Gyeonggi Province Aims to induce over $1.5 billion investment in 2006 from 40 advanced foreign companies Gyeonggi Province attracted a total of $13.4 billion in foreign investment from 93 top-tier foreign companies in 2005, tiding over various regulations and obstacles. Encouraged by last year's successful business performance, Gyeonggi Province aims at inducing more than $1.5 billion investment from 40 advanced foreign companies this year, Sohn Hak-kyu, governor of the province, said. To attract top-class foreign enterprises to Gyeonggi Province, Gov. Sohn made 17 overseas business trips for a total of 90 days to the United States, Europe and Japan during the past four years. It involved a total of 236,660 km-long journeys equivalent to circumnavigating the globe six times. Along with this, Gov. Sohn invited 81 foreign entrepreneurs over 58 times to the province and held business consultations to induce top-tier foreign companies. Killing two birds (technology transfer, jobs) with one stone Since July 2002, Gyeonggi Province attracted $13.4 billion in investment from 93 top-tier foreign companies with advanced technology, creating 74,000 new jobs. Among the foreign companies are the 7th-generation photomask production and R&D base of Hoya Corp. of Japan, Merke of Germany boasting monopolized technology in manufacture of liquid crystal, and 3M of the United States possessing the world's best enhanced brightness film. Almost all of the foreign companies Gyeonggi Province attracted are from advanced industries, which generate greater benefits in terms of technology transfer to domestic companies and creation of jobs, Gov. Sohn said. Secrets of success in luring top-class foreign companies Firstly, Gyeonggi Province has provided foreign investors with high-quality administration services, including on-thespot briefings, through its reform of administrative procedures, Gov. Sohn said. For instance, the province shortened the period necessary for designation of Paju LG. Philips Estate as an industrial estate to six months, from the originally required two years. The New York Times reported details of the Paju LG. Philips project in its Jan. 15 special edition under the title of "Koreans finding out the most important asset in the neighborhood of DMZ." Since then, Paju LG. Philips has been the target of benchmarking by major domestic and foreign business concerns. Secondly, the province has set as its administration's goal the accomplishment of "Gyeonggi Province most suitable for doing business," he said. As the U.S. auto parts maker Delphi sought a solution to constructing a slip road to its research center to be built in Yongin, Gyeonggi Province at a cost of $20 million, the province supported 1 billion won of the cost from its budget to build the slip road, enabling the company to hold a dedication ceremony within the planned period. So far, a total of 119 slip roads were completed for foreign companies in the province. Thirdly, Sumitomo Chemical of Japan and Nongshim of Korea concluded a memorandum of understanding (MOU) on land exchange, called "land swapping," with the active support of Gyeonggi Province. At that time, the chairman of Sumitomo Chemical said, "For the first time in 150 years, we received help from a Korean provincial government." Fourthly, Gyeonggi Province created a joint investment attraction team comprising representatives from regional labor organizations and executives and employees of large companies and requested the team to explain Korea's labor-management relations to foreign investors to help ease concerns over strong labor union activities. Succeeding in attracting 3M through concerted efforts Gyeonggi Province's successful attraction of foreign investment is a very precious one as it was achieved despite a host of regulations and restrictions in the metropolitan area. In May last year, the province succeeded in attracting the global hightech U.S. company 3M, armed with production technology of the world's best enhanced-brightness film through revision of relevant regulations. In the process, the greatest difficulty was not in persuading 3M, but in persuading the central government. Gov. Sohn and all provincial government officials joined forces to persuade the central government, and finally resolved the problems that had deterred 3M's investment in the province. Benchmarking of Gyeonggi Province by foreign governments As the successful results of Gyeonggi Province's foreign investment attraction were heralded abroad, a growing number of foreign government officials have been visiting the province to benchmark the secrets of inducing foreign investors. In 2005, more than 20 Japanese, Chinese and German government officials visited the Pyeongtaek estate exclusively for foreign investors and listened to a presentation prepared by Gyeonggi Province. Along with this, a number of Korean government officials from Busan and South Jeolla Province and graduate students visited Gyeonggi Province to gain materials related to the secret of attracting top-tier foreign investors. Related to this, Gyeonggi Province published a collection of essays containing background stories concerning introduction of foreign high-tech companies under the title of "My Story of Demolishing the Global Barriers." A total of 25 people from all walks of life, including executives of large companies, wrote about stories behind their efforts to attract worldfamous companies, including LG. Philips LCD, 3M and Siemens, for the essay collection. A key reason behind the G y e o n g g i Province's successful attraction of foreign hightech companies is the province's elaborate strategy linking selection of function fields for attracting investment, selection of business lines by area for creation of industrial clusters and direct consultations between relevant CEOs and Gov. Sohn. In relation to selection of function fields for attracting investment, Gov. Sohn said that the province has focused on production and R&D facilities of foreign high-tech enterprises that can create many new jobs and make technology transfer possible, thus avoiding development and SOC projects. He also said the province has been pushing for creating a cluster of semiconductor, auto parts, IT and LCD industries in Pyeongtaek and Hwaseong, a cluster of the display industry, including LCD and PDP, in Paju, and a cluster of IT, BT, semiconductor and R&D in Suwon and Sungnam. At the same time, Gov. Sohn had frequent contacts with foreign CEOs, and included representatives from labor unions and executives of large companies in the team to attract foreign investment, enabling foreign investors to have more confidence in their investments in the province. Gyeonggi Province wins overseas investment award Another reason behind the province's successful attraction of foreign investors was its outstanding skills in overseas investment explanatory meetings. For instance, Gyeonggi Province garnered the best award at the overseas investment explanation competition among local governments held at KOTRA in Seoul on March 8 under the auspices of the Ministry of Commerce, Industry and Energy. Among 16 participants of local governments, Gyeonggi Province earned the highest marks through its almost perfect presentation on conditions of location, economic environment, status of real estate for foreign investors, investment incentives, success cases of attracting high-tech companies, and the province's accumulated know-how. Gov. Sohn said, "Gyeonggi Province's all-out efforts to attract foreign high-tech companies are designed to ensure that the nation can maintain its high economic growth after about 10-20 years." "Under the recognition that attracting top-tier foreign companies is the key to revitalizing the Korean economy toward the era of $30,000 per capita GDP, Gyeonggi Province will continue striving to induce foreign companies equipped with outstanding new technologies," he added. In 2006, Gyeonggi Province plans to attract $1.5 billion in overseas investment from about 40 foreign high-tech companies and offer new jobs to 37,500 people, directly or indirectly. "For construction of a global R&D base in Gyeonggi Province, we are also actively pushing for the cluster of state-of-the-art R&D estate on a lot of 200,000 pyeong (660,000 square meters) in Suwon," he concluded.