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Development enters the next phase

Aug 25, 2018
Credit : GMI Post

With its transition from traditional to more advanced industries, South Korea wants to maintain its status as a leader in several industries - namely fintech, biotechnology and electronics. Industry associations, together with the government, are increasing support to SMEs in these sectors by providing them with assistance on research, funding and partnerships.

KOFIA Chairman Kwon Yong-won

With 65 years of experience, the Korea Financial Investment Association can attest to the growth of finance and increasing role of IT in the industry. KOFIA Chairman Kwon Yong-won is optimistic about the further integration of the two.

“The Korean financial investment industry is tech- friendly because of our strong IT infrastructure. The introduction of non-face-to-face identity verification, robo-advisor services and block chain-based authentication system (Chain ID) are major examples of advanced technologies that have allowed us to effectively respond to the Fourth Industrial Revolution,” Kwon said.

Meanwhile, Korea BIO, which was launched in 2008 through the integration of the bio, venture capital, and genetic engineering associations, is helping in the development of 300 Korean bio companies. In particular, it is working with the Ministry of Industry to run a long-term program for the creation of bio-industry eco-systems. In 2016, together they raised a $34.1 million fund to support Korea’s initial bio-ventures. In addition, they regularly hold training and investment seminars for early venture companies.

The Korea Electronics Association is another organization at the forefront of innovation. KEA seeks investments for new technologies in electronics and works closely with universities to drive research in areas, such as AI and IOT.

“Conversations are getting important in terms of AI and IOT. With that, we are working closely with Korea’s top players, such as Samsung and LG, as well as with SMEs and even vehicle and telecommunication companies to develop technologies for our industry,” KEA Vice Chairman Nam In-seok says.

For its part, the Korea Display Industry Association is working with MOTIE on a large R&D project to develop the display industry’s future technology, particularly for the benefit of SMEs developing and testing needs. 

“Tech development and advancement is crucial for the economy’s survival and growth,” KDIA   Vice Chairman Seo Kwang-hyun stresses.

“While home-grown giants such as Samsung and LG will continue to lead the global industry, we are here to make sure that a thriving Korea includes its smaller players,” Seo adds.

Hanchang: early adapter, big winner

Aug 25, 2018
Credit : GMI Post

South Korea’s reputation as a leading global power has rested primarily on its chaebols, or large industrial conglomerates, and its high-tech giants. However, its SMEs are emerging from the shadows and contributing more to Asia’s fourth-largest economy.

Hanchang, based in Busan, has been able to adjust quickly to changes in the market, both at home and abroad. Today, the holding company is staking its future on finding new growth opportunities in the market.

Expanding beyond its original activity, Hanchang has ventured into three new businesses: property development, hotel management and aquatic products.

While growing on the back of its gaseous fire extinguisher system manufacturing, in the last three years Hanchang has restructured and created three new segments: construction in 2015, seafood in 2016, and just last year, entertainment. The move involves some risk but also promises huge returns.

“We import live seafood from our company in Vladivostok, Russia. In Korea, there is a frenzy over the entertainment business. These businesses are risky but have great potential. If we successfully carry out our investment plan, Hanchang will grow even faster,” said CEO Choi Seung-hwan.

Hanchang is now formulating a future business strategy for North Korea. Last August, it launched a cruise ferry line business with routes plying the East Sea, stopping at Russian and Japanese ports. The first such company with cruise level ships, Hanchang looks forward to dropping anchor at a North Korean port in the near future.

“The current positive atmosphere between North and South Korea is still building and economic relations are expected to be restored. If we could finally open a port in North Korea with our cruise ferry line, we won’t just send passengers but also drop cargo. We are opening a new chapter with economic cooperation between the two Koreas. It will also help North Korea return to the international trade market. We are highly anticipating taking a crucial role in the process,” he explained.

Amid Hanchang’s rapid expansion, Choi is also seeking partners: “Being listed on the Korea Stock Exchange for over 40 years, we are continually looking for investors. As sales grow fast, we need capital to finance our expansion.”

Through expanding its territory into new business fields, Hanchang has been doubling their revenue. It may not take that long before the company joins the billion-dollar club.

South Korea 2018 was prepared for and originally printed in Foreign Affairs magazine.

PDF of the printed report

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