People visit to celebrate Chuseok holidays, the Korean version of Thanksgiving Day, at the Gyeongbok Palace in Seoul, South Korea, Oct 1, 2023. (PHOTO / AP)

SEOUL - South Korea needs to increase productivity through innovation in a bid to overcome the chronically low birth rate and rapidly aging population, the Korea Chamber of Commerce and Industry (KCCI) said in a report Thursday.

The country's potential growth rate had declined from around 4.7 percent in the 2000s to under 2 percent in 2023 after suffering the global financial crisis and the COVID-19 pandemic, it said.

The number of domestic researchers was estimated to reduce from 558,000 in 2020 to 512,000 in 2030 and 437,000 in 2040, according to the report

The potential growth rate would tumble to 0.7 percent in 2040 amid a sharp fall in labor's contribution to economic growth, affected by the low birth rate and aging population, KCCI said.

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The business lobby noted that it would be hard to improve the total factor productivity amid the lower population, adding that the country's comprehensive capability for innovation should be enhanced to get over such situations.

The number of domestic researchers was estimated to reduce from 558,000 in 2020 to 512,000 in 2030 and 437,000 in 2040, according to the report.

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To tackle the expected slide in researchers, the report said South Korea should foster female researchers, encourage the influx of foreign researchers and make use of artificial intelligence.