Looking back over the past fifty years, 「exports have been a major driving engine」 behind Korea’s economic growth. Even at the initial stage (business start-up), some industries ranging from the wig to the shipbuilding aggressively went after overseas markets. Given that domestic demand was weak, it was no surprise that the Korean economy depended entirely on exports as the sole growth engine. Forecasting global demand and bringing in foreign capital nurtured export-oriented exports. This 「breakthrough idea」 provided a head start for the development which has been led by manufacturing industries such as steel, shipbuilding, cars, semiconductor, and home appliances.

But when it comes to the service sector, such 「breakthrough idea」 is rarely seen. on the contrary, a huge deficit in the service sector is one of the main culprits behind the current account deficit for several consecutive quarters starting from 2007. The current account deficit continues to widen due to travelling and studying abroad, medical tourism, and royalty payments overseas. The deficit on the services account can be reduced by the rise in the foreign exchange rate, but overcoming the service trade deficit requires more than passively relying on the rise in exchange rate.

Here comes the necessity of establishing well-calculated strategies to transform the service into a leading export industry. To begin with, evaluation of the global environment should be made and the service industry of Korea has to plan strategies for expanding overseas. The top prerequisites for this include ①gaining an adequate understanding of basic principles for expanding the service market Under the WTO (World Trade Organization) regime and entering into negotiations with foreign trading partners over the liberalization of the service market if necessary, ②in parallel with getting the whole picture of the Korean service industry to find out our comparative advantage in the service trade, in particular Koreans’ character, their level of knowledge, consideration for other people, and external attributes. ③In addition, strategies by sector need to be formulated to boost exports in the service, which calls for meticulous plans of action including efforts in the public sector such as research and development, removal of unnecessary domestic regulations, liberalization of the foreign market, and human resource programs aimed at rising as a service powerhouse.

First, based on the WTO’s principles of trade liberalization, Korea should press ahead with the creation of environment favorable to service exports. Negotiations for opening up the market have to continue with trading partners, accompanied by deep understanding and belief of formats and principles for negotiations adopted by the WTO. Unlike goods, the service sector has issues unique to each area, so a unified approach in the negotiation is not suitable. In the long run, service negations demand full consideration of distinct characteristics by area and factors encompassing human, physical, and social infrastructure. In engaging in negotiations on service exports, transparency in policies should be established when service trade is already limited. Furthermore, regardless of the degree of transparency, a schedule needs to be derived by mutual agreement during negotiations to end the existing policy restricting the trade within a couple of years. To do so, negotiators have to be well-acquainted with the GATS(General Agreement on Trade in Services).

It is also crucial to be aware of Korea’s condition concerning the service exports. As an intangible activity, the service requires consumers and suppliers to be at a site, thereby necessitating personal contact. In this respect, suppliers (exporters) of service should be equipped with good character, high levels of knowledge and technology, and consideration for other people. In discussing exports, extrovert personality of service providers is highly regarded as an important factor. Considering these factors related to humans, Koreans have great potential. From the perspective of history or religion, Koreans have the inherent mentality of seeking a symbiotic relationship and co-existence with other countries. The really high enthusiasm for education, intellectual level, a broad range of artistic talents, and the outgoing national characteristic hunting for the opportunity to advance into many parts of the world indicate that the service industry is quite an ideal candidate for the development into the export industry.

This report selects the nine service sectors including the IT & mobile communications, medical service, cultural content industry, broadcasting service, Korean food, transportation & logistics, distribution industry, education, and tourism, and suggests strategies to invigorate exports. Although each sector employs different strategies for export growth, common threads are found as follows. ①In light of the service sector’s sensitivity to personal contact, we need to gain a clear picture of how consumers at export-destinations feel. ②Diverse regulations in each country need to be thoroughly understood, and ultimately, abolished through diplomatic efforts based on the GATS. ③Institutional improvements through rigorous examination on domestic systems must take precedence to pave the way for a wider application of numerous incentives previously available only for exporters in specific industries. ④Human?physical?social infrastructure should be built to export the service. ⑤By making the most of “once Source, Multi-Use” which characterizes the service industry, these service sectors can expand overseas markets. ⑥Changing the way we think can result in an unexpected combination of the service and Korea’s own cultural tradition (such as Hangul) which is gaining popularity. ⑦As the human factor exerts great influence on exporting the service, efforts should focus on training professional manpower. In line with this, the government needs to institute policies to establish a specialized school for fostering human resources demanded in the export sector (experts). ⑧The definition of the service export includes attracting foreign consumers into the home land, so laws, systems, conditions, and infrastructure should be improved to provide the utmost convenience during the stay in Korea.

The idea of developing the service into export-oriented industry does not mean disregarding major manufacturing industries which now enjoy success as a result of the efforts to boost competitiveness. on the contrary, the key point in this argument is that we should learn a lesson from success story of exporting manufactured goods, in the selection of industries with growth potential and turning them into the export industries. In addition, synergy effect of simultaneously enhancing competitiveness of manufacturing industries is also expected by adding elements from Korea’s new development service industry to the manufacturing sector where Korea is closely followed by late developing countries.