[AKBC event recap] From Adversity to Opportunity
On 22 July 2020, the Australia-Korea Business Council (AKBC) held a webinar to discuss the opportunities arising in the Australia-Korea bilateral relationship post-COVID. The event was hosted by the Australian embassy in Seoul and chaired by John Walker AM, Chairman of Eastpoint Partners and Deputy Chairman of the AKBC. The speakers included Peter Underwood, Managing Partner at IRC Consulting, and Peter Kim, Investment Strategist at KB Financial Group.
John introduced the webinar by explaining that the current pandemic has revealed political turmoil and shocks to global economies, and called for businesses to reflect on these and find opportunities arising from our new environment.
Peter Underwood began by speaking about the untapped opportunities for Australian companies in Korea. He highlighted how the US-China and Japan-Korea trade disputes are disrupting supply chains, and the enhanced role that local Korean start-ups are playing to take advantage of new opportunities. Although many companies have had a ‘China plus one’ strategy for some time, more are reassessing their supply chains and seeking to diversify them. Peter Underwood stressed that diversification will not be an easy task due to high dependence on China. While Australia and Korea will not be replacement hubs for labour-intensive industries, companies should consider Australia and Korea when they reassess their supply chains, with strengths in:
- AI and blockchain technology, which are increasingly important in supply chains
- ethics, corporate social responsibility and sustainability
- telecommunications infrastructure in Korea, which makes it an attractive base for testing new technology.
Next, Peter Kim focussed on Korea’s overall strategy for the future post-COVID, as well as the under-appreciated aspects of Korea. He explained that, like many countries, Korea is at a crossroads. Korea will have to re-strategise its geopolitical approach, economic design, social policies, and industries.
Korea is seen as a hardware driven, manufacturing, and industrious nation and the past decade has illustrated that Korea is not merely about manufacturing. The country is generally underappreciated for many things and are in fact world class in software, e-commerce and culture (K-pop).
Peter Kim stressed that we should pay close attention to Korea during this pandemic as Koreans show their best side during a crisis. He said, “when the whole world gives up on South Korea, that’s when you should be interested.”
The discussion session was lively and the speakers fielded many questions from the audience. On the subject of investment in light of trade disputes:
- in many cases, local supply now trumps company track record and price
- the trade dispute with Japan is likely to be an ongoing issue
- the restructuring of global supply chains is a permanent fixture. Some Korean and Western companies are relocating their manufacturing hubs to be outside of China.
On 5G technology and Korea’s advanced internet capacity:
- Korea’s dense population allows for widespread fibre-optic internet network. Because of this, Korea is a great market to test new tech products
- while 5G is underdeveloped in the product space, there could be a ‘quantum leap’ in 5G if Korea comes out with some ground-breaking products and content.
On the topic of B2B e-commerce in Korea:
- this model was already well on its way but COVID-19 has accelerated its pace and many of these changes will be permanent
- fast rising stocks in the Korean stock exchange belong to the so-called ‘New Economy’ such as e-commerce.
On the Korean New Deal:
- a hydrogen energy future has been decided, by way of explicit government backing and big movers like Hyundai exploring ways to achieve a low carbon future
- growth is also expected in the area of raw materials for electric vehicle batteries and hydrogen fuel cells.
John concluded with a final quote from Chinese philosopher Lao Tzu,
“A journey of a thousand miles starts with a single step.”
We hope that this event can be part of that single step for both Australia and Korea to think about where they might move next in terms of our business relationship.
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Australia Korea Business Council
PO Box 24430
Melbourne, Vic 3001 Australia
Liz Griffin – Executive Director
The Australia-Korea Business Council is the leading national body committed to strengthening the Australia-Korea economic relationship.