Korean firms explore new opportunities in Slovakia

A DECADE ago many Koreans confused Slovakia and Slovenia. But South Korea’s new ambassador to Slovakia Seok-soong Seo says this is no longer true and now not only do many Koreans know where Slovakia is, the country has become one of its most important trading partners and destinations for Korean investments.

Seok-soong Seo, Ambassador of the Republic of Korea to Slovakia Seok-soong Seo, Ambassador of the Republic of Korea to Slovakia (Source: Jana Liptáková)

A DECADE ago many Koreans confused Slovakia and Slovenia. But South Korea’s new ambassador to Slovakia Seok-soong Seo says this is no longer true and now not only do many Koreans know where Slovakia is, the country has become one of its most important trading partners and destinations for Korean investments.

The Slovak Spectator spoke to Ambassador Seo about the Slovak business environment, Korean investment prospects in the region, the interest in Korean culture in Slovakia and the importance of qualified labour.

The Slovak Spectator (TSS): In October the European Union and the Republic of Korea signed a Free Trade Agreement opening the way for more intense trade links between the EU and Korea, one of Asia’s biggest economies. The EC said that the agreement is one of the most significant agreements that the EU has reached with a partner outside the union. How do you see the importance of the agreement for Korea?

Seok-soong Seo (SSS): The Republic of Korea, as a leading exporter, has numerous free trade agreements with different countries. Of course, Korea’s largest trading partner is China, but the European Union bears a certain prominence when it comes to trade and also investment destinations and this is why the completion of negotiations on the Free Trade Agreement (FTA) with the EU is very important. The FTA should boost certain types of exports while Korea sees tremendous room to increase the volumes of bilateral trade in different sectors, not just industrial ones.

As far as investments are concerned, an FTA does not guarantee an increase of investments, statistics show that. However, in the case of Europe some investments will definitely increase. We only have to find the best location for future investment. I believe that Slovakia is a number one partner, because we have a very good starting point here. The country offers political stability and a flexible labour market with productive labour. What Slovakia can do, however, is to make the business environment even more attractive for the investments planned for the EU.

All in all, we know that trade volumes will increase and this is the main reason why we have signed such a document.

TSS: Has the global economic downturn considerably changed the plans of the Korean investors?

SSS: To cut a long story short, 40 years ago Korea was one of the poorest countries in the world. When we think about those $2 billion that we have already invested in Slovakia, it is a small miracle. However, just like Slovakia, we also depend on exports and since there was a downturn in the countries of our main partners, it has affected the Korean economy as well.

Yes, even the slightest downturn affects Korean companies too. Of course, one of the solutions then is to find new, available markets where we have not been before. So we are reaching out towards Africa and Latin America. The second option is to focus on markets where we have already invested and nurtured some deep relations, for example Slovakia, where we already have a big industrial base: the automotive industry, represented by Kia in Žilina, and electronics,
represented by Samsung in Galanta, which are both in the manufacturing sector.

When I presented my credentials to Slovak President Ivan Gašparovič he said how much he welcomes Korean business activities in Slovakia but he also suggested to me that as an ambassador I should try to introduce opportunities for investment in other sectors as well, such as chemical production, research and development centres, the service sector and e-government. It’s true that there is opportunity here since we have some strong basis in these sectors in the Asian countries. And luckily some companies might have the money and the strong will to invest here, but might not have the information.

TSS: If I understand correctly, part of your mission will now be to focus on these new business opportunities. What other priorities will you have during your service here in Slovakia?

SSS: I understand that the Slovak government would like to see large Korean companies become better informed about the opportunities that are here and it will be part of my job to make sure that happens and that Korean investors have the information they need. I do see a lot of possibilities here and our relationship with your country is still quite new. So there is room to explore new opportunities.

As I mentioned, the chemical industry and segments outside the manufacturing industry might be interesting as well, for example in R&D centres, but also in logistics where we are quite strong. And I will try to bring both peoples closer to each other by strengthening cooperation in culture, education, and tourism between our two countries during my term of service, of course.

TSS: The Republic of Korea is one of Slovakia’s most significant economic partners outside the European Union, and so far over 70 Korean companies have invested in Slovakia. What do you see as the main advantages of Slovakia as an investment destination?

SSS: We are satisfied with the supportive approach of the Slovak government. Without this assistance and understanding from Slovak officials investments by Kia and Samsung would never have been so successful, I believe. Yet Kia and Samsung, or any large corporation, of course invest in a country because they want to make money and if they see the chance they will simply go there. This is the nature of companies everywhere and a feature of the market economy. Slovakia offered them that chance.

However, in terms of the business environment or conditions, I hear from the Korean community here, but also from other ambassadors, that if Slovakia had better infrastructure, especially highways and motorways in eastern Slovakia, it would really add to the attractiveness of the country.

For example highway connections between Žilina and both the Czech Republic and Poland would be very beneficial. Investors are satisfied with labour productivity and are ready to train their staff so that there are really top managers at the company. However, if they decide that they want more creative, even-better trained people for their companies, they might face difficulties finding such young, well-trained and talented workers. This is one of the problems that perhaps Slovak society could focus on.

Based on the statistics, there are more than 70 Korean companies here and I believe that before long there will be even more, up to 100. There are more than 2,000 Korean people living and residing in Slovakia and there are many chances for talented young workers to find a job with a Korean company.

TSS: Has the potential for academic exchange been fully explored between Slovakia and the Republic of Korea? Where do you see potential for further cooperation?

SS: Absolutely, there is room for further improvement. We are currently giving scholarships to three students from Slovakia every year. But there is a lot of potential for talented and hard-working Slovak students to go to study in Korea. Perhaps this is rather a task for the Slovak ambassador in Korea to let Slovak people know about these opportunities. If there is a strong will and interest, I am pretty sure that a lot of Korean universities could offer scholarships for them.

But it is not only schools that can support the education of young and talented people. For example, I mentioned that Samsung and Kia have had some problems finding talented and creative young workers. If there is a good synergy, Samsung and Kia might support these talents. In Korea, companies do invest in the education of young people, because they might be their potential employees. So high school or university students, along with the support of a company, get an almost 90 percent guarantee that they will become interns at that company. This practice could perhaps be used in Slovakia as well.

But even at the governmental level outside the corporate sector, there should be a lot of opportunities. Unlike Slovakia, other countries are sending a lot of students to Korea where they receive scholarships. I hope that talented young Slovaks will show an interest, too.

TSS: Is the language barrier a significant factor in the life of the Korean community here?

SSS: To master any foreign language in quite a short time is a difficult job, not only the Slovak language. The language barrier, although it exists, is not a big problem. People can still use English when they need to communicate. Honestly, I am not aware of [any major] problems raised by Korean companies because of the language barrier.

TSS: There are about 50 people studying Korean language at Comenius University in Bratislava. Do Korean investments in Slovakia create more need for Korean to be studied here? Has your embassy noticed a growing interest in the Korean language? Are Slovaks receptive to Korean culture?

SSS: The establishment of the Korean chair at Comenius University is one of the most important achievements made by former Korean Ambassador Park, which was made possible by the financial assistance of the Korean Foundation. The foundation sent Professor Kim to Slovakia and undertook to finance the Korean chair for two years. The programme started in February this year and will continue next year. The 50 students who finish this course will probably play an important role in narrowing the gap between Korean and Slovak culture. They will promote understanding of Korean culture and contribute to eliminating any misunderstanding between the two cultures.

And as for the language gap, Professor Kim teaches Korean so that the students can speak at least basic Korean, and they are quite good at it.

They have a very good talent for languages: I think their ability to speak foreign languages is better than Koreans’.

One of the aims of this embassy is to strengthen the Korean chair at Comenius University, while our ultimate goal is to establish a full Korean studies programme with its own degree at the Department of Asian studies. Slovak students should be able to major in Korean studies, so that they take not just one course but can fully understand Korean cultures, Korean languages, and all other aspects of Korean society.

TSS: Slovak universities report a declining interest in studying for scientific and technical subjects. Is there a similar problem in Korea?

SSS: We indeed face the same problem. Young people tend to prefer humanities and law, and want to become doctors, judges or businessmen, so the Korean government deliberately encourages young people to study science and engineering. The Korean government has set up special high schools dedicated to teaching science and technology. Those schools attract very bright young people. So the government intentionally promotes this environment and encourages young people to choose science and engineering for their studies.

TSS: Your country is among the world’s largest shipbuilders. How has Korea achieved this standing?

SSS: Forty years ago, Korea started with light industries like textiles, simpler chemical products and other segments of the manufacturing business. Then, in the next step, we had to focus on heavy industry, like the steel industry. Gradually, we developed production of automobiles and also shipbuilding. At a certain stage of development we had inevitably to choose something, since we have been such a strongly export-driven economy: we have almost no natural resources, hardly a single drop of fossil fuels. What we had was a high-quality labour force and a strong will to educate the younger generation. Then we shifted towards high-technology production and decided that some of the heavy industry must go. Yet, to go back to your question, how one becomes a leading shipbuilder, two things perhaps: a strong will to develop and survive and, second, favourable global market conditions enabling developing countries to catch up.

TSS: What is your professional background and where have you been posted?

SSS: I have a strong background in trade, investment and commerce and before coming here I was in charge of world trade issues in the Ministry of Knowledge Economy in Seoul. This is my sixth foreign posting, but my first as an ambassador. Before, I worked in Japan, the USA, Russia, Canada and Japan again. I have been in charge of foreign investments in Korea but also dealt with issues of climate change, for example.

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