The government will cut red tape, write special laws and promote competition to help develop seven service sectors into a new growth engine.
During a meeting led by President Park Geun-hye on Tuesday, the government identified medical, tourism, financial, distribution, software, contents and education industries as promising service sectors and confirmed a string of measures to boost investment in them.
"We will create momentum for our economy to escape from its heavy dependence on exports and the manufacturing industry, and will aim for growth that's led by the service sector and domestic demand."
It will streamline regulations to lure foreign, for-profit hospitals and provide subsidies for hospitals that attract foreign patients to Korea.
The plans call for more than doubling the number of foreign patients to 500-thousand by 2017 from 210-thousand last year.
It will also push through four resort complex development plans on the islands of Yeongjong-do and Jeju that will boost investments by around 8-and-a-half billion U.S. dollars.
Regulatory reform will also take place in the nation's financial sector.
The government will gradually ease the current 15 percent limit on daily stock price movement to 30 percent.
It expects the measure to stimulate the local stock market and strengthen the market's price-setting mechanism, although there are concerns that it could fuel stock price volatility.
Overall, the measures, which come as part of President Park's three-year economic innovation plan, are expected to boost investment by around 14-and-a-half billion dollars and create 180-thousand jobs.
Hwang Ji-hye, Arirang News.