor. As a result of rapid growth rate it has achieved since then, Korea entered the
league of industrialized nations with per capital income of more than US$10,000 in 1995. It has now emerged as a major economic power, ranked as one of the 10 largest economies in the world. A growing number of leading multinational corporations are emerging from the Korean peninsula, and Korean companies are highly competitive in the world’s semiconductor, consumer electronics, automobile, shipbuilding, and iron and steel industries. Korea’s industrial structure is highly sophisticated and the quality of life has improved immensely. Korea’s such remarkable achievements, dubbed the ‘Miracle of Han River’, owe much to the successful implementation of government’s open economic development policies, the active involvement of all members of Korean society for a better way of life, and the supply of high quality human resources.
However, the same Korean economy that experienced such fast economic development has come across challenges in recent years. Major structural problems were exposed during the 1997 financial crisis. Korea’s macroeconomic framework was structurally flawed with weaknesses that were incompatible with the globalized and liberalized market environment. The Korean economy actively embraced globalization and liberalization, especially in the 1990s, but it was plagued with structural inefficiencies that failed to withstand globalization. Since then Korea has made considerable progress in restructuring the public, corporate and financial sectors, but it is
continuing with its efforts to build a market-oriented, transparent and efficient economy.
In the wake of globalization and the advent of the knowledge-based society, which is grounded in globalization and the information revolution, Korea has been forced to take more fundamental approaches, including a paradigm shift in the development model. Input-driven growth has revealed its limitations, especially against the highly competitive and integrated global economy. The motivation to work is declining and population aging is progressing at a fast rate in Korea, along with sharp reduction in birth rate. At the same time, China has transformed into the world’s manufacturing factory floor on the back of massive international investment. As the gap between Korea and China in production and technological capabilities narrows, there is a fear about the hollowing out of the Korean manufacturing sector. In order to achieve sustainable growth and adapt to the ever-changing environment, the private sector needs to play a greater
role and help competitive market mechanism function more efficiently, and new, innovative socioeconomic systems need to be established.
In the era of digital globalization, the most talked about issues for national development and prosperity are competition and collaboration. This is because the 21st century is the age of the network and an era in which global competition prevails. In this age of networking, the basic
elements of competition and collaboration depend on the competitiveness of individuals and organizations. Competitiveness in a knowledge-based economy is determined by two interdependent factors. The first factor is the core competencies of individuals and organizations, representing the unique capabilities that set an individual or organization apart from competitors. The second factor is flexibility, that is, the innovative capability of an
individual or organization to accept and adapt to change. Under the new economic environment, in which technology and demand patterns are changing rapidly, flexibility is a key factor in determining the success or failure of individuals and organizations. Recently, the Korean economy has faced several structural problems, largely because these two key factors of competitiveness have not been developed sufficiently. Accordingly, the basic direction of a new paradigm of socioeconomic development in Korea must concentrate on improving the two key factors for the enhancement of Korea’s national competitiveness.
HRD Strategies for Sustainable Development
Acknowledging that national competitiveness depends more on human resources development and individual competence than ever before, the Korean government has placed a greater emphasis on the development of national human resources. National human resources development policy is significant in that it is a strategy to secure an engine of economic growth, and to realize an active and productive welfare society. Human resources development, as it has always been, is about developing the capabilities and aptitudes of individuals, and it is growing in importance in a knowledge-based economy for the following reasons.
First, it should be noted that the capabilities of workers required by employers are essentially different from those previously required in an industrial society. Such abilities as simply taking in and reproducing were the kind of knowledge valued in the industrial society, whereas
such knowledge-creating capabilities as application of knowledge and creativeness are demanded by the knowledge-based economy. In addition to principal basic abilities, such as reading, writing, and numeracy, the core competencies that make up a knowledge-based economy include communication skills, information literacy, teamwork, self-initiation, problem solving, and networking.
Second, in a knowledge-based economy, along with a rapid aging of population, the importance of lifelong learning has increased, demanding development of capabilities over one’s lifetime. Due to rapid changes in technology and industrial structure, workers need to develop skills and
absorb new knowledge and technologies incrementally through selfinitiated learning. A national support system needs to be established to provide individuals with learning opportunities throughout their lives. Also, amid declining population growth and population aging, it is important to provide re-education and training for people to actively participate in economic and social activities.
Third, in addition to the concepts of physical and human capital, the importance of social capital needs to be emphasized when discussing economic growth and social development in a knowledge-based society. Social capital is a general term for organizational qualities that can enhance social efficiency by facilitating collaborative activities consisting of trust, rules or networks founded on reciprocity. Social capital also has an influence on the implementation and consolidation of democracy and social cohesion, and enables the development of society as a whole. The concept of social capital goes beyond the concept of human capital to focus on the
construction of a reliable network from which individuals can expect, and depend on, for social support. And the major trend is to include social capital for consideration in the discussion of human capital policy.
The Role of Government in HRD
Human resources development is an important issue that needs active involvement of the government. Human resources development cannot be adjusted automatically by market forces only due to the imperfectness of capital market, labor market and skills market. Due to the imperfectness of the market, it is possible that the wage level attained from education and training may not reach the respective marginal productivity. Moreover, the benefits of education and training tend to bypass the party paying for it, and flow to the trainees and employers. The result is that employers tend to hire skilled workers rather than invest in employee education and training. Consequently, society as a whole fails to achieve a desirable level of investment in education and training.
In addition, human resources development policy is significant as an active policy measure to achieve social integration, for it can ease or alleviate the digital divide, or the knowledge and information gap between various groups in society. Especially, the low-income groups and socially marginalized groups that are less capable of adapting to the rapidly changing economic environment are likely to experience widening of economic, social, and cultural differences, which will aggravate the problem of polarization. National human resources development policy can be used as an effective measure to lessen or remove such social polarization. Labor market polarization can be prevented and social integration promoted, if the widening of the knowledge gap is averted through development of human resources targeting the more vulnerable groups of society. By supporting continuous vocational development, labor productivity can be improved and
income gap narrowed. Education welfare of the socially marginalized groups needs to be therefore strengthened to promote social integration.
For effective national human resources development, the government needs to focus on the following. First, the government needs to strengthen the linkage between school education and the world of work and move away from a supplier-oriented educational system. Amid rapid changes in the technological environment and the world of work, the mismatch between the supply and demand of labor can worsen and result in the mismatch of skills. To prevent this, the government needs to maintain a signal system to alert the educational institutions of the fluctuations in the industry’s demand for manpower.