In an era where nations vie for supremacy in global economics, South Korea has emerged as a significant player with a powerful influence not only domestically but worldwide.
Its conglomerates, involved in sectors vital to national security and industrial strategy – including semiconductors, electric vehicle batteries, biotech, and telecoms – play a pivotal role not just within its borders but across the international stage. The US is actively courting South Korean chipmakers and battery manufacturers through generous subsidies, although with the stipulation that they loosen ties with their considerable Chinese market.
South Korea’s global champions and wider economy offer abundant lessons for global business leaders, highlighting strategies to attain and sustain competitiveness.
The power of the private sector
The East Asian nation’s economic competitiveness is underpinned by several crucial factors. Foremost among these is the remarkable strength of its private sector, renowned for its innovation. This sector encompasses a spectrum of enterprises, from industry giants like Hyundai and Samsung to a thriving ecosystem of small and medium-sized enterprises (SMEs), that collectively form the backbone of the nation’s economic fabric. This coexistence of corporate titans and SMEs contributes significantly to South Korea’s economic prowess.
The country’s digital competitiveness is also strong, a significant catalyst for economic transformation across businesses, government, and society at large. In IMD’s World Digital Competitiveness Ranking, South Korea is placed eighth globally, reflecting its favorable digital mindset and the access to capital. The private sector and citizens are extremely accepting of technology, fostering a vibrant digital culture.
The nation also boasts well-developed digital infrastructure and ranks highly in “future readiness”, or the level of preparedness to exploit digital transformation, coming second globally only to Denmark, according to the IMD World Digital Competitiveness Ranking.
Talent attraction and retention challenges
Nevertheless, there are areas where South Korea’s competitiveness is lagging global peers, most notably in the realm of talent attraction and retention, both domestically and internationally. While the nation enjoys a thriving digital business culture, it bears a conservative disposition rooted more in knowledge than practical experience.
Consequently, South Korea does not attract talent as readily, owing to a confluence of cultural, linguistic, and geographical barriers, resulting in talent emigration or an inability to attract foreign talent. This is reflected in the IMD World Talent Ranking, where South Korea stands at 38th overall among 63 countries, scoring lower still in attracting foreign highly skilled personnel (ranked 49th) and international experience of managers (ranked 59th).