Deputy PM vows 'world-class business environment' as industry groups urge flexible retirement reform

Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il said Wednesday the government would work to "remove on-the-ground obstacles blocking corporate investment and build a world-class business environment brimming with creativity and vitality."

Lee made the remarks at a meeting with the heads of six major economic organizations held at the Korea Chamber of Commerce and Industry in Seoul, where he also pledged to "pursue preemptive, large-scale future investment through three mega-projects and other initiatives."

Attendees included Chey Tae-won, chairman of the Korea Chamber of Commerce and Industry; Ryu Jin, chairman of the Korea Enterprises Federation; Yoon Jin-sik, chairman of KITA; Kim Ki-moon, chairman of the Korea Federation of SMEs; Choi Jin-sik, chairman of the Korea Federation of Mid-sized Enterprises; and Lee Dong-geun, standing vice chairman of the Korea Enterprises Federation.

"I believe that real, tangible change felt by businesses starts with voices from the field," Lee said. "Policy can translate into meaningful results only when the government and the private sector work together on the ground to identify problems and find solutions." He added that the government would continue to gather companies' on-the-ground concerns and work with related ministries to resolve them promptly.

Assessing the current economic situation, Lee said growth momentum was expanding on the back of a global semiconductor boom even amid difficult conditions, but cautioned that structural challenges remained — including persistent cost-of-living pressures, a declining working-age population, stagnating productivity, a falling potential growth rate and widening polarization across sectors.

He said the government would intensify policy efforts to reverse the decline in potential growth and ease polarization as South Korea strives to become an "irreplaceable nation." He pledged to mobilize all available resources and policy tools across three core social policy areas — housing, employment and grassroots finance — with a particular emphasis on youth support.

The government has been visiting business sites alongside the six economic organizations to hear their concerns, incorporating improvement tasks into major policy packages on field-centered corporate investment and innovation support on two separate occasions.

Among the measures announced, the government will allow integrated bidding for electrical and telecommunications work when installing semiconductor fabrication facilities, enabling faster fab scale-up. Under current rules, such work must be put out to tender separately, preventing general construction companies from overseeing the entire project and creating difficulties in safety management, schedule coordination and timely repairs.

The government also plans to cut the permitting process for a 4 trillion won ($2.98 billion) investment project to convert an Ulsan internal-combustion-engine vehicle factory into an electric vehicle facility, reducing the timeline from three years to within one year.

Additional measures include allowing separate permit applications for factory scale-ups within large industrial complexes, independent of existing building permits, and clarifying safety standards so that collaborative and new-type robots can be used in workplaces without enclosures. The government will also pursue rezoning of green-belt land in the Ochang Science Industrial Complex to allow expansion of biotech manufacturing facilities, and expand support for the development and demonstration of next-generation actuator technology.

Lee urged the business community to "continue sharing opinions and cooperating so that voices from the field are fully reflected in policy."

Business groups asked the government to ensure that permitting, infrastructure and necessary support keep pace with companies' investment schedules. They also raised the need for tailored AI support for small and medium-sized enterprises to help narrow the gap between large and small businesses.

On the retirement age, the groups proposed a flexible approach that would draw on the accumulated experience of older workers through post-retirement rehiring while preserving job opportunities for younger generations. Representatives of the economic organizations expressed hope that the launch of the new economic team would mark the start of a year in which growth rebounds, and pledged to continue actively conveying on-the-ground perspectives through the public-private consultative body and other channels.