Linking multinationals with jobseekers

By Jeffrey I. Kim

The world economy has been stuckfor several years, but is slowly recovering. Such a long period of globaleconomic downturn has caused many countries to suffer from high unemploymentand, even worse, steadily increasing youth unemployment.

Korea is no exception. Its overall unemployment rate rose from 3.1 percent in2013 to 3.4 percent in 2014. During this time, youth unemployment rose from 8percent to 9.0 percent.

To resolve the unemployment problem, it has been suggested that Korea shouldcontinue to promote long-term foreign direct investment. However, thissuggestion faces a formidable argument: Why would global investors come toSouth Korea when North Korea is threatening the South with nuclear weapons, andwith wages in the South continually increasing.

This argument may sound plausible, but practically, it is not true. NorthKorea's nuclear threat is disturbing for foreign investors in South Korea, butthe North has been provoking the South for more than 60 years. Foreigninvestors do not consider it a new risk. Therefore, North Korea's threats arenot critical in determining whether or not to invest in South Korea.

The argument of higher wages in South Korea is also weak. The South has beenreceiving FDI from countries that are industrially more developed.Consequently, the average wage of the investing country tends to be sufficientlyhigher than that of South Korea. Most foreign companies in South Korea useadvanced technology to make their parts and equipment. The companies areconstantly upgrading the technology through increased investment in researchand development.

We are in an era of globalization and ever-advancing industrial technology. Itis noteworthy that the mode of FDI will continue to evolve in many ways. Mostcountries, regardless whether they are developing or are already developed, aretrying to climb up the ladder of industrial technology.

It used to be that new and upgraded technology always travelled from a countryof higher income to a country of lower income. But today it is possible for alower-income country to surpass higher-income countries in certain manufacturingtechnologies.

A new mode of foreign direct investment is taking place internationally.Multinational corporations produce goods and services and supply them all overthe world. These goods and services have to go through many stages and channelsbefore they reach their final consumers. Stages include product-planning anddesign, manufacturing, packaging, door-to-door delivery, and storing.

This is what we call the global value chain. Any corporation that can supplyneeded goods and services can join the global value chain.

Under these circumstances, a vital task for foreign investors in Korea is tohire the most competent employees. They want young workers who are creative anddisciplined, but worldwide are having a hard time finding them.

Fortunately, finding such employees is one of the duties of the Ombudsman
Office in Korea. The office of the foreign investment ombudsman holds a jobfair every year to reduce the mismatch between foreign companies and jobseekers. In addition, ombudsman staff visits colleges and universities toarrange job seminars. At these seminars, students can hear directly from theCEOs of foreign companies.

Last October, the Ombudsman's Office hosted a successful jobs fair. Nearly 100companies, of which a quarter were on the Fortune Global 500 list,participated. About 18,000 visitors attended, with 241 young people findingsecure positions.

The 2015 Jobs Fair will be held on October 15-16 at COEX, with even morecompanies, job seekers and hiring expected.

The ombudsman's office pays special attention to students from provincialcolleges and universities because these young people have less access to thenewest jobs information.

Staff visits these schools three to four times before the jobs fair and conductevents such as the "On-Campus Recruiting Expo" in the schoolauditoriums, where students listen keenly to CEOs.

To help ease youth unemployment, the foreign investment ombudsman has rolled uphis sleeves to be the "visible hands" in the youth labor market.

Jeffrey I. Kim is the foreign investment ombudsman, a presidentiallyappointed troubleshooter for investors and entrepreneurs from overseas. He canbe reached through jeffikim@kotra.or.kr.

jeffikim@kotra.or.kr

Link : http://www.koreatimes.co.kr/www/news/nation/2015/08/197_185897.html