Regulatory Reform for Fostering an Innovation Ecosystem

Although South Korea has taken various measures related to regulatory reform over the past decades, it has not made significant progress in transforming its regulatory framework. There are still a large number of regulations that are outdated and exist only in South Korea compared to other developed countries. This working paper reviews key measures made in recent years and clarifies critical steps that the country must take to make a successful transition. We first examine the direction of regulatory reform corresponding to the Fourth Industrial Revolution and how developed countries are rapidly moving to conceive the optimal regulatory design to promote innovation. Then, we highlight the major efforts South Korea has made in recent years to initiate regulatory reform and the fundamental challenges that remain. Lastly, we dive deep into regulatory reform for health care innovation, particularly as the government pledges to build a world-class bio-health industry over the next decade. We also approach regulatory reform from a public perspective, discussing how to encourage civic participation through open-minded communication and information-sharing with the public. As the South Korean society lacks trust towards new technologies and data usage, it is crucial to establish credibility of emerging industries as well as a balanced understanding of the potential benefits, ironing out conflicting views between stakeholders