McKinsey Global Institute is the globalization think tank of top management consulting firm McKinsey & Company.  Managing Director Wonsik Choi and Director Richard Dobbs penned an excellent article on the current state of the Korean economy over at Project Syndicate.

The upshot is that Korea has made excellent progress in development, but they have formidable hurdles ahead to get to the next level.  The chaebols are world class competitive companies, but they create increasingly fewer jobs at home and no real wage growth.  However, Koreans’ small to medium sized business and the overall services sector is very underdeveloped, so there are very few economic growth generators beyond the chaebol, who are more concerned about their respective empires rather than overall Korean economic growth or the well-being of the rank and file population.

Koreans need more entrepreneurs rather that just tiny family businesses.  Korean schools are difficult and good at teaching the basics, but are unproductive.  Vocational training is not empathized as much as they should be.  Koreans are also not having enough kids, so on and so forth.

Although the above is a good summary, it’s worth a read.  Anything that McKinsey people write are always interesting reads.

Any way, this is all stuff I’ve been blogging about for years here, here, here, here and here.

Update: The Japan Times has an even starker (but no less true) assessment.