Economic Overview & Business Opportunities
Located in East Asia, South Korea is the southern half of the Korean Peninsula bounded by the Sea of Japan in the east, the Yellow Sea in the west and the Korea Strait in the south. Formally known as the Republic of South Korea, it is home to around 50 million people that make it possess the highest income in Asia in the year 2016.
Nestled between Japan and China, South Korea is the 12th developed country in the world due to its huge population and proximity to Japan and China. In fact, its vibrant and resilient economy has earned the country a rank among the so-called Asian tigers. As a sophisticated hi-tech economy, South Korea is undoubtedly a world leader in electronics manufacturing where Samsung, the world’s largest electronics company that is originated in South Korea, contributes to most of the GDP in the country. Moreover, South Korea is one of the leaders in electronics, shipbuilding, steel and automotive.
When talked about sustained growth and development of a country, South Korea is one of the most highly regarded countries in the world where the South Korean economy accounts for 2% of world GDP. South Korea’s scores on a range of competitiveness indicators is the strength of the country’s economy. The growing percentage of national income given over to research and development (R&D) and exports come from hi-technology products. In fact, South Korea has outpaced many countries like Taiwan in sectors like manufacturing of high value-added products. Major global conglomerates including Samsung, Hyundai, LG, and Kia Motors have boosted the economy in the country.
The strengths of the South Korean economy include:
- Leading role in electronics, shipbuilding, steel and automotive
- Highly skilled workforce: more than 50% of Korean have postgraduate degrees and around 7% of GDP spent on education.
- Broadband penetration: South Korea has the highest level of broadband penetration in the world, with speeds of 100 megabytes
- High level of disposable household income
South Korea ranked fourth out of 189 countries in the World Bank’s Ease of Doing Business rankings for 2016. South Korea scored exceptionally high on getting electricity (1st), enforcing contracts (2nd), and resolving insolvency (4th). The rapid growth has prompted many foreign investors to venture into the country. Global top players continue to show interest to invest in South Korea and they are taking a strong interest in the South Korean start-up ecosystem. The first Asian-based start-up campus of Google in Seoul has further cemented Korea’s emerging position as a hub of tech entrepreneurship.
On a final note, South Korea is poised for start-up growth with a rising number of high valuations and profitable exits in the horizon. The government-backed business environment, advanced technology infrastructure, and growing international attention are equipping South Korea with the opportunities to sustain economic growth in the years to come. South Korea is definitely one of the most preferred investment hotspots in East Asia if you are planning to expand and tap into the foreign market.
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