This is the second in a series of interviews with international experts on Korea offering advice to President Moon Jae-in on how to overcome challenges and create a better future for the Korean people. ― ED.
Among them, the most urgent should be political reform that can help Cheong Wa Dae and the government restore confidence and trust.
In particular, it is important to strengthen the balance of power among the three branches of government.
This is because the concentration of power in the executive was one of the key factors behind the worst-ever political scandal that ousted former President Park Geun-hye from office.
Mauro Guillen, director of the Lauder Institute at the University of Pennsylvania's Wharton School, said Moon should take the initiative in reform and change by redefining the role of presidency.
This means Moon should set himself apart from his predecessors who enjoyed great power under the "imperial presidential system," which many believe was the root cause of many political scandals that put some former presidents behind the bars.
"Most important is to reestablish the role and stature of the presidency. The new President needs to personally behave in a very elevated and ethical way to reestablish trust in the office," Guillen said in an interview.
It will require being 100 percent observant of the Constitution and the law and being very prudent, he said. "He also needs to show young people politics is a fair game and policies can help them."
In order to make the economy more relevant in the 21st century, Guillen, the author of "The Limits of Convergence," a book regarding globalization and organizational changes in Korea, Spain and Argentina, said Moon should revamp two sectors _ the service industry and education.
"The most important aspect is to continue reforming the service sector so it is as competitive as possible," he said. "It's about having more competition in infrastructure to reduce costs. That will make the economy more competitive."
He pointed out evidence from Europe shows that when there is more competition in infrastructure services, there is more investment and the prices for companies and consumers drop.
"Another important issue is to continue investing in education, so as to stay ahead of the changes in the global economy," he added.
More investment in AI, robotics
In particular, in order to survive in the era of the Fourth Industrial Revolution, the professor called for the new administration to expand investment in future industries and create an ecosystem to foster more internationally competitive players.
"Companies in South Korea need to start investing in innovative industries, such as robotics, artificial intelligence (AI) and driverless cars," he said.
"And new startups ought to have the conditions to thrive. Korea needs to create a more vibrant entrepreneurial ecosystem so it is not just chaebol that innovate. Therefore, reform of the small business sector is necessary."
To tackle the youth unemployment issue, Guillen suggested Moon come up with measures to fix the job mismatch by introducing diverse vocational training programs.
"The key is to align training with the needs of companies. That is something that requires collaboration between government and businesses," he said.
As for the renegotiation of the Korea-U.S. Free Trade Agreement, he said the new leader needs to take a realistic approach by acceding some demands from the Trump administration.
"The South Korean market may have to become more open to foreign-made goods, but even then, it is unlikely U.S.-made cars or other goods will be purchased by Koreans," he said.
"So I think South Korea could agree to some concessions with the U.S., knowing Korean consumers will still prefer goods from other countries."
He added that in response to growing protectionism triggered by Trump's "America first" policy, the Moon administration should diversify markets abroad.
"South Korean companies should continue to expand in Asia, the Middle East and Africa. Those are the markets of the future. Europe and the U.S. will become smaller as a percentage of the total," he said.