Invest KOREA

Newly appointed as Honorary Ambassador of Foreign Investment Promotion for Korea, Micheal Danagher has an extensive career in Canada’s foreign service, and served as the Ambassador of Canada to the Republic of Korea from 2018 to 2021. Based on his rich experience and knowledge of Canada-Korea relations, he is also a member of the steering committee at the Canada-Korea Forum. Read on to find out more about his career experience and the advantages he thinks Korea offers for foreign investors.

How did you become interested in Korea?

During my career, I served on three separate occasions in Seoul, as part of the Canadian Embassy. More specifically, for much of this time I served as a trade commissioner and played a role in matching Canadian companies with opportunities in Korea. I was the first Canadian diplomat to study Korean full-time, and I used to be fairly fluent. Not so much anymore, but I still understand most of what is spoken to me!

What about Korea’s economy/culture/history appeals to you the most?

There are many aspects of Korea that I admire. The people work hard, but are usually cheerful and kind. Personal relations matter a lot in Korea, and we have made many life-time friends. As a lover of sports, I also like Korea as a country with a vibrant culture of athletics, and, as a Canadian, I like Korea’s four-season climate, especially the spring and the autumn.

Are Canadian companies interested in investing in Korea? What sort of opportunities/sectors are they most interested in?

Investment is an area where the two countries have considerable potential. Korean companies have a long history of investment in Canada—partly as a key entry point to the NAFTA market, but also out of interest in Canada’s profile as a major resource base and a part of secure supply chains. Canadian investment in Korea has been lower profile, historically. Canada is one of the top 10 sources of outgoing FDI in the world, but have been concentrated in the finance and extractive sectors, and geographically in the United States and in Europe. This has resulted in a relatively smaller profile for Canadian investment in countries like Korea.

This should change. For one, Korea has become a far more welcoming environment for incoming investment. Korea has a business environment which combines a sophisticated strategic approach, with sectoral policies based on consultation with its business communities, and ranks 6th in the Global Innovation Index. That lends itself well to matching opportunities with investors, with a “one stop” approach which is among the most attractive in the Indo-Pacific region. Of course, this will also be supported by the good reputation which Canada, and its companies, has in Korea.

Korea’s priority sectors represent real matches for Canada’s capabilities, with significant overlap with Canada’s own sectoral strategies and strengths. Sectors such as batteries and fuel cells, biopharma (especially vaccines), manufacturing and renewable energy all represent opportunities. Korea’s biggest asset is its people, with a well-educated and globalized workforce.

Korea also offers Canadian companies a stable platform to access regional and global markets, and to partner with some of the most globalized companies in the world. Korea has diverse and global trading ties, and its network of 21 FTAs (with 59 countries) is one of the largest of any country in its region. Korean companies are also among the largest investors in many Indo-Pacific countries, potential partners for Canadian companies looking to expand into these emerging markets.

What advice would you give these investors/companies from your country seeking to do business in Korea?

While Korea has many advantages, the business culture is rapidly evolving and can often be difficult to understand. While English is much more widely used than before, Korea is home of a unique culture, which should be understood, at least to be able to leverage its assets. A little interest in the culture, the language and the people will go a long way. Korean workers perform well in times of challenges, willing to commit long hours and energy in a group setting. But there is also a growing understanding of work-life balance, and the distractions that a rapidly changing social environment can produce.

How can Korea be a more ideal country for Canadian companies?

This is a difficult question, since I don’t expect any country to “be a more ideal country” for Canadian investors! I think Korea has a lot to offer, as I have already described. But it is fair to say that some of the comments I received from Canadian investors were around the ease of immigration approvals, the availability of some support services, and some of the regulatory environment. I believe Korea is now making progress in these directions.

In what ways do you think Canadian and Korean companies can work together to deepen their economic relationship?

For Canada, Korea has been an important commercial partner in the Indo-Pacific—the first partner in the region with which we had a free trade agreement (CKFTA), in 2014. In 2022, both countries also issued their own Indo-Pacific Strategies—with significant commonalities in viewpoint and approach—and upgraded our bilateral ties to a Comprehensive and Strategic Relationship. Promoting commerce is central in all of these. The Canada/Korea Science and Technology Agreement (2016) directly supports joint research in sectors of mutual strategic interest. Other bilateral initiatives, such as in defense industry cooperation, will create additional focus in specific areas.

Personally, I think more promotion and more resources will help cement the relationship. I also look to the leadership of both countries’ private sector. The FKI and the Business Council of Canada, for example, have a regular CEO Dialogue, designed to look at areas of mutual priority and interest.

What would you like to accomplish in your time as Honorary Ambassador for Foreign Investment Promotion for Korea?

I would like to see an increase of Canadian investment in Korea. This will bring an extra element to the Canadian commercial relationship with Korea, already strong on many measures. These investments will help Canadian companies succeed in the Indo-Pacific, which is increasingly the global center of business.