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South Korea Business Report

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Discovery Reports

Tech-savvy nation of South Korea has much to offer Western enterprises

Seoul, Busan, Incheon and Yeongjong equipped to serve as dynamic enterprising hubs for foreign businesses

PUBLISHED : Thursday, 01 March, 2018, 11:51am
UPDATED : Thursday, 01 March, 2018, 11:51am

South Korea is often overlooked by Western enterprises when they are looking for a business hub in Asia. Surrounded by superpowers China and Japan, and with its neighbour in the north regularly overshadowing it in the media in times of rising political tension, the land of K-Pop culture is not always the obvious choice for international businesses to set up shop.

However, South Korea has much to offer. According to 2016 gross domestic product (GDP) figures by Britain’s Foreign and Commonwealth Office, the nation is the world’s 11th-largest economy, and the fourth largest in Asia. This nation of 50 million people is known for its tech-savvy population and general wealth – unsurprising for a country that is home to global brands Samsung, LG and Hyundai.

The country tops the Organisation for Economic Cooperation and Development’s (OECD) 2011 PISA rankings for digital literacy among 16 participating nations, including Hong Kong. Its infrastructure includes the world’s greatest broadband penetration, according to the UK’s Department for International Trade (formerly known as the UK Trade Investment).

There are several cities that are equipped to serve as dynamic enterprising hubs for foreign businesses.

The capital Seoul is the largest commercial centre in South Korea with a population about 10 million, with various industrial clusters bordering the outskirts of the city. Seoul National Capital Area (Sudongwon) has more than 25.6 million people, accounting for more than half of the country’s residents, and is considered the world’s second-largest metropolitan area. This area also incorporates most of Gyeonggi province and Incheon city.

The second largest metropolis in the country is Busan, which contains the world’s fifth-largest port. Its skyline is full of skyscrapers, such as the 110-floor tall Lotte Super Tower, and regularly hosts high-profile international business and sports events.

Another important seaport – and key transport hub – is Incheon, South Korea’s third-largest urban area, which forms part of the Seoul National Capital Area where global businesses are based around Songdo International Business District, considered one of the “smartest” cities in the world and the sovereign state’s first free economic zone. Some people have described the hi-tech city – which is built on reclaimed land – as the “smartest smart city in the world”. Another hi-tech locale is Daegu with a population of 2.5 million known for its technology as well as fashion and textiles industries.

The country’s logistics centre is Yeongjong. At least, it aims to be for the international commerce community. Connected to Incheon International Airport, this island is situated off the west coast of Incheon city. Expansion plans for the airport may benefit this site as it means the creation of a special economic zone, a free-trade zone and international business district. The project involves the construction of Terminal 2, which was completed this year in time for the 2018 Winter Olympics.

The promise for smart technologies was kept as the facility integrated 24 full-body scanners and 63 self-check-in counters. The new US$2.5 billion hi-tech terminal is reputedly able to service 18 million passengers a year. The increase in visitors this month will serve Seoul as well as PyeongChang where the Winter Olympics continues until Sunday.

Chungju International Airport is the closest airport to the Osong Bio-Technopolis biocluster that is acknowledged to be South Korea’s health industry hub, 170km south of the capital in Chungcheongbuk-do.

The special zone is designed to attract foreign direct investment in a 4.6 million square metre site, where foreign companies investing in the complex enjoy a range of tax benefits from the local government, including a possible exemption from rent and corporate taxes of up to seven years.