Entrepreneurship in South Korea
Much Korean success is due to entrepreneurs. Many entrepreneurs in different fields became world-class big conglomerates such as Samsung, Hyundai, and LG. These three major conglomerates compose more than 30% of the nation’s GDP. Korea ranks as one of the highest levels with a TEA rating of 14.5, but there are still many barriers to entrepreneurship. For example, there is a very high setup cost of at least $1,000 for administration fees (i.e. fees to form a corporation). A prevailing negative attitude towards entrepreneurs, attitude towards risk and failure, and bureaucracy are major issues concerning entrepreneurship in Korea. Considerable efforts are being made to reduce these barriers and nurture the entrepreneurial spirit. Organizations are streamlining bureaucracy, communication in exchanging and sharing information, and encouraging collaboration within organizations.
South Korea has the third largest foreign investment market among developing markets in the Asian region, after China and Hong Kong with 12,000 foreign firms in operation. The South Korean government plans to mold its market into the predominant business and financial hub of Northeast Asia, working to boost foreign investment from 9.7 currently to 20% by 2010. South Korea has shown some progress in the enforcement of its IPR regulations, boasting one of the highest per capita Internet and mobile telephony usage rates and committing to over $300 billion in infrastructure spending.
Korea is evolving into a more competitive, transparent, and user-friendly international business environment, driven by increased deregulation, local autonomy, entrepreneuristic activity, and foreign direct investment. The government is injecting over $90 billion in funds to recapitalize the banking systems after the late-1990’s financial crisis, predicated on the financial institutions’ commitment to international accounting standards and FLC’s as a provision against non-performing loans.
On the investment side, Korea has made remarkable strides. Aggregated limits on foreign investment in stocks (except for some state-owned firms) have been eliminated; restrictions on mergers and acquisitions are being lifted; financial services of a wide variety can now be undertaken by foreign firms; and a range of industry sectors once closed to foreign investment are slated to be opened in full or in part.
While there continues to be reports of anti-import sentiment in Korea, the Korean government has strongly urged their fellow citizens to look at foreign companies as allies in the rebuilding of the Korean economy. Korea has undertaken a commitment under the IMF program to overhaul its import certification and clearance procedures, as well as bring Korean standards into line with world-recognized standards. The Ministry of Commerce, Industry, and Energy is reviewing laws related to standards, health, safety, etc. in order to revise them to reduce barriers. Import clearance and certification problems are fundamental to the market access concerns of a broad range of foreign industries and entrepreneurs attempting to do business in Korea — autos, pharmaceuticals, cosmetics, motion pictures – to cite a few examples.
For videos on Korean entrepreneurship, click here.
Government Programmes in the Republic of Korea – Entrepreneurship
Welcome to U.S. Commercial Service Korea!
Country Commercial Guidelines
Korea Business Protocol
Korean Trade World
South Korea Business and Social Etiquette
Visa and Passport
South Korea: Rebellious Daughter
THE CHAEBOL OF SOUTH KOREA
Korea’s Regulatory Climate Stifling Entrepreneurship
Crisis of Entrepreneurship
Asian-American.net – What Else Would You Ever Need to Know?
Doing Business in Korea – Fordham’s Advice
Doing Business in Seoul
Doing Business In… South Korea
Doing Business In… South Korea – Page 2
Doing Business in Korea
Entrepreneurship Heritage of Korean
East Asian Government Promotion of Entrepreneurship
Global Entrepreneurship Levels Plummet
How to Think Like a Entrepreneur
Marketing US Products and Services
The Internationalist – South Korea: International Business, Trade & Investment
South Korea: Tech’s Test Market