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KMID : 1170320060120010001
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Korean Journal of Health Economics and Policy
2006 Volume.12 No. 1 p.1 ~ p.32
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A Comparative Study of Health Industry Competitiveness among 7 OECD countries: Porter`s Diamond Model Approach
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Kang Sung-Wook
Shim Jae-Sun
Kwon Young-Dae
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Abstract
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his paper examines health industry competitiveness among 7 OECD countries(USA, England, Germany, France, Canada, Japan, South Korea), based on Porter’s diamond approach. The Health Industry Competitiveness Index (HCI) of Korea is much less than those of other six countries, which is 26 percent of that of USA, 33 percent and 38 percent compared those of Germany and Japan respectively. Korea is the lowest ranked among the seven countries in terms of four determinants of HCI: 1) Factor Condition, 2) Demand Condition, 3) Related and Supporting Industries, and 4) Firm Strategy, Structure and Rivalry. In particular, Korea is assumed to have weak point in the perspective of Factor Condition and Related & Supporting Industries because of low capital investment as well as insufficient R&D investment on health industry. On the other hands, it seems to have strong point in the perspective of Demand Condition and Firm Strategy, Structure and Rivalry due to high sophistication of customer, growing domestic market, and high competition in health industry of Korea. This paper suggests the following strategies to reinforce the health industry of Korea: 1) an incentive system for capital investment, 2) a strategy for increasing investment in R&D, and 3) a cluster strategy between health industry and related industry. Permission of for-profit hospital, which is illegal in Korea, might be considered as a policy intervention for the strategies. Given little difference in efficiency and service quality between for-profit hospital and not-for-profit, however, it should be required to analyse the outcomes of for-profit hospital compared to those of not-for-profit in detail and in the various perspectives before for-profit hospital would be permitted legally.
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KEYWORD
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Health industry competitiveness, Diamond model, For-profit-hospital, Not-for-profit hospital, National competitiveness
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