Japan is rolling up its sleeves to deregulate its labor market and cultivate talent to strengthen the competitiveness of advanced industries such as artificial intelligence (AI) and semiconductors. Prime Minister Sanae Takaichi plans to direct this week's Japan Growth Strategy Council to expand the "discretionary work system," which flexibly applies the 40-hour statutory workweek, and to reorganize university quotas and increase grants to secure science and engineering talent, the Yomiuri Shimbun reported on the 19th. In pursuit of a "strong economy," the Takaichi government has set aggressive strategic industry targets, including a 30% global market share for physical AI robots and 40 trillion yen in semiconductor sales by 2040, and appears to be hurrying institutional reforms to support expanded investment and enhanced technological capabilities. It is also sparing no bold support measures, such as providing an additional 631.5 billion yen in subsidies to Rapidus, the foundry company that will spearhead the "semiconductor revival."
In contrast to Japan's accelerated reform of systems sought by businesses to drive economic growth, Korea's "corporate revitalization" policies have been slow to advance. A prime example is the "52-hour workweek exemption" for research and development (R&D) personnel, which was omitted from the Semiconductor Special Act passed by the National Assembly in January. Follow-up discussions have been spinning their wheels for three months already, owing to the ruling party's passive stance in the face of opposition from labor groups. Even as analyses show that Korea's labor law flexibility ranks last among nine major countries including the United States, Taiwan, China, and Japan, the government and ruling party have instead been preoccupied with legislation such as the Yellow Envelope Act that further aggravates labor rigidity. While global competitors race ahead with full government backing, Korean companies are struggling shackled by labor regulations whose uniformity is unparalleled worldwide.
Leaving innovation-blocking regulations unaddressed will make it difficult to survive the fierce competition for advanced technology hegemony. Falling behind in the technology race means losing the engine of growth. The International Monetary Fund (IMF) projects that Korea's per capita gross domestic product (GDP) will trail that of Taiwan, its semiconductor rival, by more than $10,000 within five years—a forecast that casts a long shadow of regulations eroding corporate innovation capacity. To strengthen semiconductor competitiveness, the key engine of economic growth, and avoid being left behind in the advanced technology race, Korea too must urgently pursue labor reform focused on work flexibility and the cultivation of top-tier talent.
