SEOUL, March 20 (Korea Bizwire) — South Korea’s smart health care industry that is viewed as a next growth engine for the country has been at a standstill for the past five years due to lack of policy coordination, a report by a local think tank said Sunday.
According to the Korea Institute for Industrial Economics and Trade (KIET), the country’s health care-related businesses have been growing steadily in size over the years, but there has been a lack of growth in services provided by local companies.
“In the 2010-2015 period, the number of smart health care companies grew 5.8 percent annually to reach 500,” it said. Of the companies in operation, 53 percent were in equipment manufacturing and 24 in parts, with those in the service sector standing at just 6 percent.
The state-run think tank said that this is limiting overall growth of the industry as a whole.
KIET said total domestic sales in smart health care stood at 101 trillion won (US$89.3 billion) as of 2015, not much different from 100 trillion won reported five years earlier.
“The proportion of companies actually providing health care services to consumers are very small, with many in these areas suffering from heavy debt,” the latest findings showed. Such a development raises the risk that companies may be forced to close.
The debt ratio of health service providers and content developers stood in the 60-70 percent range. KIET added that many of these companies were small and medium-sized enterprises (SMEs), with their average numbers of employees not exceeding 50.
The report then said that to overcome existing challenges, revisions to existing laws and rules must take place through policy coordination.
“There is also a need to address the imbalance in the local business environment that is centered on manufacturing,” it said, emphasizing the need to provide more diverse services to consumers to fuel more growth.