Korea offers promising investment prospects across machinery, display technology, and cultural content industries. With exceptional human resources, advanced OLED technology, and robust cultural exports, Korea presents a dynamic landscape for investors. Backed by government support and incentives, it's an ideal destination for those seeking high-value ventures. Dive into Korea's thriving sectors for lucrative opportunities today.
1. Exceptional human resources: Korea leads globally in the number of researchers per 1,000 economically active individuals, boasting 16.6 researchers in 2020, surpassing even Sweden at 15.82.
2. Integrated upstream and downstream industries: Korea's manufacturing sector contributed significantly to its GDP, constituting 25.4% in 2020, marking it as the world's second-largest manufacturing hub and indicating a robust ecosystem for industrial development.
3. Government initiatives to nurture the machinery industry: Regional innovation clusters have been designated, and projects to cultivate materials, parts, and equipment industries are being actively promoted in four metropolitan areas: Gyeonggi (including Incheon, Ansan, Banwol, and Sihwa), Jeonbuk (including Gunsan and Gimje), Daegu, and Gyeongnam (including Changwon).
4. Free Trade Agreements (FTAs) worldwide: Korea has inked FTAs with 59 nations globally as of 2022, with negotiations underway with over 10 additional countries, providing a favorable trade environment for international business ventures.
A display panel serves as a visual interface, conveying various information to users and acting as a pivotal component within the industry's ecosystem. Since 2004, Korea has consistently held the foremost position in the global display industry, with a particularly noteworthy dominance in OLED technology, recognized as the future of displays, commanding an impressive 81.3% global market share as of 2022.
Driven by relentless research and development efforts, Korea stands at the forefront of OLED innovation, marked by groundbreaking achievements like the world's inaugural rollable TV and foldable OLED displays. Notably, Korea's OLED production capabilities outpace competitors by three to five years, with exclusive prowess in the fabrication of large-scale OLED panels, distinguishing it from others in the market.
In the 1990s, display panel manufacturing was predominantly concentrated among four Northeast Asian countries – Korea, China, Japan, and Taiwan – spurred by Japan's early investments in LCD technology. However, recent years have witnessed Korea and China emerging as dominant players in this arena.
China's ascent to market leadership began in 2021, propelled by substantial investments in LCD production. Meanwhile, Korea strategically shifted focus from LCDs to OLEDs, capitalizing on their increasing adoption across major consumer electronics such as smartphones, televisions, and IT devices. This calculated move has allowed Korea to expand its OLED production capabilities, ensuring its continued relevance and competitiveness in the global display market.
The Korean cultural content industry is demonstrating robust sales and exports, steadily evolving into a high-value sector. In 2021, the industry achieved sales of KRW 137.5 trillion (a 7.2% increase year-on-year) and exported USD 12.45 billion (a 4.4% increase year-on-year). With approximately 108,000 businesses operating within the sector (a 9.1% increase year-on-year), the industry has sustained average annual growth rates of 5.0% for sales, 10.0% for exports, and 0.7% for the number of businesses.
The industry's trade balance amounted to USD 11.25 billion, primarily led by the game category, which contributed to the industry's trade surplus with its high export value. Additionally, the cultural content category has underscored its status as a high-value sector, boasting a notable value-added rate of 38.6%.
The Korean government has unveiled four key national agendas aimed at fostering the cultural content industry. These initiatives seek to propel the shift towards a service-oriented economy, thereby catalyzing the creation of fresh growth avenues and expanding the global reach of K-content. Moreover, a range of detailed tasks has been proposed for implementation by relevant ministries. These tasks encompass bolstering support for companies and startups, along with providing policy financing aimed at positioning K-content as a transformative force in the export landscape.
Furthermore, various tax incentives have been introduced to invigorate the industry. Of particular significance is the provision enabling tax credits for production expenditures related to video content—a notable inclusion within the Tax Special Exception Limitation Act, primarily tailored for the manufacturing sector. This provision grants tax benefits for the production of television programs and cinema-released movies. Notably, original OTT content has been recently incorporated into the list of eligible recipients for tax credits, underscoring the government's commitment to fostering innovation and growth within the cultural content domain.
Korea beckons investors with promising prospects across machinery, display technology, and cultural content industries. With top-tier human resources, cutting-edge technology, and robust government support, it offers an ideal environment for high-value ventures. From leading in OLED technology to the flourishing cultural content sector, Korea's dynamic landscape presents lucrative opportunities. Now is the time to seize the potential of Korea's thriving sectors and embark on a journey towards success.
At Pearson & Partners Korea, our expertise lies in aiding companies to establish themselves in South Korea, ensuring a seamless entry into this vibrant market. Contact us to discover how we can assist in achieving your business objectives in South Korea.