저작권자 © Korea IT Times 무단전재 및 재배포 금지
Earlier this year I wrote an article, more from a general perspective, on Singapore's attraction as a possible role model for Korea. I have recently had the opportunity to revisit Singapore, where I participated in a symposium co-organized by International Enterprise Singapore and the Korean Association of Trade and Industry Studies (KATIS).
In this sequel article I will give some more specific reasons and illustrations of why my contention has been reaffirmed by my positive impression of Singapore as an exemplar and a global as well as regional partner for Korea.
Three presentations were given by CEOs of Singapore-based companies invited by IE Singapore. Christopher Chen, center director of IE Singapore in Korea, showcased companies with international leadership and global footprint.
He shared his view that as global trade grows, and the flow of goods gets increasingly sophisticated, we will need to construct a pan-Asian enterprise rather than separate Korean and Singapore entities to combine competitive advantages and share global resources.
Both countries share very similar Asian values of hard work and trust, which will be imperative to a successful collaboration.
One of the three presenters was Vikas Goel, chairman and managing director of Singapore's eSys Technology, one of the largest PC distributors globally, as well as a leading low-cost PC assembler, who demonstrated how a small, medium-sized regional enterprise could rise to become a $1.4 billion business empire with a global spread within less than 5 years if operated with an efficient business model and differentiated strategies.
Another interesting presentation was delivered by a Korean national residing in Singapore, Eugene Rim, chief executive officer of Accord Express Holdings (one of the globally leading logistics firms), who addressed delegates on "The Strategic Alliance between Singapore's and Korea's Logistics Industries."
His emphasis on the latest technologies in the success of supply chain management is a valuable direction for Korean logistics companies to follow if they hope to make themselves cost-effective.
And the third presentation that drew my attention was one delivered by H.T.Yao, CEO of Hi-P International, one of the world's leading precision plastic tooling and secondary processes suppliers.
His detailed account of a successful and well-thought-out entry into difficulty-laden Chinese markets, where Hi-P International now has 13 profitable manufacturing plants, offers a vivid lesson to be learned by some reckless Korean investors who see China as a panacea for everything. Against the background of the expected signing of a Free Trade Agreement (FTA) between Korea and Singapore by the end of this year, if not sooner, I was impressed by some of the ideas and suggestions put forward by the speakers who outlined the opportunities for cooperation between Korea and Singapore in the fields of logistics, IT software development, automotive parts and components, finance, services and infrastructure investment.
One concrete way of achieving this collaboration is by partnering with Singaporean companies having an extensive regional presence in China (293), India (54) and Southeast Asia (364). Singapore is a leading location for telecom equipment manufacturers. There are already more than 6,000 international companies that have invested in Singapore and engaged in myriad activities, such as R&D, manufacturing, services, regional headquarters, and so forth.
So there is plenty of scope for closer collaboration between Singapore and Korea, given the two countries complementary strengths in software and hardware, respectively.
In particular, Singapore's Englishlanguage advantages in the software industry give it easier access to the burgeoning Indian market, while Korea's IT hardware expertise is second to none. Korea needs to diversify some of its business from China to newly emerging mega-markets like India.
Combining their respective strengths, India, Singapore and Korea can improve their international competitiveness in the IT industry.
Financial and risk management is another fertile area in which Korea could benefit from Singapore's proven record worldwide.
The Korean government has decided to utilize a part of its large stock of foreign currency reserves (currently standing at $206 billion as of end April 2005) by launching an investment corporation, the Korea Investment Corporation (KIC) to outplace $20 billion to global asset managers, in order to achieve better returns on these reserves.
Foreign financial expertise will be utilized by KIC and Singapore's top fund managers could be well suited to bid for participating in managing funds for the KIC, as Korea is still lacking in expertise in the asset management sector.
In fact, the KIC, which was launched on July 1, this year, is said to be modeled after the Singapore's GIC (Government of Singapore Investment Corporation), one of the world's leading fund management organizations.
During my visit to Singapore, Korea's STX Pan Ocean, one of the largest dry bulk shipping operators in the world, with about 250 vessels in operation, became the first South Korean company to be listed on the Singapore Exchange after it launched its initial public offering (IPO).
This will hopefully be followed by other Korean companies expanding their global presence by taking advantage of Singapore's prime location and sophisticated financial infrastructure. It is not by accident that Singapore has been ranked third in the World Competitiveness Rankings in 2005, while Korea is still lagging far behind at Number 29 on the list. Clearly much work still needs to be done, despite Korea's acknowledged strengths in manufacturing skills, infrastructure, public finance and higher education.
Over more than a decade, Singaporean automotive support companies numbering more than 20 have demonstrated their strengths in component manufacturing, product design, prototyping, precision engineering, and precision tool-making and other support services.
Furthermore, having attained such stringent quality standards as ISO 9000 and TS 16949 certifications, they have been capable of producing automotive parts for global first-tier automotive OEMs like Delphi, Bosch, Visteon and others.
Having also earned the coveted Preferred Vendor Status for their customers in the United States, Europe and Japan, Singaporean companies could offer not only competitively priced, and quality assured parts and components to vehicle manufacturers in Korea, but also set up new parts factories in Korea to serve its automotive industry, which ranks 6th in global automobile production.
There is also ample scope for joint investment in infrastructure. Korea and Singapore can look at opportunities to promote consortiums to invest in third countries in the building up of infrastructures.
Korea has accumulated over the past few decades a solid international reputation for construction of infrastructure such as highways, ports and airports, as well as power generation and distribution.
If this expertise and resource can be pooled with Singapore's considerable capital resources, the two countries can advance further in the construction service sector.
IE Singapore, the co-organizer of the seminar that I attended, has been very innovative and successful in playing its liaison role between overseas buyers as well as investors and domestic sellers. Global Asia Trade Exchange, or GATE, initiated by IE Singapore last year, is one such platform where pre-qualified manufacturing suppliers and partners meet up with electronics procurement engineers.
Through understanding electronics procurement trends and requirements, IE Singapore helped secure US$2 billion potential contracts for Singapore-based electronics and precision engineering companies.
This is an area in which KOTRA, IE Singapore's counterpart, could learn more about how to build up its industry knowledge of buyers' requirements and suppliers' capabilities.
In targeting IE Singapore, KOTRA needs to look at the former's approach to procurements and FDI inducement in collaboration with global MNCs, with the goal to match global buyers' needs with suitable pre-qualified domestic suppliers. Koreans should not take it for granted that the robust economic growth they achieved over the past three decades will simply extrapolate into the future. The conspicuous downturn in the Korean economy since 2003 signals a warning that it is falling behind the globalizing world economy and could end up in a long-term stagnation.
In order to join the ranks of advanced countries, and to rise to a high growth plateau, not only must Koreans actively participate in the process of ongoing globalization, but also turn away from failed, outmoded policies and examine its future strategy in the context of lower-cost competitors like India and China.
More crucially, Korea must consider Singapore, which is striving relentlessly to be a leader in the global economy through forging new ideas and engaging in innovative activities. For Koreans to do so, this calls for forward-looking and global mindsets and requires designing of appropriate and consistent policies that facilitate and promote technology and entrepreneurship.
Dr. Kim Wan-soon is the Investment Ombudsman at KOTRA/Invest KOREA. The Website of the Office of the Investment Ombudsman is http://www.iombudsman. or.kr.