Monday, July 27, 2020

13 Industrial Growth Engines – Steppingstone to the 4th Industrial Revolution

Source: pixabay

The future of Korea is currently unclear with decreasing birth rate, education that stifles creativity, slow growth in core industry sectors, increasing youth unemployment and income disparity. For Korea to maintain and develop its global ranking economic status will require an innovative change. The current government acknowledged the situation and plans for an “Innovative Growth” which will change and develop the structure of Korea.

Achieving innovative growth requires new technology which can change industries as well as daily lives. Korea has become 10th largest economy (by GDP) worldwide with backbone industries such as Telecom, Display, Automobiles, Semiconductors, but the growth rates of these industries are declining and the need for new industries is emerging.  

To pursue innovative growth the MSIT (Ministry of Science and ICT) introduced the 13th Industrial engines which will shape the new economy in Korea. The 13 engines are divided into 4 sections.

Source: MSIT

For the 13 Industrial Growth Engines, the government is providing specific support to each sector and creating an environment which can lead to the new 4th industrial revolution. The plan is to encourage technology development by tax reductions/benefits and to create an ecosystem with regulations that do not stifle development but aid the process. Financially the government invested KRW 1.3 trillion in 2018 and has planned a total of KRW 9 trillion until 2022. Another accomplishment the government is preparing for the future is targeting and supporting each industry related education which would also solve unemployment issues.

As the Korean government is developing technology in these new sectors it would be interesting to understand the current environment in these sectors. We will address each of the 13 Industry Growth Engines by sector in upcoming posts. 

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Monday, July 20, 2020

How Endemic Coronavirus Change Daily Lives of Koreans?

It has been 6 months since the first coronavirus was found in Korea in January 2020. Koreans have been doing a great job to manage the virus spread. However, coronavirus seem to remain here with us longer than we expected. Now, people are adapting to life with this virus.


Wearing personal protection gear

In Korea, wearing a face mask is nothing to do with your political opinion. It is just a matter of public health. Koreans understand that a face mask is the most effective and simplest way to protect yourself and others from the vicious virus. You can find everyone wearing mask in public space. Particularly, you should wear face mask in closed spaces such as elevators and public transportation.


At the same time, more and more people are using plastic gloves to protect their hands from the virus. on public transport and in elevators. They do not want to risk exposure to the virus by touching buttons with their bare fingers. Many people push the buttons and the public is concerned that they might be contaminated with the virus. Washing hands has become the new protocol in the daily lives of Koreans. Hand sanitizers are available in all public places such as the bus, subway stations and elevators.



Koreans have great passion for children’s education. Koreans have never been satisfied with the public education system and spend a lot of money for private education for their children. The market size of the private education sector in Korea is around USD 20 Billion or 1.3% of GDP.

The private education industry is trying to find ways to survive in the non-contact era caused by the virus. It is easy to find educational institutions providing tutoring services through video conference systems. Supaja ( is a one-on-one math tutoring service provider for K-12 students. Online tutoring services are not very popular in Korea yet. However, these service providers are gaining positive feedback from users. Students can get assistance from tutors without worrying about coronavirus infection.

 Violinist Yeseul is giving a lesson to a student in the US

Source: Yeseul Voilin (


Online tutoring has also been spreading quickly in the adult private education market after the coronavirus pandemic outbreak. Many musical instrument lessons are delivered online. It is different from online classes on Youtube. Teachers give real-time one-on-one lessons for students who want to practice musical instruments such as violin and piano. The students need a couple of webcams, a microphone and a computer or smartphone. The feedback from the students on this type of tutoring is relatively positive. Online lessons are not as effective as face to face ones, but they work a lot better than they expected. Better devices and systems for supporting this market are likely to be available soon.


Many Koreans are shifting from using fitness centers to home training. They want to keep exercising but fitness centers are not safe place in the coronavirus era. They are using home trainers’ clips on Youtube and some customers receive real time lessons from weight trainers. The real-time trainer provides weight training skills and discipline to exercise consistently. Home training and online trainers are good alternatives to visiting the gym.



Video conferences have become the new norm among businesspeople. Many government officials ask not to visit them physically and do online meetings instead. Many conglomerates are implementing online meetings instead of face to face ones. Many other small and medium size businesses tend to follow the business practices of larger companies and government offices. As the coronavirus has remained with us longer than we expected, emergency measures are becoming the new normal.


Korea has a small and open economy. Many global companies have offices and production facilities in Korea. As the coronavirus spread, it became difficult for head office managers to visit Korea physically. Some of them are seeking more effective ways to manage local organization in Korea. One good solution is hiring a local, third-party manager. The third-party manager should have good communication capability with local people and head office as well. The manager should have managerial capability to deal with local staff.  



According to Nielson Korea, Korean consumers are buying more online than before the coronavirus spread. 38% of Korean consumers pick online sites as their main shopping channel while only 29% of them chose online channels before coronavirus.



Source: Nielsen Korea


92% of Korean consumers are utilizing online and offline shopping channels. 7% of consumers use only online channels while only 1% of consumers use only offline channels. According to the survey, more than 70% of consumers expressed satisfaction with online shopping and 59% are satisfied with offline shopping.


Koreans have spent more money than before to buy hand sanitizers (305%), packaged Kimchi (24%), ready to eat porridge (16%) and retort food (14%). In the cleaning items category, all-purpose cleaner (18%) and kitchen towels (13%) are the products that have grown the most since the coronavirus emerged. The choice of items seems to demonstrate that people stay home longer and focus more on home sanitization.



Domestic tours

According to a survey from a local tour company, Koreans plan 5 days or visiting domestic destinations this summer. Jeju island is the most popular tourist destination for summer holidays this year, followed by Gyeongju and Gangneung.


The most important factor when choosing accommodation is cleanness. Hotels and resorts are the most popular accommodation types for Koreans vacationers this summer.   


Movie theaters

In May 2020, only 1.5 million people went to a movie theater in Korea, a 91.6% decrease year on year. On other side, Netflix’s revenue in April 2020 increased 2.4 times comparison to April 2019. In the first quarter of 2020, overall payment for internet services  increased 22% yoy.