South Korea Economy

High-tech industries in the 1990s and 2000s

In 1990, South Korean manufacturers planned a shift in future production plans toward high-
technology industries. In June 1989, panels of government officials, scholars, and business leaders
held planning sessions on the production of such goods as new materials, mechatronics—including
industrial robotics—bioengineering, microelectronics, fine chemistry, and aerospace. This shift in
emphasis, however, did not mean an immediate decline in heavy industries such as automobile and
ship production, which had dominated the economy in the 1980s.
South Korea relies upon exports to fuel the growth of its economy, with finished products such as
electronics, textiles, ships, automobiles, and steel being some of its most important exports.
Although the import market has liberalized in recent years, the agricultural market has
remained protectionist due to disparities in the price of domestic agricultural products such as rice
with the international market. As of 2005, the price of rice in South Korea was four times that of the
average price of rice on the international market, and it was believed that opening the agricultural
market would affect South Korean agricultural sector negatively. In late 2004, however, an
agreement was reached with the WTO in which South Korean rice imports will gradually increase
from 4% to 8% of consumption by 2014. In addition, up to 30% of imported rice will be made
available directly to consumers by 2010, where previously imported rice was only used for
processed foods. Following 2014, the South Korean rice market will be fully opened.
South Korea today is known as a Launchpad of a mature mobile market, where developers thrive in
a market where few technology constraints exist. There is a growing trend of inventions of new types
of media or apps, using the 4G and 5G internet infrastructure in South Korea. South Korea has
today the infrastructures to meet a density of population and culture that has the capability to create
strong local particularity.

Electronics
Electronics is one of South Korea's main industries. Samsung and LG are also major producers in
electronic devices such as televisions, smartphones, display, and computers.

Automobiles
The automobile industry was one of South Korea's major growth and export industries in the 1980s.
South Korea today has developed into one of the world's largest automobile producers. The Hyundai
Motor Group is South Korea's largest automaker in terms of revenue, production units and worldwide
presence.

Shipbuilding
South Korea became a leading producer of ships, including oil supertankers, and oil-drilling
platforms. The country's major shipbuilder was Hyundai Heavy Industries, Samsung Heavy
Industries

EXPORT ORIENTED

To promote development, a policy of export-oriented industrialization was applied, closing the entry
into the country of all kinds of foreign products, except raw materials. The strategy promoted
economic growth through labor-intensive manufactured exports, in which South Korea could develop
a competitive advantage. Government initiatives played an important role in this process. [42] Through
the model of export-led industrialization, the South Korean government incentivized corporations to
develop new technology and upgrade productive efficiency to compete the global market.

Challenges
The Korean conflict is an ongoing conflict based on the division of Korea between North
Korea (Democratic People's Republic of Korea) and South Korea (Republic of Korea), both of which
claim to be the sole legitimate government of all of Korea.

Aging Population

The population of Korea is ageing more rapidly than that of any other OECD country. This is expected to
place an unprecedented economic burden on the working-age population and create a challenge.
Such transformational demographic change has already caused individual segments of Korea’s working-
age population to shrink in absolute terms (Figure 1.2, Panel A). The absolute number of children and
adolescents in Korea (aged 0-14) reached a peak of 13.6 million in 1972 and has since declined to roughly
half of that number. The number of young working-age adults (aged 15-29) peaked in 1989 at
13.2 million and has since fallen to less than 10 million. The number of prime working-age adults (aged
30-49) has also reached a peak at 17.2 million in 2006 and is now declining. According to the latest
projections from the United Nations (UN-DESA), the older working-age population in Korea (aged 50-
64) is forecasted to peak in 2024 while the number of those aged 65 and above will continue to expand
until 2051.

ECONOMIC INEQUALITY

South Korea was the 5th most equal country in the world in 2019, however economic inequality is
growing. According to data from 2010, low-income earners (those earning 12 million won or less)
make up 37.8% of South Korea's labour force.[73] Conversely, the highest income earners (those
earning 100 million won or more) make up 1.4% of the labour force.