#BusinessEducation #CountryDay South Korea: everything you n | Idea factory
#BusinessEducation #CountryDay
South Korea: everything you need to know about the market
In the 1960s, South Korea was one of the poorest countries in the region. However, today it’s a developed industrial giant — one of the Asian Tigers. Its economy is placed 15-th in the world for GDP. 68% citizens are engaged in the service sector, 20% occur in production, and 12% — agriculture. The Korean economy runs on such huge conglomerates as Samsung, LG, Hyundai, and Daewoo.
Economy benefits
According to the latest Bloomberg Global Index Innovation, South Korea has been ranked first for a number of key metrics. They include scientific research, labour productivity, the level of technology implementation, and activity in patenting.
The national priorities are digital technologies, biotechnologies, new building material, medicine, space technologies, robotics, etc.
Korean communication technologies are incredibly well-developed. In 2014, 80% of population had smartphones. Around 65% of users are connected to 4G nets and actively surf mobile apps.
In the last few years, Korea considerably succeeded on the software market. Complicated and multifunctional Korean software is monetized and sold well. Interestingly, 4 out of 10 existing unicorns in South Korea are engaged in developing games.
When Park Geun-hye had become the president of South Korea, he started to invest in the economy of a new type. It’s called ‘creative economy’. The aim was to enhance the current productive base and to open new areas for economic development. Only last year, private and governmental investments in tech startups amounted to $2,3 billion.
Drawbacks
The negative national peculiarity is the tradition of family heritage in terms of work. It means if a father works for Samsung, his son seeks to apply for the same company. Such a system directly contradicts the launched programs of encouraging entrepreneurship. That’s why now there are programs for helping graduates to start their own business.
There is an evident shortage in B2B and SaaS business. All the leading startups are related to consumer markets. Whereas, B2B sector lacks prospective companies.
The market of online games is steadily growing and it’s not overloaded yet. However, the problem is it’s almost closed for novice companies.
Tips
It’s pretty easy to establish a new business in Korea. The bureaucracy is minimal, the government actively supports the initiative in terms of small and middle entrepreneurship. Residents and non-residents have equal rights when it comes to business.
In South Korea there are not so many people who speak a foreign language well, particularly English. So, you may often need an interpreter. Though if you have long-term plans, it’s better to start learning Korean.
You should also get acquainted with the tax system. It’s quite flexible and democratic, there is benefit and schemes for subsiding startups. However, the tax rate grows according to the net profit. Mind the geography: taxes and state support depend on the region.
Potential
South Korea a prosperous space for investors: new products and technologies are created every day. The country is also the leader in the amount of patents. This means the level of technology penetration and applied science is very high.
On the other hand, it’s necessary to assess the promise of startups. For example, the market of mobile apps is extremely developed and might seem attractive. Though there are undoubted leaders, so the competition is too tight.
Korea is perfect for testing your online service. Thanks to the overall mobilization, the feedback is instant.
Though it’s a small country, if your product appeals to the market, you will gain millions of users in several days. Whereas, in others countries you can wait for the feedback forever.
Would you love to develop your own business in South Korea? Text in the comments
