South Korea has been in the news recently but the story that didn’t make the headlines is the strength, resilience and growth of its economy. This might sound irrelevant but to UK businesses it should be taken seriously as it identifies an opportunity waiting to be exploited.
In the last 60 years South Korea has been quietly and determinedly creating a robust, highly developed economy that proved itself by being one of only a handful of OECD countries that didn’t go into recession in 2009. This resilience has been instrumental in driving the economy forward and it is now predicted to grow by 5.7% this year (source: IMF April 2010). This is over twice that of Japan and four times that of the UK.
Located between two great powers, Japan and China, South Korea remains off the beaten track to most UK companies even though it is home to 49 million people, who have an average income of over $20,000, and is the world’s 15th biggest economy.
This lucrative and vibrant market has been influencing the west’s product dependant society with their high quality semiconductors, mobile handsets and TFT-LCDs for the last few years. In addition, sea freight would be at a loss without South Korea as it is the world’s second largest shipbuilder and the automotive sector has seen the emergence of reliable Korean cars; currently South Korea is the fifth largest car producer in the world. Well-known South Korean brands include Samsung, LG, Hyundai, KIA and Daewoo to name but a few.
Whilst businesses and the media have focused on the BRIC (Brazil, Russia, India and China) economies, South Korea has gone from an inward looking economy dependant upon locally produced products, to an open, stable economic powerhouse providing support to developing countries. This rapid rise is set to continue with South Korea’s drive to increase international trade, through the signing of a number of Free Trade Agreements (FTA).
The EU/Korea FTA, due to be implemented in January 2011, is predicted to generate €19bn for European companies by removing 97% of tariffs. As the agreement covers such a large variety of sectors it is likely to affect your business. This opportunity will provide UK companies with a first mover advantage against US ones as their FTA is delayed in the Senate. To help you follow in the footsteps of the likes of Burberry, Tesco, Diageo and AstraZeneca UK Trade & Investment has identified 100 specific opportunities that will be created as a result of the EU/Korea FTA.
With South Korea growing strongly the global recession appears to have passed them by, instead they have been one of the key drivers of the global economic recovery. For UK businesses this means there is business to be done and contracts to be won, so investigate this once forgotten country and embrace the very real business opportunities.
Further information www.ukti.gov.uk/southkorea
Richard Webster, UKTI South Korea