KOTRA Express sat down with Mr. Chang to hear about the advantages of the Korean business
environment, his vision for Invest KOREA, and what he’d like to accomplish during his term.
What are your thoughts on serving as the new head of Invest KOREA?
Attracting foreign investment that leads to the direct inflow of management components including technology and capital, is one of the most important means of economic growth of a country. On one hand, I am honored and pleased to have the opportunity to lead an agency dedicated to promoting investment, but on the other hand, I’m filled with a great sense of responsibility. I’ll do everything in my power to effectively fulfill the duties assigned to me.
Along with Korea, other Asian countries such as China, Japan and Vietnam are making various efforts to attract foreign investment. What are some of the unique strengths of the Korean market?
Korea has a geographical advantage, boasts the world’s third largest FTA network, and possesses innovative competitiveness.
Korea is located at the center of Northeast Asia, a region that makes up around 25 percent of global GDP. It neighbors 147 cities with populations of over one million. Korea also offers outstanding logistical infrastructure, such as Incheon International Airport which directly connects Korea to 196 cities in 54 countries, and Busan Port which sits at the center of the world’s key sea routes. Moreover, there’s great potential for Korea to expand to the Arctic routes and establish land routes throughout Eurasia.
An even greater advantage than Korea’s geographical location is its vast FTA network. Korea is the only member of the G20 to sign FTA agreements with the world’s three largest economies: the United States, China, and the European Union. These FTAs provide Korean businesses with access to the world’s major markets with zero or low tariffs.
Lastly, Korea is a country of innovation. It topped the Bloomberg Innovation Index for five consecutive years in recognition of its innovative capabilities. It is also the second largest investor in R&D. Korea is among the world’s top five and Asia’s number one for the number of researcher concentration and high-tech density. In fact, Korea is one of the most active countries for patents and holds the fourth largest number of patents in the world.
Such strengths have attracted more than half of the Fortune 500 companies to Korea and has placed the country in the top five of the World Bank’s Ease of Doing Business Index. The total amount of foreign investment to Korea increases by the year, which tells us that overseas companies are highly assessing the Korean market.
We are seeing changes in both the internal and external environments of Korea. What are the changes that draw your attention? Also, do you have a specific area you’d like to focus on for attracting more investment?
In terms of the external environment, I am currently interested in the mega trend referred to as the Fourth Industrial Revolution. At the national level, I’d like to focus on creating jobs, which is a major task of our times.
We’re working to attract investment from businesses in cutting-edge sectors, including those related to the Fourth Industrial Revolution, to secure new growth engines for our industries. We will also identify the sectors that Korea is leading in or the areas with high potential, and enhance competitiveness in those areas by strengthening cooperation between Korean and foreign companies on supply chains and technology.
We also plan to prioritize attracting investment to industries with the highest potential for creating jobs. It’s important to actively attract investment in the high value-added service sector as well as conduct investment projects that will boost the creation of new jobs.
Do you have any future marketing strategies in mind for attracting more investment to Korea?
We’re looking to carry out strategic IR activities to attract foreign direct investment. We’ll also strengthen our support for foreign-invested companies by utilizing pull marketing strategies such as Invest Korea Market Place (IKMP).
While our IR activities will target all regions across the world, we’ll be taking a more strategic approach, selecting key industries by region and country, as well as conducting activities to attract pinpoint investment from target investors.
In addition, we plan to expand on other pull marketing strategies centered on investors’ needs. In other words, we plan to identify the investment needs of top global companies and arrange investment meetings between them and Korean tech firms. To this end, we established a digital hub for foreign investment called the Invest Korea Market Place (IKMP) which increases the exposure of Korea’s promising startups, SMEs, and mis-sized companies looking for investment to foreign investors.
Finally, we plan to expand support for foreign-invested companies already doing business in Korea. Providing follow-up care for existing foreign-invested companies is crucial, given that about half of foreign investment to Korea comes from additional investment made by existing investors. We will support foreign-invested companies in local recruitment processes and listen closely to their needs by organizing roundtables for foreign-invested companies by industry.
1)* As of 2017, additional investment accounted for 54 percent, new investment for 44 percent, and long-term loans for 2 percent of total investment.
What do you think is Invest KOREA’s role in the Korean economy from here on out?
Korea has attracted USD 20 billion worth of foreign investment for three consecutive years and attracted the largest amount ever of USD 22.94 billion last year. It’s now time for Invest KOREA to focus on qualitative, rather than quantitative growth to take on the role as a trustworthy partner.
Specifically, we need to be a reliable partner to Korean startups, SMEs, mid-sized companies as well as to foreign investors while supporting the globalization of companies. Also, as a partner to foreign-invested companies, we need to support their business activities in Korea such as their efforts to recruit qualified talent locally. As a bridge between FDI and the Korean people, we need to raise awareness on the importance of attracting foreign investment and make Korea a more business-friendly country.
My goal is to do all I can to ensure that Invest KOREA fulfills such pivotal roles, and contributes to the globalization of Korean companies as well as to national economic growth.
What’s your vision for Invest KOREA and do you have a particular goal you’d like to achieve during your term?
If I have to choose one goal I want to achieve during my term, it would be attracting investment that will truly help the Korean economy. Apart from attracting more investment in the quantitative sense, I hope to inject steam into the Korean industrial ecosystem by attracting headquarters of global enterprises, companies with cutting-edge technologies, and businesses with high potential for job creation to Korea.
Do you have any last words for the readers of KOTRA Express?
It’s a pleasure to greet you all through this interview. Korea is a relatively small country, but the advantages of our business environment have garnered global attention. I’m certain that Korea will be an outstanding business partner to you.
Invest KOREA will continue to work tirelessly to support your efforts to expand to the Korean market. I ask for your interest and encouragement, and please don’t hesitate to contact us for any questions or information on doing business in Korea.
By Grace Park
Investment Public Relations Team
Korea Trade-Investment Promotion Agency (KOTRA)