Comparison of the Roles of the South Korean and Japanese Electric Power Sectors in Their National Economies

Abstract

The growing demand for electricity, driven by factors such as the shift to carbon neutrality and economic growth, is a challenge shared by South Korea and Japan. South Korea, a peninsula nation, and Japan, an island country, which are both heavily dependent on foreign energy sources and have manufacturing-based industrial structures, are actively working to secure stable power supplies for their economic development. This article carries out a quantitative analysis of the roles of the South Korean and Japanese electric power sectors (EPSs) in their respective economies, seeking to identify differences and generate actionable insights for decision making and policy formulation. Utilizing the input–output (IO) technique with the latest available data, the analysis includes a demand-side model, a supply-side model, and a price-side model to examine various effects of the EPSs. The key findings reveal differences in the production-inducing, value-added creation, and job-creation effects between the two countries, highlighting operational disparities in their electricity sectors. Additionally, South Korea exhibits higher wage-inducing, supply shortage, and price-side effects than Japan, because of its public enterprise-oriented high-wage structure and a substantial manufacturing sector. These quantitative results provide valuable reference material for future government decisions and policy development in the EPS and emphasize the significant role and impact of the power sector in both countries.

Keywords

• electric power sector
• economic effect
• national economy
• input–output technique
• South Korea
• Japan