Invest KOREA

KOTRA's new President and CEO, Kwon Pyung-oh, talks about his vision for the agency, the importance of innovation
and the advantages of the Korean market.

You have a wealth of experience and insight based on your previous posts at the Ministry of Trade, Industry and Energy and most recently as the Korean Ambassador to Saudi Arabia. Please share with us your thoughts on being appointed President and CEO of KOTRA.

It is a great honor to have been inaugurated as the 20th president and CEO of an organization that has played a vital role in giving traction to Korea’s economic growth. Meanwhile, I do consider it a tremendous responsibility to be taking on this role at a time of domestic and international turmoil surrounding Korean trade.

Over the past 30 years, you have been in several public offices in charge of tasks related to KOTRA. Now, as President and CEO of the agency, what is your vision for KOTRA?

In 2003, right after the end of the Iraq War, I was serving as the Director for the International Trade Promotion Division at the Ministry of Commerce, Industry & Energy. It was then I learned of the director general of KOTRA’s Baghdad office, who was working toward the establishment of new markets in the region wearing a bulletproof vest. I attribute the success KOTRA has had over the last 56 years in trade and investment promotion to people like him, “KOTRA-men,” who were unyielding in all sorts of hardships and pioneered new markets overseas.

However, 56 years after KOTRA’s establishment, internal and external criticisms have surfaced, claiming KOTRA has become a bit complacent and lost its sense of duty and drive to tackle challenges.

To take this criticism constructively and reclaim our position as a world-class, innovative trade and investment promotion agency that helps small and medium-sized enterprises (SMEs) enter overseas markets and create global jobs, building a “KOTRA-like KOTRA” is what I chose as the theme of the reform we need to undertake.

Following your inauguration, you have stressed the need for reform several times. What kind of reform does KOTRA need?

The management and innovation principles that I pledge to implement are as follows. First, regarding the core policy tasks, our agency’s missions are to: support SMEs entering overseas markets; create global jobs; diversify export goods and markets; and create new opportunities for overseas expansion. I would especially like to emphasize importance on the first two tasks of supporting SMEs entering overseas markets and creating employment opportunities abroad, as they are critical in creating a “KOTRA-like KOTRA.”

Undertaking such tasks calls for reform on all levels, including organizational operations, business management, organizational culture and personnel management.

In terms of organization and business, KOTRA will take a customer and field-oriented approach to operations, and make sure our trade and investment promotion programs are result-oriented and sustainable. Most importantly, we will recover our fervor to serve our main clients, SMEs, by taking it upon ourselves to resolve their needs.

As for organizational culture, we will build a culture of communication, openness and cooperation and dispose of all unnecessary tasks. Through communication with all of our customers, we will adjust our programs to fit their needs in a timely manner, and work closely with policymakers and supporting organizations to create an ecosystem of support for exporting SMEs.

In terms of personnel management, we will thoroughly manage our personnel focusing on competence and results, and work to increase the expertise of our employees to increase KOTRA’s competitiveness.

What do you think is the role KOTRA will have to play in Korea’s economy going forward?

KOTRA must become a reliable partner for SMEs looking to advance into overseas markets.

The percentage of SMEs that export their products is 10.9% in Germany, 5.2% in the U.S., but a mere 2.6% in Korea. As the representative agency in charge of supporting SMEs export their goods overseas for the past 56 years, we need to take full responsibility for Korea’s trade, reflect on if we have supported them in best ways we could, and if not, we must find ways to improve.

We have reached a limit in expanding trade through conglomerates and major products, and are seeing a significant decrease in the trickle-down effect. The best way to tackle the challenge of simultaneously expanding trade and creating jobs is to encourage innovative SMEs to get involved in the export market. To this end, KOTRA will create a support system and take on the central role of helping SMEs expand their exports.

Also, the biggest challenge faced by our country is job creation. KOTRA will use its trade and investment promotion resources and overseas networks to actively create global jobs. We will prioritize job creation in all of our operations by providing support to SMEs entering overseas markets, overseas employment and ventures, foreign investment promotion and reshoring companies.

How would you introduce the advantages of the Korean market to buyers and investors?

Korea has an excellent investment infrastructure including an attractive market, the third largest FTA network in the world and an outstanding pool of talent.

First, in terms of the market, Korea has some of the world’s most competitive key industries including construction, chemicals, electronics and automotive.

According to the 2017 World Economic Forum (WEF), Korea ranks second among 137 countries in macroeconomic environment. This means Korea is rated highly in terms of price, national savings rate, fiscal health and sovereign credit rating.

Also, even though Korea does not have a mega-sized market, it is on par with the most advanced nations of the world in terms of income level and consumer culture. Also, the Korean market serves as a test-bed for countries not only in Asia, but all around the world, with its insight and high buying power.

That’s not all. Korea has one of the top FTA networks. We currently have trade agreements with 52 countries that connect us to consumer markets covering three fourths of the world’s total GDP. Therefore, Korea is in a prime position to act as a production base for companies looking to enter the global market.

Lastly, Korea is known for its passion for education and high university entrance rates, which turn out an abundance of high-quality workers. Korea is rated number one for patents, second for R&D and value-added-product manufacturing and tops the list on Bloomberg’s Innovation Index for five consecutive years.

Against this backdrop, Korea’s exports increased 15.8% year-on-year to reach a record USD 573.9 billion in 2017. This is the highest number to date since the country’s trade records began in 1956. Now, Korea is the sixth largest exporter in the world. Also, even in the midst of tensions with China over THAAD, U.S. reshoring efforts and other international challenges, Korea attracted USD 22.9 billion in foreign direct investments (FDI) in 2017, the highest total to date and the third consecutive year where total FDI surpassed USD 20 billion.

You have also stressed the need for a paradigm shift in foreign investment, a critical factor in resolving both domestic and foreign investment imbalances as well as the globalization and development of the Korean economy. What are your thoughts on this?

In the past, Korea’s investment promotion was focused on the sum and quantity of foreign investment. Now, however, we have to focus on attracting high-quality foreign investment that will gear towards a healthy Korean economy.

Specifically, we have to attract FDI that will create jobs, lead domestic startups and SMEs toward globalization, fuel the development of new industries, and flow into non-metropolitan areas for the balanced development of the entire country.

I believe in order for us to attract FDI that will lead to the growth of our economy and create high-quality jobs, we must establish and revitalize an open platform for knowledge and technology sharing.

On that part, we have created the Invest Korea Market Place (IKMP), a platform to help attract foreign investment, support the globalization of domestic startups and SMEs, and aid them in entering the global value chain.

Also, in order to boost the development of non-metropolitan areas, we will implement region-specific investment promotion projects, especially to increase FDI for regional manufacturers.

Is there any goal in particular you would like to see through during your time as president and CEO?

Since its establishment in 1962, KOTRA has successfully carried out its mission throughout the changing times. Now, we will reawaken KOTRA’s inherent DNA for pioneering new markets and regain the trust of our customers as a top-notch trade and investment promotion agency. I ask the readers for guidance and encouragement during this time.

Do you have any last words for the readers of KOTRA Express?

‘I would like to close this interview with a saying by Genghis Khan, “If one person dreams a dream, it is but a dream, but if all the people in the world dream the same dream, then that dream becomes a reality.” We will dream of achieving USD 2 trillion in trade, being the fifth largest trading nation in the world, and becoming the top-class trade-investment promotion agency leading Korean SMEs into overseas markets and creating global jobs. I ask for your interest and support as we start our long journey toward this dream.

I look forward to KOTRA Express serving as the point of contact between Korean and foreign companies to continuously discover areas of cooperation.

By Grace Park (gracepark@kotra.or.kr)
English Editor / Invest Korea