Foreign companies in South Korea see protectionism and labor issues as greater risks than North Korean threats in doing business here, a survey showed Tuesday.
Analysts said the poll results indicated that foreign firms, like most of the Korean public, now considered North Korea’s repeated threats as a fact of life in South Korea.
The survey was conducted by The Korea Herald from July 1 to Aug. 11 to mark the paper’s 60th anniversary. A total of 103 CEOs and executives at multinational companies responded to the poll by email.
Asked about the biggest risk to business operations in the Korean market, the largest group of respondents, 36 percent, pointed to protectionist sentiment.
Labor issues (19 percent), the language barrier (18 percent) and an unstable political environment (13 percent) also ranked high among risk factors, the survey found. Only 8 percent of respondents picked North Korean threats as their biggest concern.
On the business impact from North Korean threats alone, 45 percent agreed that the risks attached to the North affected business operations significantly, while 36 percent dismissed there being any impact.
Almost half of the foreign firms’ executives, or 45 percent, cited growth potential as the most attractive aspect of the Korean market, while 22 percent favored the dynamic culture and people here.
Governmental support and human capital gained less support from the respondents.
They agreed that the shrinking population was becoming increasingly problematic for the Korean economy and that the technology gap between Korea and other emerging markets in Asia, such as China and India, had narrowed on many fronts.
But 67 percent of people disagreed that Korea’s growth potential was on the wane, with 60 percent saying Korea would need to find new niche markets.
The survey found that 63 percent were familiar with the Park Geun-hye government’s “creative economy” and “economic democratization” policies.
Fifty-eight percent said vitalizing small and medium-sized companies should be the main point of the policies, while 8 percent said the purpose should be keeping big companies in check.
About 81 percent of foreign firm executives expressed support for President Park’s economic democratization policy while only 9 percent were negative toward the policy.
The foreign companies also felt positive toward Korea’s free trade agreements with the United States and the European Union. About 76 percent agreed that Korea’s FTAs with the two major economies had been very helpful for business.
Men made up 83 percent of the respondents to the survey. The proportion of women, at 17 percent, was relatively high considering the average for female executives at Korea-based companies is estimated at less than 2 percent.
Seventy percent of the executives were in their 30s or 40s. More than half the participants, or 55 percent, had been in Korea for more than three years.
A majority, 66 percent, came from the Asia-Pacific region, followed by Europeans at 21 percent and North Americans at 11 percent.
By Lee Ji-yoon (email@example.com