Finance ministry picks services as Korea's next growth engine

The finance ministry said Wednesday it will concentrate support on the services industry as the next growth engine for South Korea's economy, naming tourism, exhibitions and K-beauty services as the sectors to be cultivated.

Deputy Prime Minister and Finance Minister Lee Hyoung-il outlined the plan at a government complex meeting in Seoul, pointing to semiconductors as the country's current export mainstay and calling for "second and third runners" to carry growth forward. He said the services sector creates jobs at a high rate, is the industry closest to people's daily lives and contributes to revitalising regional economies.

"The runner who takes the next baton runs alongside before receiving it," Lee said, adding that the government would pursue both growth and household livelihoods through its support for services.

Services accounted for 61.9 percent of value added and 71.6 percent of employment across all industries in 2024, against 28.7 percent and 15.6 percent for manufacturing.

Under the tourism plan, the government will shift the structure of inbound travel away from the Seoul metropolitan area by designating five overlapping tourism zones centred on regional airports — Gimhae, Daegu, Cheongju, Yangyang and Muan. The target is 5 million arrivals through those zones by 2029, backed by about 410 billion won ($306 million) of national and local spending next year, regulatory exceptions and AI demonstration projects.

On exhibitions, the government aims to develop at least five national or regional flagship trade shows by 2030 and will hold a K Connect AI exhibition this year, linking advanced-industry shows with artificial intelligence. Regional representative exhibitions will be selected in step with the government's five-pole, three-special growth engines, and exhibition industry districts will be designated to build local ecosystems.

For K-beauty services, the ministry will overhaul a skin data bank now holding information on more than 17,000 people from 18 countries for AI training, and will ease rules so a single dispensing manager can oversee multiple cosmetics stores. Standard QR payment codes for foreign visitors will double to 80,000 stores next year. A K-beauty academy will train 1,900 specialists a year, and the government will lower the threshold for medical tourism visas and extend overseas expansion support beyond medical and bio fields to beauty services.

The government also confirmed the Korea Grand Festival, a nationwide discount event, will run for 18 days from Oct. 29 to Nov. 15. Digital Onnuri gift certificate discounts will rise to 10 percent from 7 percent, a co-prosperity consumption lottery will pay out 1.7 billion won ($1.27 million) in prizes, and agricultural, livestock and fishery products will be discounted by as much as 50 percent. Details will be announced later this month.

Lee asked the National Assembly for its attention and cooperation so that the services industry development framework act, already introduced, can be enacted within the year. He also said the government has begun work on three core social policies covering housing, jobs and microfinance, and that all ministries and state research institutes would pool efforts on measures to narrow polarisation, so that the fruits of growth are shared evenly.