Global Companies Like Korea but Are 'Unsure' About It as a Hub Location

Martial Arts 'Analysis of Key Factors for Global Companies' Asia Base Selection and Strategies for Attracting Them to Korea' Report

[Asia Economy Reporter Park Sun-mi] Although global companies have a positive perception of Korea, few consider Korea as their top priority for an Asian regional hub.

On the 25th, the Korea International Trade Association's International Trade and Commerce Research Institute announced in its report titled "Analysis of Factors Determining Asian Regional Hub Locations for Global Companies and Korea's Attraction Strategies" that a survey of 300 global companies with regional headquarters in Asia ranked Korea 5th as an Asian hub candidate, following Singapore, Japan, Hong Kong, and China. The consideration rates for Korea as an Asian hub were 3.3% for first choice, 10.0% for second choice, and 12.3% for third choice.

The proportion of companies considering Korea as their first choice was 3.3%, significantly lower than Singapore's 32.7%. In particular, Korea's corporate environment was found to be more competitive compared to its living environment, but relatively less known among companies. Korea's business environment competitiveness scored 3.88 out of 5 for corporate environment and 3.79 for living environment, while awareness of Korea's business environment scored 3.58 for corporate environment and 3.72 for living environment.

Recent changes in trade conditions surrounding China, supply chain restructuring, and the spread of COVID-19 have strengthened the motivation for global companies to relocate their Asian regional headquarters. The establishment of regional headquarters by global companies not only contributes to economic revitalization such as increased exports but also enhances the national image, making it a crucial time to actively pursue the attraction of global companies.

Global companies view that Korea needs to improve English communication skills, employment conditions, and tax systems to attract Asian regional headquarters in the future. The report argued that to expand the attraction of Asian headquarters for global companies, it is necessary to improve English communication skills and comprehensively reform systems related to corporate and living environments, including tax systems and labor market employment conditions.

In particular, it advised leveraging the main manufacturing production networks, attracting global startups, and fostering an industrial innovation environment through strengthened industry-academia-research cooperation. Additionally, it emphasized the need for organized national-level promotion of Korea’s business environment and human resources by utilizing soft power and enhancing the effectiveness of information provision.

Yang Ji-won, a researcher at the Korea International Trade Association, stated, “To attract global companies, it is necessary not only to provide strong incentives such as tax support but also to boldly improve business environments such as English communication capabilities and labor market conditions.” He added, “It is especially important to support institutional measures that encourage continuous investment from companies already operating in Korea, not just at the investment attraction stage.”

This content was produced with the assistance of AI translation services.