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“There’s a lot Korea has done well, but there’s more we can do to help investors love Korea, Honorary Ambassadors of Foreign Investment say
As a part of Foreign Investment Week 2014, Invest Korea held the Press Roundtable for Honorary Ambassadors of Foreign Investment for Korea in late October in Seoul. Hailing from the United States, United Kingdom, France, Belgium, Japan and China, they gathered around a table and swapped opinions as representatives of Korea’s foreign investment environment.
The result? Sixty minutes of insights on the strengths of Korea, suggestions for attracting more foreign direct investment into Korea and a dash of Saint-Exupery.
“We have plenty of ideas,” said Jean-Daniel Tordjman, an Honorary Ambassador of Foreign Investment for Korea from France.
Started by Invest Korea in 2010, the Honorary Ambassador of Foreign Investment for Korea initiative designates prominent business leaders in eight countries as representatives of Korea’s foreign investment environment. These individuals are or have been associated with investment or business in Korea. They help spread the word in their home country about investing here.
The Press Roundtable gave us the rare opportunity to hear from them collectively and directly about what Korea has done well, Korea in relation to China and what we can do better.
The much-covered advantages of Korea, we know: Well-educated and talented human resources, the world’s 5th easiest environment in which to do business, an intense commitment to research and development, a vast free trade agreement (FTA) network and strong industries.
Tordjman, chairman of the Ambassadors Club of Paris and a seven-year Ambassador-at-Large Special Representative of France for International Investment, touched on Korea’s potential to become the financial center of Asia. With the growth of China, the amount of money to be amassed in Asia will require a major financial center in the continent. Tordjman cited various reasons it would be difficult to locate this center in Shanghai, Hong Kong, Singapore and Japan.
“So Korea has a role to play in the next 20 years,” he said. “And if you play well in connection with Japan and China, you will take a leap here.”
Christian Jourquin, an Honorary Ambassador from Belgium and the former CEO of Solvay SA, praised the openness to industry of Korea’s high educational level. The Belgian chemical company Solvay has established the headquarters of one of its business units and a research, development and technology center on the campus of Seoul’s Ewha Womans University.
“They are open for innovation and collaboration,” said Jourquin, of Korean universities. “And that’s for us extremely important because that’s the key to have access to the large groups.”
Tangenting from a comment about the importance of intellectual property, Jourquin added that it’s basically all about the people.
“As level of legal protection, we are extremely happy. But what is more important than the loyalty of people? Because at the end of the day, if people don’t stay with you, you will lose the know-how…,” he said. “We’ve been here in Korea for more than 40 years now. When I look at, I would say, the turnover of personnel, it’s extremely low. So loyalty of people to the company is certainly, I would say, an element of protection.”
Jourquin said he found the effort of Koreans during Solvay’s investment in the Ewha facilities “remarkable” and that they took it as a challenge.
“It reminds me of another previous investment in Korea where expenses were below budget and ahead of schedule. This was the result of the very strong commitment of the Korean teams,” he said.
Jamie Metzl, an Honorary Ambassador from the United States and Senior Advisor at the global investment holding company Cranemere Inc, talked about Korea’s great China-related advantage.
“When you compare Korea and China, there’s really no comparison in terms of soft infrastructure, particularly rule of law and intellectual property protection,” said Metzl, a former Executive Vice President of the Asia Society. “Korea is very well-positioned to be a connector to China where international companies can open manufacturing bases or logistics bases, and where they can have a far greater sense of confidence that their intellectual property won’t be stolen or that they won’t be subject to arbitrary legal processes that are designed not in their favor. And the China connection is critically important for Korea.”
Especially if the two Koreas were to reunite. Metzl envisions a land bridge with high-speed rail and modern infrastructure connecting a unified Korea to China.
“The companies who are investing now in Korea, who are laying that foundation, will be uniquely positioned to take advantage of that inevitable future transformation,” he said.
As for Chinese investment into Korea, Liu Kai, Chief Representative of the Representative Office of the China Investment Promotion Agency of China’s Ministry of Commerce, said it is likely to increase considering China’s recent promotion of outbound investment. Liu named Korea’s FTA network coverage of 60 percent of the world’s intellectual property and the potential for investment growth in Korea’s real estate and cultural contents sectors as positive factors.
SUGGESTIONS FOR KOREA
As Korea experts who know firsthand how the country is viewed abroad, the Honorary Ambassadors had some recommendations.
Do better what we’re already doing well
Metzl: When you think about the dynamism of Korea, it all comes back to the incredible population you have. So while Korea has done extremely well in human resources, given the demographics and the low birthrate, Korea is going to need to bump up its human resources game by doing at least two things. One is empowering women - not just women’s participation in the workforce, but active women’s leadership at every level. Two is to continue becoming more of a multiethnic society.
Metzl again: Korea has made unbelievable progress in opening up itself culturally and economically. But openness isn’t just about signing free trade agreements. It’s also about building a culture of openness. It’s about making sure that people are learning languages. It’s about creating a regulatory environment that’s open to exchange.
Support SMEs and entrepreneurship
Warwick Morris, an Honorary Ambassador from the United Kingdom and a former British ambassador to Korea: I’d like to see more effort made to bring SMEs together Korean SMEs with European and other SMEs, to work in collaboration. Though the EU-Korea free trade agreement has been a great success, I saw some figures recently that suggested only about 62 percent of companies in Europe were aware of the FTA. So clearly there needs to be some more work by all of us by KOTRA and everybody to make people more aware of the advantages that FTA can bring to all companies, big and small, whether they’re trading or investing.
Makino Seiki, an Honorary Ambassador from Japan: You need collaboration between Korean companies and small but strong Japanese companies… Ask the Japanese about investing in Korea, and they’ll say, why invest in Korea? They already see Korea as an advanced country. So Korea should emphasize the convenience and ease of its business environment, and free trade.
Metzl: In this world, where it’s ideas that are competing and where Korea is so well-positioned to garner the creativity of its workforce, creating a culture of entrepreneurship and risk is absolutely essential.
Don’t be complacent
Morris: Although Korea has moved up to fifth position in terms of investment friendliness, investors can move very quickly. Investors, wherever they are, are looking at bureaucratic procedures, incentives, corrupt practices, at regulations being applied consistently and fairly. All countries have to pay big attention to those things. Korea, I think, pays a lot of attention to them, but no country can be complacent.
Make foreign companies feel at home
Morris: Foreign companies that come here, they commit themselves to Korea, spend a lot of money here, they employ Koreans, they see themselves very much as a part of Korea. They shouldn’t be seen so much as foreign, from outside, from another planet. So I think, try to encourage foreign companies to come here, to feel like they’re part of Korea.
“Convey the taste of the sea”
Listing three fields of investment interest in Korea, Tordjman cited French writer Antoine de Saint-Exupery to explain the importance of building the desire to invest in Korea. If you want to build a ship, Saint-Exupery’s adage goes, don’t tell people to gather wood and start delegating work. Instead, teach them to want to go to the sea.
Tordjman: You need to make us love Korea and present the varieties of richness of its diversity.
By Chang Young
Executive Consultant Invest Korea