South Korea

Economy

With 51.8 million inhabitants, South Korea is among the most densely populated countries, where almost half of the total inhabitants of the country live in the capital Seoul. South Korea is known from transforming from one of the poorest countries in the world, to a developed, high-income country in just a few decades. Becoming the fourth largest in Asia, and the tenth largest economy in the world by purchasing power parity, the South Koreans hold a strong position in the world economy. South Korean’s economy is dominated by so-called ‘chaebols’ which are family-owned conglomerates, but also houses a lot of large multinational companies such as Samsung Electronics, Hyundai Motors and LG Electronics. Besides that, South Korea is characterized by a high level of international trade. Exports of goods and services account for approximately one-third of total GDP, with technologically advanced electronics manufacturing as the primary drivers.  

Promising Sectors

In the initial years after the division of Korea, agriculture contributed almost 50% of the nation’s GDP, but South Korea has been fast in shifting its base to the industrial sector. In 2020, services contributed around 57% to South Korea’s GDP, while 32.8% came from South Korea’s industry sector. Its service sector employed over 70% of the South Korean workforce in 2018. South Korea has the 4th largest economy in Asia and the 10th largest economy in the world. The country’s largest industries are electronics, automobiles, telecommunications, shipbuilding, chemicals, and steel. The country is among the largest manufacturer of electronic goods as well as semiconductors. Its automotive industry is highly developed and has a huge capacity for automobile production. Besides, South-Korea is the global leader in shipbuilding and offshore installations. Korean shipyards are looking for foreign technology for new maritime developments, such as cleaner and smart ships. Architecture is rapidly developed, re-developed (smart cities and mobility) and urbanized over the past century. Especially in the metropolis of Seoul and its surroundings. With increasing urbanization and rising labor costs, people have moved away from the agricultural sector. South Korea now imports feed grains, soybeans, wheat, and animal hides to operate its livestock, and export-oriented industries such as textiles and leather goods. Nevertheless, South Korea seeks for agricultural innovation and smart farming. Opportunities arise for export of foreign technology for companies in the South Korean food industry.  

Europe & South Korea

Since 2011 the EU and South Korea have a free trade agreement (FTA). From 2010 to 2018 export from the EU to South Korea have increased by 77%. Among other things, this FTA helped the export of EU agriculture products, footwear and textiles. Given their increasing income, Koreans are more interested in European food, fashion and furniture. For the EU, South Korea is the eight largest export destination where machinery and appliances, transport equipment and chemical products are the main exported goods. For South Korea, the EU is the third largest export destination, with the Netherlands as the second highest importer.  

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