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Home / General Information / Korea Business Success eZine / Korea Business
Success eZine – Sumer 2010
Korea Business Success eZine – Summer 2010
Welcome to the Summer 2010 issue of the Korea Business Success eZine of Korean Consulting & Translation Service, Inc. We hope you find this information helpful to your business in Korea and with Koreans everywhere. Table of Contents
Breaking News: Korea Business Central Topic – How to get a Job in Korea Korea Business Central, the premier networking site for everything related to Korea and specifically business in Korea, now has a special featured topic section to assist anyone thinking of relocating to Korea to get up to speed fast on the job market there. Included in the section is a special interview from our Korea Business Interview Series entitled "Korean Job Realities: Patterns of Success in Korea.” This 45 minute interview with Steven McKinney, the president of McKinney Consulting, a leading executive search firm in Seoul, will answer all of your questions about employment and recruiting in Korea. In addition, anyone seeking potential employment in Korea should check out some of the additional employment resources on our featured topic page:
[ top ] Samsung to Invest US$21 Billion in a Bid to Diversify Korea's Samsung Group, the world's biggest electronics maker, will invest US$21 billion in the renewable energy and healthcare sectors over the next decade in an effort to diversify away from its computer chip and mobile phone businesses. In fact, Samsung has identified five core businesses - biopharmaceuticals, light emitting diode (LED) technology, medical equipment, rechargeable batteries for hybrid cars and solar cells - as its future growth drivers and the conglomerate is expecting that these businesses will generate US$44 billion in annual sales by 2020 and create more than 45,000 jobs. The plans are also being seen as a way to directly challenge General Electric, Philips Electronics and Sanyo Electric over the long term. Korea Finance to Invest US$80 Billion in Growth Industries State-run Korea Finance Corp. will invest Won 100,000 billion (US$81.9 billion) in strategic growth industries by 2015. These investment plans are an effort to diversify Korea's economy away from traditional manufacturing industries such as chip making, shipbuilding and car production and into strategically important areas such as exports for the nuclear reactor and high-speed railway industries, developing social infrastructure and for securing overseas energy and other resources. Specifically, approximately Won 42,000 billion will be invested in “new growth drivers,” Won 26,000 billion in long-term strategic industries and Won 32,000 billion in small and mid-sized enterprises that have potential for growth. Korea Finance also expects its assets to increase from US$32 billion to US$120 billion by 2015 and it estimates that these new investments will help to create 250,000 jobs and induce output worth Won 159,000 billion by then. Korea Grabbing a Bigger Piece of the Middle East Infrastructure Market The Financial Times has recently noted that Korean groups are increasingly grabbing a bigger share of the infrastructure projects up for grabs in the Middle East. In fact, Korean companies last year won US$36 billion worth of infrastructure and construction projects or a quarter of all such contracts in the region. This compares to just US$2.3 billion won in 2003. In addition, Korea also clinched a US$20 billion deal to sell nuclear reactors to the United Arab Emirates (UAE). The Financial Times noted that the deals are important for Korea as the country attempts to showcase the ability of its companies to win foreign contracts through a willingness to work closely with local workers and to transfer knowledge to them. Moreover, the Financial Times noted that Korean companies are being boosted by the country’s two export credit agencies, the Korea Export-Import Bank and the Korea Export Insurance Corporation, which are all to happy to help fund projects in the lucrative Middle East region. Korea: One of the Most “Luxury Friendly” Places on Earth The Wall Street Journal has noted that a recent survey by McKinsey & Co. showed that Korea is emerging as one of the most "luxury friendly" places in the world due to rising wealth and a rising tide of shopping-minded tourists from China and Japan. In fact, the survey showed that only 5% of Koreans feel guilty about spending money on luxury-brand items or think that they are wasting their money on such items. Moreover, only 22% of Korean respondents said they think that showing off luxury goods is in bad taste - a considerably lower response rate compared with Japanese (45%) and Chinese respondents (38%). Korea's homogenous culture was cited as a factor for the attitudes of Koreans toward luxury items as the country’s homogeneity encourages people to set themselves apart with high-end products and also pressures them to keep up with those who do. In addition, the deep Korean tradition of craft-oriented trades, which has created respect for very fine products, was cited as another factor. 60th Anniversary of the Start of the Korean War June 25 marked the 60th anniversary of the North Korean invasion of South Korea and hence the start of the Korean War. The war would ultimately last about three years and end almost where it started – at the 38th Parallel. Korea Business Central’s discussion boards has a discussion entitled The Korean War - Impressions After Sixty Years which lists several books about the war that are well worth reading plus mentions two serials on Korean TV which dramatize the war from a Korean perspective. In addition, Chung Min Lee, the ambassador for international security affairs and dean of the Graduate School of International Studies at Yonsei University in Seoul, has written a wonderful tribute for the Wall Street Journal where he says, "gamsa-hamnida, jinshimeuro gamsa-hamnida," or “thank you, thank you very much,” to all of the soldiers, doctors and nurses who served in the Korean War so that South Koreans like him could have the freedom and prosperity that they enjoy today. [ top ] Feature Article: US-Korea Free Trade Agreement Update As of this summer, the long-stalled and debated US-Korea Trade Promotion Agreement, which was initially negotiated by the Bush Administration and would be the USA’s biggest trade pact since NAFTA, appears to be back on the agenda for both Korea and the USA. There are two obvious and practical reasons for this:
Until these events, the free trade agreement had languished due to complaints from US beef and automobile producers that they are excluded from the Korean market plus a general level of suspicion among congressional Democrats of trade deals – especially those negotiated by the previous administration. Moreover and up until now, the current US administration has largely avoided the issue of negotiating, approving or taking a clear stance on additional free trade deals. This changed as the recent Group of 20 summit in Toronto when President Obama announced that he wants to settle a few outstanding issues with Korea in time for the next summit there in November. The free trade agreement would then be submitted to Congress after the November mid-term elections when there will be less political pressure. However, US officials have not stated how they would resolve any outstanding issues without reopening the pact while renegotiation would likily be strongly opposed in Korea and could also jeopardise the Obama administration’s ability to push the trade deal through Congress using so-called "trade promotion authority." Meanwhile and from Seoul's point of view, the pact is already signed and sealed. President Lee has also stood up to trade unions and opposition parties in order to get his parliament to pass the free trade deal. Moreover and after taking a beating in local elections earlier this month, President Lee cannot afford to be seen making further trade concessions to the US. Nevertheless and as the current agreement stands, Korea has agreed to reduce tariff rates on 95% of all consumer and industrial products plus improve transparency and intellectual property (IP) rights protection and address standards and regulations while the US has agreed to open its markets further to both Korean agriculture and cars. In other words, the US-Korea free trade agreement is a win-win scenario for both Korea and the US.
[ top ] Like many immigrant societies, Brazil is a melting pot of diverse cultures and nationalities. And while Brazil and the city of Sao Paulo in particular are more known for having the largest Japanese community outside of Japan, many may not realize that both the country and the city are also home to the biggest population of Koreans in Latin America. Moreover, the economies of both Brazil and Korea share many synergies - leading to growing cooperation and trade between the two countries. Unlike the Japanese who began arriving to Brazil in significant numbers at the beginning of the 20th century, Koreans began immigrating to Brazil only in the 1950s and on a very small scale. However and in 1962, the Korean government passed the Overseas Emigration Law to encourage emigration in an effort to control population growth, lower unemployment and earn foreign exchange. In the same year, the Korean government sent 92 people (who were all members of seventeen families) to Brazil in an effort to direct more emigrants to the southern hemisphere and to take advantage of the opportunities presented by the size of Brazil’s economy. However, many future would-be Korean immigrants were hindered by the demand that all visas to Brazil be preapproved. These regulations along with the size of the Brazilian economy encouraged undocumented Korean immigration into Brazil – especially from neighboring countries like Paraguay. Today, the Korean Embassy estimates that there are at least 50,000 Koreans or so called “Coreano-brasileiro” in Brazil but the actual figures may be two or three times that. Moreover, 90% of Koreans in Brazil are based in Sao Paulo where they have created over 2,500 small businesses – most of which are in garments or garment related sectors. However, Korean investors and businessmen are increasingly active in other aspects of Brazil’s economy. In a 2008 meeting between President Lee Myung-bak and Brazilian President Luiz Inacio Lula da Silva, Lee highlighted three broad sectors for further Korean-Brazilian cooperation. These areas included:
Lee also noted that the combination of Brazil's abundant natural resources, including iron ore and uranium, along with Korea's competitiveness in plant industries such as electrical power, steel and petrochemicals, generates strong synergy between the two economies. Moreover, Brazilian participants in the talks between Lee and Lula urged Korean investors and businesses to participate in Brazil's planned 520-kilometer-long high-speed railway linking Rio de Janeiro, Sao Paulo and Campinas and in the plans to build eight nuclear power plants by 2030. [ top ] Culture: Education and Career Paths in Korea
One's career path in Korea is strongly linked to their education and for most Koreans, what high school and college one attends will determine their career. This means that parents strive to get their children into a prestigious high school and university. This recent Korea Herald (April 8, 2008) article provides some great insights about the link between education in Korea and success in the corporate boardroom: 62% of CEOs are graduates of top three universities The online job portal Saramin also said that 55.8 percent of the 231 CEOs had a bachelor's degree, 27.3 a master's degree, and 16.9 a doctorate. Among those with a bachelor's degree, 35.1 percent were from SNU, while 14.7 and 11.7 percent were from Korea and Yonsei, respectively. The next two schools were Hanyang and Sungkyunkwan. Almost 19 percent of the CEOs with a master's received their degrees from SNU. Those who got a degree from a foreign university accounted for 9.8 percent. Although over 94 percent of CEOs with a bachelor's degree earned their degree from a Korean university, about 43 percent of those who have a master's or doctorate went to graduate schools abroad. Nearly half of the CEOs majored in business, while other popular majors included economics, engineering and administrative studies. In addition and when you visit any major university campus in the USA, you will often see scores of Korean students (especially in California). In fact, educator John C. Weidman has written a detailed article about this phenomenon and in his article he pointed out: It may be surprising to many that, according to the Institute for International Education (IIE), only the two most populated countries in the world, India and China, sent more students to study in postsecondary programs in the United States during 2005-2006 (76,503 and 62,582, respectively) than South Korea (58,847)…. [But, one should note South Korea's population is only 48 million.] …Why do South Korean students leave their own highly economically and educationally advanced country? For one reason, as the South Korean economy has developed, more and more families can afford to send their children overseas to study. For another, the intense competition for advancement through education in South Korean society leads even families with limited means to send their children abroad in order to keep up with their more affluent neighbors. Why do parents think that studying abroad can provide their children with competitive power? Some say that learning English in order to find continuing employment in an increasingly globalized economy is a main reason. On July 2, 2007, the Washington Post ran a story suggesting that English is the "golden tongue" for South Koreans. According to the Korean Educational Development Institute (KEDI, 2006), around 60 percent of South Korean students studying oversea choose English speaking countries like the United States, Great Britain, Australia, Canada, and New Zealand…. ….Then what are the most pervasive reasons for South Korean students' high desire for studying overseas? It seems reasonable to assert that this is a continuing reflection of Korean educational aspirations, or "education fever," based on the strong cultural belief that education is the primary pathway for social mobility and a better future as well as individual success in an increasingly globalized society. A favorite South Korean slogan for successful globalization is "Only the first can survive," suggesting that the small segment of South Korean families sending their children to study abroad are doing so to improve their children's chances for career advancement in the global marketplace. More excerpts from the Weidman’s article are available on the Bridging Cultures Worldwide blog and these excerpts provide plenty of useful insights into Korean attitudes towards the role of education in society and in the lives of Koreans. [ top ] Etiquette: Transitioning Non-Korean Executives into Korean Firms
I have an Indian acquaintance and we often discuss Korea-based businesses with operations in India and he has worked with Korean teams in the past. He is also very open to learning about Korean business culture. My Indian friend responded to a May 27 [2008] Bridging Culture Worldwide Blog entry regarding LG, one of Korea’s most progressive corporations (In fact, they plan to replace at least one third of the Korean heads of its 84 overseas operations with locally hired employees over the next three to four years in an effort to become a “company with no nationality'') I think our exchanges are very insightful and will benefit global teams:
My response:
My astute Indian friend noted:
My thoughts: Where I am critical is that most Korean firms still do not provide in depth training and coaching for these new non-Korean executives. If they get some training, it's usually on localizations and not frank, detailed insights about Korean workplace culture or Korean culture in general. And as my Indian friend points out, much time is wasted while the new executive tries to figure things out. On the positive side, a few Korean global firms require all new management to get coaching and training. This provides their new employees with an advantage in a workplace that is so complex and different. However, it is also important to remember that who conducts the training and coaching matters. It takes someone who knows the challenges, issues, history, past successes, current trends and topics best not discussed. [ top ] Knowing a few basic phrases or words will go a long way in aiding one’s stay in Korea and help to build the personal relationships and rapport required for successful business and personal relationships in Korea. Below are some common terms for various types of ceremonies that an expatriate or a business traveler may encounter while living in or doing business in Korea:
Source: LifeinKorea [ top ] In April, Samsung Electronics reported a seven-fold increase in first-quarter operating profit to Won 4,405 billion on sales of Won 34,638 billion. (1) Samsung Electronics Co. has also announced plans to invest US$3.6 billion to expand the capacity of its semiconductor plant in Austin, Texas. This new investment will generate 500 new jobs while employment at the site is expected reach 1,500 by 2011. (2) After this latest expansion, Samsung will have invested more than US$9 billion in Austin. (3) Nearly 40% of all US-Korea trade is in advanced technology related products. (4) The Korea Export-Import Bank has found that 67% of engineering deals won by Korean groups to build plants last year were in the Middle East. (5) By the end of 2010, Korea's total population will reach more than 49 million and the supply rate of mobile handsets will reach 101%. (6) Despite tensions between North and South Korea, the Kaesong Industrial Complex is home to 121 companies (mostly South Korean) and employs 44,000 North Korean workers. These firms pump an estimated US$50 a month into the North Korean economy. (7) Angela Park, a professional golfer currently playing on the LPGA Tour, is a Korean-Brazilian whose family moved to Southern California when she was eight years old. She has both US and Brazilian citizenship. [ top ]
*“South Korea Country Report.” EIU. July 2010. [ top ] 1) "Samsung to invest $21bn as it seeks to diversify." Financial Times. May 12, 2010. 2) "Samsung to Invest $3.6 Billion in U.S. Plant." Wall Street Journal. June 10, 2010. 3) Ibid. 4) "The Seoul Stumbling Blocks on Trade." Wall Street Journal. June 29, 2010. 5) "South Koreans build big Mid-East presence." Financial Times. July 5, 2010. 6) "SK Telecom Looks to Break Out of 'Gloomy' Market." Wall Street Journal. July 6, 2010. 7) "Capitalist Enclave in North Korea Tries to Ride Out Political Storm." New York Times. July 7, 2010. |
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