Even when judged against the dizzying speeds of East Asian economic development, Korea’s recent rise has been meteoric. And its President’s speech this week sets a bullish path for building on this and leading the world out of the COVID-19 pandemic – bringing considerable opportunities for western firms with an eye on international growth.
It was only six months ago that South Korea gave up its ‘developing country’ status at the WTO. Yet this week, President Moon Jae-in — buoyed by sky-high approval ratings and international acclaim for his government’s handling of the coronavirus outbreak — used his speech to the nation to insist Korea is now ready to lead the world out of the pandemic.
In reality, Korea has been a developed economy for a long time, but was reluctant to give up the extra tariff leeway given to countries identified as ‘developing’ by the WTO. In the end, it was pressure from the Trump administration that forced Korea’s hand, but the change neatly captures the evolution of how Koreans see themselves.
I’ve seen Korea grow in confidence ever since I arrived in the country in 2004, but especially so since the global financial crisis. President Moon’s speech this week felt like a declaration that Korea will no longer be content with merely sitting at the top table: it will increasingly lead those sitting around that table.
So, should we expect a more belligerent Korea as we’re seeing from China - another country that’s taken pride and confidence from its handling of the virus?
I don’t think so. President Moon laid out a vision for how Korea will assume and maintain a global leadership position, and it’s a vision that presents positive opportunities for international companies looking for new growth markets.
President Moon made three broad points.
Global cooperation – and ‘human security’
Firstly, he stressed that Korea’s post-COVID-19 leadership will be based on the values of global cooperation and openness, with ‘human security’ at its centre. This may sound trite, but it’s an important point of differentiation for the country.
Korea is heavily dependent on global export markets and it’s determined to champion an open global trading system. But this doesn’t just mean low tariffs: it also means an openness to — and mutual recognition of — standards, norms, certifications and regulations that ease trade across borders.
The emphasis on ‘human security’ refers to a move away from traditional military security towards threats posed by disease, disasters and environmental degradation. By putting the citizen first, it points to the liberal values Korea shares with the west and its unease with oppressive politics.
Korea rightly takes great pride in the fact that, even in its darkest days of the coronavirus outbreak, it never locked down anything more than an apartment block. Its containment efforts have relied almost entirely on persuasion rather than coercion.
Korea has arguably the most advanced ICT infrastructure in the world and yet also robust personal data protection laws. If you’re looking for an advanced, rapidly-growing market for your data-based solution which largely accords to international standards around the treatment of data, Korea could be a great market to explore.
Secondly, Korea will drive domestic consumption as a new economic growth engine. The country’s exports have taken a huge hit from the lockdowns around the world and, after 99 consecutive months of trade surpluses, it recorded a deficit in April.
The government has committed over 10% of GDP to supporting the economy through this.
Korea is also bolstering its social welfare programmes and encouraging its consumers to go out and spend on goods and services, while much of the rest of the world is stuck at home.
Increasing domestic consumption will make the country more attractive to international companies, pull in imports and increase the country’s economic power. A country with more than 50 million consumers and GDP per capita of over US $30,000 is no slouch now. It’ll become even more attractive in the future.
If you’re a brand looking for a growing consumer market that punches far above its weight in influencing global trends, give Korea serious consideration.
Finally, President Moon set out the goal of establishing Korea as a ‘digital powerhouse’ for the post-COVID era.
In this, he is placing emphasis on three technology areas: biohealth, system-on-chip semiconductors and vehicles of the future.
He also promised a huge wave of investment in a ‘Korean new deal’ to create jobs through the roll-out of 5G and related digital infrastructure.
Meanwhile, companies around the world are starting to reconsider their future investments in their supply chain in China. And Korea is keen to carve out a position as a reliable, open, transparent manufacturing destination and to build industrial clusters around digital technologies.
Open for business
So, while respecting global standards, Korea is clearly going to play an ever-larger role in influencing the direction of the fourth industrial revolution. And the bold scale of the country’s ambition is clear from the President’s speech this week.
If your company has products or services in relevant areas from AR or IoT to digital health or ADAS, South Korea is swiftly becoming a confident, fast-growing post-coronavirus market that you can’t afford to overlook.
If you’d like to discuss any of the topics in this post, you can reach me on email@example.com