The watchful eyes of King Sejong the Great look south, overseeing the fast-moving traffic in Sejong-daero Boulevard, which relentlessly weaves between the avenue’s towering offices in central Seoul. Positioned directly in front of the Gyeongbokgung royal palace, and flanked by the South Korean capital's Bukhansan and Gwanaksan mountains, the 10-metre statue of King Sejong sits perched atop an embellished bronze chair, looking over the bustling city with a perpetually serene smile.
Widely credited with having invented Hangul, the Korean alphabet, and renowned among South Koreans for having encouraged government officials to pioneer inventions such as the sundial and the celestial globe, King Sejong oversaw a historic period of technological advancement in the country in the 15th century. Thus his monument being located in one of Seoul’s main hubs of commerce appears fitting, given his early role in pushing South Korea to become a leader in technology.
Indeed Sejong-daero Boulevard, which hosts a range of home-grown South Korean companies including electronics conglomerate Samsung and multinational car manufacturer Hyundai can be seen as a microcosm of South Korea’s role as one of the world’s leading producers of cutting-edge technology and hardware in areas ranging from software and telecommunications to automotives and shipbuilding. Indeed, South Korea has become colloquially known as one of the region’s 'Asian Tigers', as its business conglomerates – 14 of which rank among the Fortune 500 list of leading global companies – have played a central role in propelling its industrialisation, and its subsequent development into a high-income country.
Located on the southern part of the Korean peninsula, South Korea shares a border with North Korea. Following a brokered ceasefire between the two countries in 1953, which ended the Korean War, South Korea’s economy expanded rapidly. Between 1960 and 1985, it experienced an average increase in per capita income of 6.8%, according to research from Columbia University.
Yet this rapid growth, which led to South Korea being admitted to the G-20 alliance of leading global economies, has decelerated since the 2008 global financial crisis. By the start of 2013, the country’s GDP growth had slowed to 2.3%, according to data from the Korea Trade-Investment Promotion Agency (Kotra). An over-reliance on its export industry, combined with a slump in global demand for these exports, has hit South Korea's economy particularly hard.
However, some market commentators believe the country's economy is showing signs of a resurgence. “South Korea’s prospects have been improving, especially when compared to last year, and we expect growth to reach 2% this year,” says Kim Eng Tan, the senior director and analytical manager of Asia-Pacific sovereign ratings at rating agency Standard & Poor's. “So far in 2013, we have seen export numbers strengthening and we also see construction activities recovering. We see an improving overall picture.”
K-Culture to the rescue
In an effort to offset its slowing exports, the South Korean government has worked to promote inward FDI into a range of sectors. Although the country’s tourism industry is relatively small, Ki-won Han, Kotra’s commissioner, maintains that the government, in conjunction with Kotra and the Korea Tourism Organisation (KTO), has engaged in a renewed push to attract visitors, as well as FDI, from hoteliers and tourist operators.
While South Korea’s tourism industry has historically been overshadowed by its larger neighbours such as China and Japan, the country's international image has received a boost in recent years through its music industry, known locally as 'K-Pop'. The global popularity of several K-Pop artists, such as the boy band Super Junior, has been instrumental in exporting South Korea’s image internationally. In addition, the success of the Gangnam Style hit song by Seoul-born singer Psy, which reached number one in more than 30 countries in 2012, enabled the country's government to capitalise on the appeal of its popular culture in its bid to boost the influx of international visitors.
The ‘Visit Korea’ campaign, which was active between 2010 and 2012, showcased South Korea’s culture and traditions to first-time visitors, and the government’s decision in May 2012 to allow foreign visitors transferring between flights at Incheon and Gimhae international airports to enter South Korea for 72 hours without visas significantly helped the country to increase its number of new visitors.
For its efforts, the government has begun reaping the rewards. “Investment in Korea's tourism and leisure industry has, over the past three years, accounted for 15% of the country's total FDI,” says Mr Han. “Investment in tourism, leisure and regional development in 2012 reached $2.8bn, a 33.2% increase from 2011.”
KTO estimates that the tourism industry creates up to two times more higher added value than the manufacturing sector, and for every Won1bn ($932,000) in investment, roughly 16 jobs are created in tourism, as opposed to just eight new jobs in manufacturing. In 2012 the number of inbound tourists increased by 13.7% to 11.14 million people, and KTO estimates that tourism as a whole represents 7.6% of South Korea's GDP and 8% of total jobs.
Although Mr Han is frank in admitting that “the actual ratio of the tourism and leisure industry to total FDI is [relatively] lower” than other sectors, he is confident that this industry will remain a strong. “In the past three years, the growth rate of foreign tourists [entering] South Korea was 67%, whereas that of Singapore was 33%,” he says. “According to the World Economic Forum's travel and tourism competitiveness report for 2013, Korea ranked sixth out of 25 Asia-Pacific countries. It was also ranked as one of the best performers in 2012 by the World Travel and Tourism Council, and we boast competitive advantages in technology, transportation infrastructure, cultural content and tourism marketing. This is important going forward.”