Koo Yun-cheol: Enacting Service Industry Development Act is urgent amid 15-year stalemate

South Korean Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol has emphasized the critical need to pass the Service Industry Development Basic Act, a piece of legislation that has been stalled for 15 years. The act is designed to provide essential tax and financial support to the service sector, which plays a crucial role in the nation's economy, accounting for 60% of its GDP.

Speaking at a meeting of the Service Industry Competitiveness Enhancement Task Force, Koo stated, "We need to create a new framework for the development of the service industry." He highlighted that alongside major projects in semiconductors, AI data centers, and physical AI, enhancing the competitiveness of the service sector is a key priority for economic advancement. He argued that the act is urgently needed to "boldly open up inter-industry barriers" and enable concentrated support for research and development, tax incentives, and financial aid.

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We need to create a new framework for the development of the service industry. [...] The Service Industry Development Basic Act is urgently needed to boldly open up inter-industry barriers and enable concentrated support for research and development, tax incentives, and financial aid.

The Service Industry Development Basic Act aims to foster the industry's competitiveness through various government support measures and the creation of a robust industrial base. However, its passage has been hindered by controversy since its initial proposal during the Lee Myung-bak administration. A major point of contention has been the inclusion of public services, such as healthcare, within the definition of the service industry, sparking debates about potential commercialization and privatization.

Currently, four different versions of the bill are pending in the 22nd National Assembly. Some proposals, like those from the Democratic Party, exclude healthcare, while others, from the People Power Party, do not contain specific exclusion clauses. The Deputy Prime Minister also pointed to the transformative era the service industry is entering, driven by AI, leading to "convergence with manufacturing, innovation in public services, and a great transformation of daily life." He urged proactive preparation for advancements like AI-driven e-commerce and integrated mobility services combining autonomous driving with vehicles and urban air mobility (UAM).

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Now, the service industry is meeting artificial intelligence, leading to convergence with manufacturing, innovation in public services, and a great transformation of daily life. This is an opportunity for our service industry to leap forward and a breakthrough.