Returning from Tokyo IR to attract investment…

I departed on a 9 o’clock plane in the morning to visit Tokyo, held a joined by about 30 companies in the semiconductor and display field, and returned on a 8 o’clock plane.
As I was on a one-day business trip, I had to wake up at dawn, take the morning plane, eat my lunch and dinner from 2 lunchboxes at New Otani Hotel in Tokyo, and return home without even taking a step outside the hotel.

I feel tired, and my heart is heavy. This is because the number of companies willing to invest in Korea is on a decline.

The average first year salary of Japanese graduates with a science and technology major stands at KRW 1.6 million, which means that it is rather lower than that of Korea. In other words, in terms of labor cost, Korea does not hold a relative advantage over Japan. Real estate prices have risen sharply, and are now similar to those of Japan.

Of course, this situation is mainly attributable to the era of the strong Yen coming to an end, and the new strength of the Korean currency, which has appreciated by 30% over the past 3 years.

Compared to Japan, where the first year salary of college graduates has stayed at the same level for the past decade, Korean graduates have seen a 5% annual increase. At present, their starting salary is almost equal to that of Japanese college graduates, and is sometimes even higher. Through tremendous efforts over the past 20 years, Japan has been able to cut costs. Now, they are witnessing a miracle, as factories that had moved abroad have now returned. These days, skyscrapers are being constructed in the center of Tokyo, and college graduates are landing jobs so easily that the only problem companies face is the difficulty in recruiting outstanding talent.

If this is the situation in Japan in the semiconductor and display sector, then what industry would be willing to invest in Korea? This is the question I keep asking myself, and I cannot find an answer.
At the waiting area at Haneda Airport, a young man who was president of a factory in Anseong recognized me, and expressed his grievances for quite a long time, saying he had “much to say.” He was the president of a mid-sized, electric product factory that employed 1,000 workers and earned KRW 200 billion in revenue.
“I cannot sleep these days because it is so difficult to run a factory in Korea. But I cannot move abroad immediately because I have invested KRW 30 billion in the facilities. Don’t you think the provincial governor should help?”
Yet, there is nothing much that the provincial governor can help him out with.
Nevertheless, the government is talking nonsense, saying “Factories cannot be constructed in the metropolitan area,” and “Factories cannot be larger than such and such square meters.”
The government is blocking factories from coming into Korea, when in fact, there are not even enough factories willing to do so in the first place. Isn’t this what we call anachronism?

“What will our children make a living with?” Today, after thinking about this for a long time and not being able to find an answer, I cannot find the peace to fall asleep.

Kim Moon-soo, at dawn
May 11, 2007