🚨 Shrinking Society

Today Korean Social News for Beginners | 2025.10.24

0️⃣ Science and Technology Innovation Strategy for Population Decline and Low Growth

📌 'Shrinking Society' with Population Decline and Low Growth - Looking for Solutions Through Science and Technology

💬 At the National Future Forum held in Yeouido, Seoul on the 23rd, experts said that science and technology should be the key focus of national growth to deal with the 'shrinking society' caused by population decline and low growth. Yoon Ji-woong, president of the Science and Technology Policy Institute, talked about the need to improve the research and development system and redesign jobs. Jung Cheol, president of the Korea Economic Research Institute, argued for creative progress combined with entrepreneurship. Kim Tae-yoon, vice president of SK Telecom, stressed efficient innovation by strengthening AI technology. Experts agreed that science and technology policies that led industrialization in the past should be put back at the center of growth. They also agreed that we need innovation strategies that use AI and robots as the foundation of national competitiveness and respond to social changes.

💡 Summary

• A shrinking society is one where the economy and working-age population decrease due to population decline and aging.
• We need to increase productivity and secure new growth engines through science and technology innovation.
• Efficient innovation using AI and robot technology and redesigning jobs are key tasks.

1️⃣ Definition

A shrinking society means a society where the economy and working-age population keep decreasing due to population decline and aging. As total population decreases due to falling birth rates, population outflow, and faster aging, we see many changes like shrinking domestic markets, labor shortages, and increasing financial burdens.

South Korea has the fastest aging rate in the world, and natural population decrease began in the mid-2020s. These structural changes go beyond simple population statistics. They require rebuilding the entire national system including economic growth, social welfare, and balanced regional development.

💡 Why is this important?

• The decrease in working-age population is lowering the economy's growth potential.
• Shrinking domestic markets and weaker tax bases make it harder to manage finances.
• The risk of regional extinction is increasing and balanced national development is under threat.
• We need to shift from past expansion-focused policies to efficiency and sustainability-focused ones.

2️⃣ Current Status and Structural Problems of Shrinking Society

📕 Acceleration of Population Decline and Aging

• South Korea's population structure is changing rapidly. Key facts are:

  • The total fertility rate reached a world-low level of 0.7 in 2024.
  • In 2025, people aged 65 and over make up more than 20% of the population, entering a super-aged society.
  • The working-age population (15-64 years) peaked in 2020 and has been decreasing every year.
  • Since the mid-2020s, more people are dying than being born - natural population decrease has started.
  • According to Statistics Korea, the total population is expected to decrease to about 38 million by 2070.

• Population decline affects the entire economy and society. Main impacts are:

  • Domestic market size is shrinking, reducing companies' willingness to invest domestically.
  • Labor shortages are getting worse in small and medium-sized companies and manufacturing sites.
  • Decreasing school-age population is making it necessary to merge universities and elementary/middle/high schools.
  • Population outflow and regional extinction risks are growing in small provincial cities and rural areas.
  • Medical costs and pension spending are rising rapidly due to aging, increasing financial burdens.

📕 Fixed Low Growth Structure

• Economic growth rate continues to slow down. Main causes are:

  • Growth through increased labor input has become difficult due to decreasing working-age population.
  • Population aging is lowering savings and investment rates.
  • As domestic consumption weakens, companies' sales growth is stagnating.
  • Finding new growth engines is delayed while existing main industries lose competitiveness.
  • Global economic uncertainty and spreading protectionism also limit growth.

• Low growth is reducing vitality across society. Main problems are:

  • Good quality jobs for young people are decreasing, making employment more difficult.
  • Slower income growth is lowering expectations for better living standards.
  • Companies' new hiring and investment are shrinking, reducing economic dynamism.
  • A social atmosphere preferring stability and conservatism over innovation and challenge is spreading.
  • Slower tax revenue growth makes it hard to expand welfare and invest in the future at the same time.

💡 Major Challenges of Shrinking Society

1. Decreasing working-age population: Labor shortage and declining economic vitality
2. Shrinking domestic market: Vicious cycle of decreasing company sales and investment
3. Increasing financial burden: Rising welfare spending and weakening tax base
4. Regional extinction risk: Deepening concentration in capital area and hollowing out of provinces
5. Weakening innovation power: Society preferring stability and lacking challenging spirit

3️⃣ Response Strategies Through Science and Technology Innovation

✅ Shifting to Science and Technology-Centered Growth Strategy

• We must reset science and technology as the key axis of national growth. Main directions are:

  • Like during industrialization in the 1960s-70s, we must make science and technology the top priority for national development.
  • We need to shift R&D investment from quantity expansion to quality and efficiency improvement.
  • Long-term and stable investment in basic research and original technology development is necessary.
  • We must strengthen cooperation among universities, research institutes, and companies to improve the R&D ecosystem.
  • We need to focus on developing strategic fields where we can gain advantages in global technology competition.

• AI and robot technology are the key drivers. Main tasks are:

  • We must improve AI technology competitiveness to increase productivity and advance industries.
  • We need to apply robots and automation technology across manufacturing and service industries to ease labor shortages.
  • We should invest proactively in AI infrastructure like AI semiconductors and data centers.
  • We need to develop AI and robot solutions for aged society needs like healthcare, education, and care.
  • We need balance between ensuring AI ethics and safety while not blocking innovation with too many regulations.

✅ Redesigning Job Structure and Social Systems

• We must transform employment structure into a future-ready one. Main directions are:

  • We should predict and respond to disappearing jobs and newly created jobs according to technology development.
  • We must strengthen lifelong education and vocational training systems to increase workers' adaptability.
  • We need to create flexible work environments that allow more elderly and women to participate in economic activities.
  • We should automate simple repetitive tasks and increase creative and professional jobs.
  • We need safety nets to minimize social costs during job transitions due to technology changes.

• We must spread entrepreneurship and innovation culture. Main measures are:

  • We need to build institutional foundations for startups and small businesses to grow.
  • We should create a social atmosphere that tolerates failure and supports trying again.
  • We must build an open innovation ecosystem where large and small companies, universities and research institutes cooperate.
  • We should expand regulatory sandboxes and negative regulation methods to encourage new attempts.
  • We need to provide incentives for talented people to challenge entrepreneurship and innovation rather than stable jobs.

4️⃣ Related Terms

🔎 Working-Age Population

• Working-age population means age groups that can do economic activities.
  • Working-age population usually refers to people aged 15 to 64, and is an indicator of potential labor force that can participate in economic activities. It is one of the key demographic indicators for judging a country's economic growth potential.
  • South Korea's working-age population peaked at 37.38 million in 2020 and started to decrease. According to Statistics Korea, it is expected to decrease to 33.95 million in 2030, 28.53 million in 2040, and 17.37 million in 2070. This is a fast pace of about 5 million decrease every 20 years.
  • Decreasing working-age population means more than just labor shortage. First, the economy's growth potential decreases. Second, the tax base weakens as the tax-paying population decreases. Third, domestic markets shrink as consumers decrease. Fourth, the burden of supporting the elderly population increases. Therefore, it is urgent to ease the shock of population decline through productivity improvement and technology innovation.

🔎 Total Fertility Rate

• Total fertility rate is the average number of children one woman is expected to have in her lifetime.
  • Total fertility rate is an indicator showing the average number of children one woman is expected to have during her childbearing years (ages 15-49). The population replacement level is 2.1 - if it's lower than this, population will decrease in the long term.
  • South Korea's total fertility rate continuously decreased from 4.53 in 1970 to 1.30 in 2001, falling below the replacement level. It fell below 1.0 in 2018, and is currently at 0.7 in 2024 - the world's lowest level. Compared to the OECD average of 1.58, it's half the level.
  • Main causes of low birth rates are: First, high housing and education costs make the burden of raising children heavy. Second, unstable employment and low income among young people delay or make them give up marriage and childbirth. Third, social environments where it's hard to balance work and family also have effects. Fourth, value changes have made people view marriage and childbirth as choices rather than necessities. The government is pursuing various low birth rate policies, but it's difficult to raise birth rates in the short term.

🔎 Research and Development (R&D) Ecosystem

• R&D ecosystem is a cooperation network of parties that create innovation.
  • R&D ecosystem refers to an organic system where universities, research institutes, companies, and government cooperate to create new knowledge and technology and commercialize them. It means an environment where each party's role works harmoniously, beyond simply investing R&D budgets.
  • South Korea has the world's second-highest ratio of R&D investment to GDP, but is evaluated as having low investment efficiency and result utilization. Main problems are: First, focus is on short-term result-oriented development research rather than basic research. Second, technology transfer rate is low from universities and research institutes to industry. Third, innovation capacity of small businesses is insufficient with large company-centered R&D structure. Fourth, researchers' autonomy is limited by government-led top-down R&D methods.
  • For effective R&D ecosystem building, we need long-term investment expansion in basic research, strengthening industry-academia-research cooperation, researcher-centered bottom-up R&D support, and creating a challenging research culture that allows failure. Also, technology finance and startup support systems that can commercialize research results must develop together.

🔎 Entrepreneurship

• Entrepreneurship is an attitude of creating value through innovation and challenge.
  • Entrepreneurship means the attitude and ability to discover new opportunities even in uncertain environments, create value through innovative methods, and take risks and challenges. It goes beyond simply starting a business - it's the driving force that develops economy and society through creative destruction.
  • Entrepreneurship becomes more important in a shrinking society. First, it can create new industries to supplement declining existing industries. Second, it can ease the effects of population decline by increasing productivity through technology innovation. Third, it can overcome shrinking domestic markets by developing global markets. Fourth, it promotes new forms of business activities like social ventures that solve social problems.
  • To spread entrepreneurship, we need to improve social perceptions of failure. Also, institutional support like funding support in early startup stages, deregulation, and mentoring programs is important. Especially, education and culture must change so young people can challenge entrepreneurship and innovation rather than stable jobs. Creating fair competition environments between large and small companies is also essential for activating entrepreneurship.

5️⃣ Frequently Asked Questions (FAQ)

Q: Does shrinking society only have negative effects on the economy?

A: There are many challenges, but it can also be an opportunity to improve efficiency and quality of life.

• Shrinking society certainly brings many difficulties, but it doesn't necessarily have only negative aspects. First, it can be an opportunity to reduce overcrowding and improve environment. Lower population density can improve living environments and reduce traffic congestion and environmental pollution. Second, we can shift to quality-centered rather than quantity-centered growth strategies. We can focus on productivity improvement and high-value industry development instead of forced quantity growth. Third, as the need for technology innovation grows, advanced technology development in AI, robots, etc. can accelerate. Fourth, we can pay more attention to improving quality of life like work-life balance and increased leisure time.
• However, these positive results don't come automatically. Proactive and systematic policies preparing for population decline and aging must support this. Especially, science and technology innovation, social system redesign, and fair burden sharing between generations must happen together to turn shrinking society into an opportunity.

Q: How should individuals prepare for shrinking society?

A: We must develop lifelong learning and adaptability, and thoroughly manage health and finances.

• There are various things individuals should prepare in shrinking society. First, we should have a lifelong learning attitude. As technology changes faster, it becomes harder to spend a lifetime in one job, so we must build adaptability through continuous learning and retraining. Second, we must improve digital technology and AI utilization skills. Basic digital literacy will be essential in the future labor market. Third, we should develop creativity and problem-solving abilities. As simple repetitive tasks are automated, creative and emotional capabilities that only humans can do become important. Fourth, we should invest in health management. Living a healthy old age in an aging society is important for both individuals and society.
• In economic terms, it's good to start preparing for retirement early and secure various income sources. National pension alone may not be enough, so asset building through personal pension or investment is necessary. Also, it's important to maintain flexible career management and ability to work even after retirement age. Most of all, having an open mind toward change and a positive attitude is the most important mindset for living in a shrinking society.

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