A framework bill to develop South Korea's service industry, blocked in the National Assembly for 15 years over concerns about the commercialization of health care, is facing another legislative test. With a compromise that excludes matters governed by health care statutes from the bill's scope now reflected in most of the measures introduced by both parties, the government has again asked lawmakers to enact the law this year. The aim is to build a government-wide support system to grow services into a new growth engine alongside semiconductors.
"We need a second and a third runner that can race alongside semiconductors and drive growth," Deputy Prime Minister Lee Hyoung-il said on the 14th at a meeting of economy-related ministers that also served as a task force session on service industry development. "I ask for the National Assembly's active attention and cooperation so that the service industry bill now before it can be enacted this year."
Debate over the bill began in 2011 under the Lee Myung-bak administration. The government at the time submitted legislation to the National Assembly to support regulatory reform and assistance across the service sector, including finance, health care, education and tourism. The goal was to secure new sources of growth after the global financial crisis. But it ran into opposition from critics who argued that treating health care as an industry to be nurtured could undermine the sector's public function by opening the door to for-profit hospitals.
Successive administrations pushed the legislation again, but none got it through the National Assembly. The Yoon Suk Yeol administration in 2023 accepted a plan to exclude matters set out in four health care statutes, including the Medical Service Act, from the bill's scope, but the legislation still failed. Four versions of the bill, introduced by lawmakers from both parties, are now pending in the National Assembly. Three of them contain clauses excluding five health and medical statutes, including the Nursing Act.
The government is pursuing the bill again on the basis of that compromise. It judges that the dispute over health care commercialization, once the biggest obstacle, has largely been defused. "With both parties reaching common ground on excluding health care statutes, the core points of contention have largely been resolved," an official at the Ministry of Economy and Finance said. Still, whether the fiscal authorities are the right body to oversee service industry policy could remain contentious. "Individual industries will be handled by the ministries that oversee them, while the Ministry of Economy and Finance supports common infrastructure, such as closing policy gaps and building statistics," the official said.
The government also announced measures the same day to expand K-beauty, now centered on cosmetics manufacturing, into a higher-value service business. It will consider a pilot program to ease visa requirements for medical and wellness tourism aimed at foreign visitors, and will create a 25 billion won ($17.5 million) venture fund to invest in startups. It will also support companies in obtaining certifications needed for overseas exports. Another 7.2 billion won ($5 million) will go toward developing artificial intelligence for cosmetics manufacturing and quality control. Skin data on more than 17,000 people in 18 countries, held by the Korea Cosmetic Industry Institute, will be processed for AI training and provided to companies.
Reorganizing the K-beauty support system, now scattered across ministries, remains a task. Promotion of the cosmetics industry currently falls to the Ministry of Health and Welfare, safety management to the Ministry of Food and Drug Safety, and tourism to the Ministry of Culture, Sports and Tourism. Even statistics on the domestic market for customized cosmetics are not properly compiled. "Support for domestic service industries falls short relative to their growth potential," said Joo Hwan-wook, director general for policy coordination at the Ministry of Economy and Finance.
