Korea is geopolitically located at the center of Northeast Asian economic region where 25% of the global population lives and 22% of the world GDP is produced. Its strategic location offers quick access to the world¡¯s 2nd largest economy China and another economic giant Japan.
According to the OECD Factbook 2005, Korea ranked 3rd in terms of educational level with 41 percent of the population completing higher education, which is higher than the average of the OECD member countries.
Thanks to high education level of human resources, Korea also ranked 6th in terms of R&D personnel nationwide with 186,200 according to 2006 World Competitiveness Yearbook published by the International Institute for Management Development (IMD) of Switzerland. The allocation of R&D human resources is highly concentrated in private sectors taking up to 63% of the total. In terms of field of study, engineering ranks first followed by science and medical heatlh.
As major universities in Korea set up and operate information & communication research centers along with a growing number of IT-related vocational schools and educational programs, IT experts have grown from 1 million to 1.23 million between 1997 and 2003.
According to 2006 IMD World Competitiveness Yearbook, Korea is very copetitive in the digital era, ranking 1st in the number of broadband telecommunication services, key infrastrcture for IT, sceience and technology, 2nd in patent productivity and 6th in R&D personnel.
Not only high education level of human resources, but also diligent workforce made ¡°the Miracle of Han River¡± possible. Korean workers work for 2,270 hours per year, ranking 7th globally according to the 2006 IMD World Competitiveness Yearbook.
Korea has a number of major competitive industries including shipbuilding, steel and petrochemicals. In shipbuilding, Korea is a world leader having 44% of world market share with advanced design and production capability. In terms of steel production, the 1st and 2nd largest single production sites are both located in Korea (POSCO). Korea is the 3rd largest producer of petrochemicals with leading know-how and advanced technology.
Digital electronic industry is Korea¡¯s another vital industry in the manufacturing sector in terms of exports and value-added production. Korea¡¯s export growth has been boosted by the digital electronic industry which accounts for 38% of the country¡¯s total exports. In 2004, Korea created the world¡¯s largest Plasma Display Panel TV and Liquid Crystal Display TV. Korean MP3 players now lead the global market, surpassing the United States and Japan. In the TFT-LCD world, Korea also ranked first in 2004 with a market share of 41.7%.
Most of all, Korea¡¯s IT industry is wordly recognized with numerous records. Korea has ranked 1st in high-speed Internet penetration for four consecutive years, commercialized CDMA technology, and launched the world's first DMB service, and is fast emerging as a global IT powerhouse.
Rank
Country
Score
1
Sweden
0.85
2
Denmark
0.83
3
Iceland
0.82
4
Korea
0.82
5
Norway
0.79
6
Netherlands
0.79
7
Hong Kong
0.79
8
Finland
0.79
9
Taiwan
0.79
10
Canada
0.78
11
U.S.A.
0.77
12
U.K.
0.76
13
Switzerland
0.75
14
Singapore
0.75
15
Japan
0.75
* Source: International Communication United, September 2004.
In measuring DAI, the level of digital accessibility including wired and wireless telecommunication service subscription rate, cost and speed of Internet access, broadband telecommunication subscription rate, Internet penetration rate and school enrollment rate, Korea gained 0.82 points, ranking 4th after Sweden, Denmark and Iceland, and first among Asian countries. In a survey of IT-related competitiveness, Korea ranked 4th in IT industry performance, 2nd in export competitiveness and specialization, 3rd in return on R&D investment and 6th in IT infrastructure, thereby showing that its IT industry is globally competitive.
The government formulated the ¡°Broadband IT Korea Vision 2007¡± of which the primary aim is to reach a GDP per capital level of USD 30,000. This plan hopes to make Korea a truly strong IT country.
According to the 2006 IMD World Competitiveness Yearbook, the U.S. ranked first in R&D investment with over USD 300 billion, followed by Japan with 135.3 billion dollars, and Germany with 68.4 billion dollars. Korea ranked 9th with 16.0 billion. In terms of R&D capability vs GDP, Korea ranked 9th with 2.63% after Israel with 4.55%, France and Japan with 3.20%, respectively, and the U.S. with 2.66%.
The Korean government¡¯s expenditure in R&D in 2006 reached USD 8.91 billion, 14.2% increase from the previous year which exceeds twice of growth rate of government¡¯s total expenditure (5.9%). This indicates the government¡¯s strong willingess to support for R&D with regonition of R&D as potential for national growth.
Recently, Asia has been rising fast as an R&D hub with excellent human resources and strong price competitiveness. Consequently, many global companies are seeking to build their R&D centers in Korea, signaling potential for Korea to become a R&D center in the Northeast Asia region.
In line with the rapid growth of Korea¡¯s IT industry in recent years, many multinational companies such as Motorola, eBay and Olympus are choosing Korea as a test bed to evaluate consumer response to their new products. Korea makes a perfect test bed for new and sophisticated technologies and new products because Korean consumers are receptive to new ideas, new technologies and new designs. Particularly, Korea¡¯s young generation, who tend to be early adopters, are sensitive to new trends and constantly seek something new, thereby serving as the driving force behind the growth of Korea¡¯s electronics industry.
KORIL FUND > Why Korea?
