South Korea Essay ⋆ Business Essay Examples ⋆ EssayEmpire

South Korea, whose official name is the Republic of Korea (ROK), is economically the fourth-largest in Asia, following Japan, China, and India, and 13^th-largest in the world based on 2007 data. It is now an Asia-Pacificn Economic Cooperation (APEC) and Organisation for Economic Co-operation and Development (OECD) member, defined as a High Income Nation by the World Bank and an Advanced Economy by the International Monetary Fund (IMF) and CIA.

South Korea is located at the crossroads of northeast Asia. It lies between Japan to the east, the Russian Far East to the north, China to the west, and North Korea at the borders. Its total population is 48.5 million (2007) and it uses won (KRW) as a currency. Its capital and the largest city is Seoul (10.1 million population), the second-largest metropolitan city in the world. There are several other big cities in South Korea—Busan (3.5 million), Inchon (2.6 million), Daegu (2.5 million), Dajeon (1.5 million), Gwangju (1.4 million), and Ulsan (1.1 million).

The country’s total area is 38,462.49 sq. mi. (99,617.39 sq. km) but only 19 percent is arable because of the mountainous and rocky terrain. Its official language is Korean (written form: Hangeul) and it has four distinct seasons a year, representing a humid continental climate. In Seoul, the average January temperature range is 19 degrees F to 33 degrees F, and the average July temperature range is 71 degrees F to 83 degrees F. As of 2005 approximately 46.5 percent of the South Korean population expresses no religious preference. Of the religious people, 29.3 percent are Christian (8.3 percent Protestants and 10.9 percent Catholics), 22.8 percent are Buddhist, and the rest adhere to various new religious groups.

South Korea was established in 1948 after World War II. With the Cold War, the Korean War began in 1950 and was expanded through the involvement of the United States and the Soviet Union. South and North Korea were finally divided along the 38th parallel after the armistice signed on July 27, 1953. South Korea has since developed a successful democracy as well as a booming economy. Starting as one of the world’s poorest agrarian societies in the 1950s and 1960s, Korea developed rapidly, fueled by high savings and investment rates, and a strong emphasis on education. From 1962 to 2007, Korea’s gross domestic product (GDP) increased from US$2.3 billion to US$969.9 billion, with its per capita gross national income (GNI) soaring from $87 to about $20,045. Today, its success story is known as the “Miracle on the Han River,” a role model for many developing countries.

The direction of Korea’s industrial policy changed significantly every decade. From the 1960s, Korea started to promote exports by enacting relevant laws and regulations and establishing export-oriented development plans. The chemical industry was the center of the nation’s industrial policy in the 1970s and there was industrial restructuring in the 1980s, aiming at promoting small and medium-sized enterprises (SMEs). In the 1990s South Korea was known as one of the four Asian Tigers with Hong Kong, Singapore, and Taiwan because they were relatively poor during the 1960s, but maintained high growth rates and rapid industrialization between the early 1960s and 1990s. They were evaluated as successful with the help of educational reform and with a cheap, yet productive workforce.

However, in 1997, an accumulation of corrupt business practices and bad loans led to a series of bankruptcies and a massive devaluation of South Korea’s currency. In 1998 the Asian economic crisis bottomed out from South Korea. After the Asian financial crisis hit in 1997, Korea took on reforms to bring about a speedy recovery. Korean businesses took the initiative to increase transparency and meet global standards while policies to facilitate startups were put into place. The nation began rebounding in 1999. The country was able to continue its growth toward becoming a major economic power after a swift recovery. Since 2000, innovation has topped the national agenda. To bring about more innovation in industry, Korea has promoted business-friendly policies as well as policies enhancing cooperation between large companies and SMEs, continuing to focus on technology-intensive activities.

International Trade

Korea’s trade volume in 2007 amounted to US$728 billion, in contrast to US$230 million in the end of 1948. Korea’s export growth depended mostly on trade with advanced countries such as the United States, Japan, and the European Union (EU). With Korea gradually increasing its trade with developing countries, however, the reliance on trade with advanced countries has steadily declined. Korea has signed free trade agreements (FTAs) with 16 countries, including Chile, Singapore, the European Free Trade Association (EFTA), ASEAN, and the United States. Negotiations with the EU, Canada, and India were under way by the end of 2008.

Major import items include industrial raw materials such as crude oil and natural minerals, while major export items include semiconductors, automobiles, ships, consumer electronics, mobile telecommunication equipment, steel, and chemicals. Korea is the largest in shipbuilding, the third-largest in semiconductors, and the fourth-largest in digital electronics in the world. Korean textiles, steel, and petrochemicals are fifth in terms of volume, and automobiles are also fifth in the world. Korea’s shipbuilding sector has been the industry leader since 2005, accounting for 40 percent of the world’s total shipbuilding orders. With almost 11 percent of the global market share, Korea’s semiconductor sector is at the forefront of the industry, particularly in terms of flash memory and DRAM (Dynamic Random Access Memory). In 2006, Korea’s DRAM ranked first in the world, with a 49 percent market share and the flash memory chips took up 63 percent of global markets.

Infrastructure

South Korea has a very advanced and modern infrastructure and is a world leader in information technology such as electronics, semiconductors, LСD displays, computers, and mobile phones, led by Samsung and LG. It is the home of the world’s third-largest steel producer, POSCO, and one of the world’s top five automobile producers, headed by Hyundai and Kia.

South Korea is also the world’s most connected “information society” with one of the top rankings in each for internet use, internet penetration, broadband penetration, mobile phone ownership, 3G mobile telecoms, WiFi hotspots, and WiBro (Mobile WiMax) coverage. The South Korean government has pushed very hard for eGovernment initiatives to provide most government services online. South Korea has strong digital infrastructure to support robust e-commerce with a 73.5 percent broadband penetration rate in 2006. It also boasts a thriving local e-commerce economy, with almost 34 million South Koreans online out of 48.5 million. Moreover, the volume of online spending was about $414 billion in 2006. South Korea was the first country in the world to provide high-speed internet access for every primary, intermediate, and high school. The internet is seen as a major facilitator of shopping in South Korea.

Education

Like other highly developed countries, the service sector has grown to comprise about two-thirds of GDP in South Korea. At the same time, living standards and in particular the educational level in South Korea has risen exponentially. Based on data from the United Nations Human Development Report 2007/08, South Korea is rated “High” with a 0.921 on the Human Development Index (HDI), and ranked 26th out of 177 countries. The index indicates a high level of life expectancy (males 75.7 years, females 82.4 years in 2006), literacy (99.8 percent adult literacy rate), education, and standard of living. Education in South Korea is regarded as crucial to success and thus competition is fierce. South Koreans have invested in education as a means toward economic progress.

According to the 2005 annual publication of comparisons in education systems produced by the OECD, South Korea is in first place in terms of the proportion of younger people who have completed an upper-secondary education in the world, with 97 percent reaching this level. In terms of the proportion of population entering higher education, South Korea had a similar pattern in the younger group, which is third behind Canada and Japan in the world.

South Korea is also working toward a peaceful reunification with North Korea. After the Korean War, North Korea and South Korea signed an agreement in 1953 to pursue peace. In June 2000, as part of South Korean president Kim Dae-jung’s Sunshine Policy of engagement, a North-South summit took place in Pyongyang, the capital city of North Korea. On October 4, 2007, Roh Moo-Hyun and North Korean leader Kim Jongil signed an eight-point agreement on issues of permanent peace. Despite the Sunshine Policy and efforts at reconciliation, progress has been slow.

Bibliography:

Johngseok Bae and Сhris Rowley, “Macro and Micro Approaches in Human Resource Development: Context and Content in South Korea,” Journal of World Business (v.39/4, 2004);
David Hundt, Korea’s Developmental Alliance: State, Capital and the Politics of Rapid Development (Routledge, 2008);
Internet Statistics Information System, “Internet Users and Usages by Province,” isis.nida.or.kr (cited March 2009);
Yul Kwon, International Business in Korea: The Evolution of the Market in the Globalization Era (Edward Elgar, 2008);
Russell D. Lansbury, Chung-Sok Suh, and Seung-Ho Kwon, The Global Korean Motor Industry: The Hyundai Motor Company’s Global Strategy (Routledge, 2007);
Juan J. Palacios, Multinational Corporations and the Emerging Network Economy in Asia and the Pacific (Routledge, 2008);
Hun Joo Park, Diseased Dirigisme: The Political Sources of Financial Policy toward Small Business in Korea (University of Сalifornia, 2007);
Republic of Korea, “Еconomic Bulletin,” Dynamic Korea (v.30/7, 2008).

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