[2022 Korea Times Forum] Yoon urged to enable Korea to fulfill potential as global business hub
Yoon urged to enable
Korea to fulfill potential as global business hub Business experts
view Korea-unique standards as obstacles to hub plan
By Park Jae-hyuk,
The Korea Times - President Yoon
Suk-yeol should accelerate efforts to abolish regulations conflicting with
international standards, in order to prevent Korea from repeating failures in
its decades-long drive to become a global business hub, according to business
leaders from the U.S. and Europe as well as renowned Korean experts
participating in the 2022 Korea Times Forum, Tuesday.
The panelists
expressed optimism overall about the possibility of Asia's fourth-largest
economy becoming an attractive destination for multinational companies, thanks
to the new government's deregulatory stance. But at the same
time, they pointed out that the country still has many things to do to realize
its potential as a business hub.
“Our board of
governors wrote a letter to President-elect Yoon when he became the president,
and gave him our strong confirmation that we want to help make Korea a regional
hub,” American Chamber of Commerce in Korea (AMCHAM) Chairman James Kim said.
“But we did ask him to do a few things ― one is taxation both at corporate and
individual level, Korea-unique standards and some CEO risk that happens.”
European Chamber of
Commerce in Korea (ECCK) Chairperson Dirk Lukat mentioned international
standards, labor reform and transparency in regulations as the three key areas
pointed out by European businesses active in Korea. “With international
standards accepted and applied in Korea, administrative processes will be
simplified allowing new products to reach markets timely, reducing the cost and
making it more attractive for foreign companies to invest in Korea,” he said.
“Lately, during the COVID-19 pandemic, we saw some areas where foreigners were
discriminated particularly, if you look at the acceptance of overseas
inoculations.”
Korea Chamber of
Commerce and Industry (KCCI) Executive Vice Chairman Woo Tae-hee agreed that
strict regulations, high corporate taxes and labor market rigidity have acted
as obstacles to foreign companies doing business here, making it especially
difficult for Korea to achieve its goal of becoming a global financial hub. From that
standpoint, he was skeptical about newly elected Incheon Mayor Yoo Jeong-bok's
strategy to make the city a financial hub of East Asia by attracting companies,
banks and financial institutions that are leaving Hong Kong due to security
issues. “To attract money
from Hong Kong or elsewhere, you need to have a free flow of information and
capital. To do this, he needs to establish a transparent and free financial
market that is not regulated by the government,” Woo said. “I don't have
confidence that Incheon has a better chance than Hong Kong.”
Korean Academic
Society of Business Administration President Han Sang-man, who is also a
professor of Sungkyunkwan University Business School, called for increased
labor market flexibility in order for Korea to become a global business hub. “We should consider
testing a flexible labor system by applying it to innovative industries or
foreign companies for a short period of time, so that we can analyze how the
system affects the entire job market,” he said.
Right moment to
achieve goal
The panelists
expected Korea to be able to become a global business hub, once the country
solves the problems they mentioned.
“The future is
already here,” Kim said. “We have seven members on the AMCHAM board of
governors who are running Asia right here from Korea.” The lobby group for
American businesses here has made continuous efforts over the past few years to
relocate regional headquarters of U.S. firms to Korea from other business hubs
in Asia, such as Singapore and Hong Kong. Those efforts were based on its
confidence in Korea's business prospects and its belief that Korea is already
well-positioned to emerge as a regional business headquarters, according to the
AMCHAM chairman.
A recent survey of
the organization's members also showed that Korea was selected as the
second-most-preferred destination for regional business headquarters in Asia
after Singapore, confirming once again Korea's attractiveness as an investment
destination for multinational companies. Citing the recent
relocation of The New York Times' Asian digital hub to Korea from Hong Kong,
the AMCHAM chairman noted that the head of the U.S. media company's Seoul
office was also satisfied with Korea's digital infrastructure, human resources
and people fluent in English.
“Now is the time
[for Korea] to compete aggressively with other countries,” he said. Lukat said that the
ECCK is keen to support Yoon on his declared target of deregulation. As the CEO of
Schenker Korea, the local subsidiary of German logistics firm DB Schenker, he
advised the Yoon administration to take advantage of the strengths of Incheon
International Airport and Busan Port as distribution hubs for overseas
companies.
“Both the Incheon
International Airport and the Busan Port are part of free economic zones,
adding to the attractiveness of the state-of-the-art infrastructure,” he said.
“I hope the Incheon government will not concentrate only on banking or finance,
but also to increase this hub.”
Woo saw that
Schenker Korea's construction of distribution centers here shows Korea's
attractiveness as a regional hub as well as a global logistics hub. Although he was
skeptical of efforts to foster a financial hub in Korea, the KCCI executive
vice chairman was confident about Korea becoming an R&D hub. The World
Health Organization's designation of Korea earlier this year as a global
biomanufacturing training hub supported his claim. “The best attractive
factor for Korea nowadays is the global value chain, because our firms are
doing very well and making progress,” he said.
Han agreed with
other panelists on Korea's potential to become a global business hub. However,
the professor emphasized the necessity of shifting paradigms, saying that a
“platform” has been more important than a “hub” in this era of digital
transformation. “Korea has leading
businesses, such as Samsung, LG, Hyundai Motor, SK and POSCO,” he said. “For
Korea to play its role as a platform in Asia, the government should establish
strategies to foster upstream and downstream industries.”
Source: www.koreatimes.co.kr/www/common/printpreviews.asp?categoryCode=419&newsIdx=331397
2022.06.21