Korea

14
Country starter pack
Introduction to Korea
output and 90 per cent of the employment in the services
sector. Manufacturing-led development has siphoned
capital, talent and other resources away from services. By
2012, services sector productivity was only 45 per cent
of that in manufacturing, far below the OECD average
of 86 per cent. The SME population is dominated by very
small enterprises, and many business owners have limited
entrepreneurial aspirations; only 0.07 per cent of SMEs
grow to become large companies. This reflects both a lack
of entrepreneurial culture and the significant challenges that
small companies face in Korea. In particular, the high degree
of trading between companies within the same chaebol limits
the available market for many SMEs. Low productivity in the
services sector also reflects its small (nine per cent in 2011)
and declining share in business R&D, putting it well below
the OECD average of 38 per cent.
The services sector has been targeted by the Korean
Government as an engine of future economic growth.
As part of a “Three-Year Plan for Economic Innovation”
unveiled by President Park in 2014, the Government
identified healthcare, education, finance, tourism and
software as key services sector industries.
Legal system
The Korean legal system effectively dates from the
introduction of the Constitution of the Republic of Korea
and the organisation of Korea as an independent state.
Since then, the Constitution has been revised or rewritten
several times, most recently in 1987 at the beginning of
the Sixth Republic.
The Court Organisation Act, which became law on
26 September 1949, officially created a three-tiered,
independent judicial system, comprising the Supreme
Court, the Constitutional Court, six High Courts,
13 District Courts and several courts of specialised
jurisdiction, such as the Family Court and Administrative
Court. In addition, branches of District Courts may be
established, as well as Municipal Courts. Korean courts
are organised and empowered in chapters V and VI of the
Constitution.
There is no jury system in Korea, although since 2008 a
limited system has been adopted for criminal cases and
environmental cases. But all questions of law and fact are
decided by judges. The revised 1987 Constitution officially
codified judicial independence.
Infrastructure
One of the biggest advantages of doing business with
Korea is its advanced transport infrastructure. The World
Economic Forum Global Competitiveness Report 2014-
15 ranked Korea’s overall infrastructure 14th in the world.
All major Korean cities are connected by expressways and
the super high-speed rail system, Korea Train eXpress
(KTX). Seoul has a dependable and effective mass transit
system of subways, and taxis are plentiful. Korea also has
world-class logistics hubs. Incheon International Airport
Korea’s infrastructure
ratings
2014 World Economic Forum's transport
rank out of 144 countries, 1 being the most
developed system:
ROAD
PORT
18 TH 27 th
AIR
31 st RAIL
10 TH
is equipped with state-of-the-art facilities and provides
advanced traffic networks for its customers. The airport
has seen a continuous increase in the volume of cargo
since opening in March 2001, and is now the world’s
second largest in terms of international air cargo volume,
handling 2.7 million tons in 2010.
Container ships from Korea ply international sea lanes
to ports in South and North America, Europe, Australia,
the Middle East and Africa. Foreign ocean liners, cruise
ships and passenger-carrying freighters also pay frequent
visits to Korean ports. Port cargo volume has climbed
steadily, from 11.89 million twenty foot equivalent units
(TEU) in 2002 to 22.54 million TEU in 2012, with the
expansion of port facilities and increased productivity
through improved cargo handling capabilities at Busan,
Gwangyang and Incheon. Songdo International Business
District (IBD) has being developed on six square
kilometres of reclaimed land along Incheon’s waterfront.
It is 60km south of Seoul and connects Incheon
International Airport by an 11 km highway bridge.
Information communications technology (ICT)
Korea is a leader in information and communications
technology (ICT). This is demonstrated by its vast ICTrelated
production and exports, world-class technology,
and the wide use of internet and mobile communication
devices in the country. ICT industry-related products,
such as computer chips and mobile phones, account
for over 33 per cent of Korea’s total exports. As for
communications services, nearly every Korean owns
at least one mobile phone. Moreover, almost every
household has a broadband connection. All sectors
of industry from the food-service industry to public
transportation are heavily dependent on computers and
ICT. Programs that have been introduced increase both
public and private sector R&D investment and nurture
highly skilled R&D manpower. Smart phone penetration
rate was almost 70 per cent in June 2014.