Korea, the new maritime, economic and cultural hub

From heavy industry and entertainment to exports

The take-off of the Korean economy was initially based on heavy industry: steel and shipbuilding were two of the main sectors of this period, to which the chemical industry was soon added. This period ends symbolically with the 1988 Olympic Games in Seoul. Korea became"officially" part of the developed world. 

Korea became a global industrial power. In the shipbuilding sector, a strategic industry for any country, the progression was most spectacular. According to the Review of Maritime Transport, 32% of the world's merchant fleet is now built in Korea. Among its shipyards we find shipbuilding companies in the world's top 10: Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering, STX Offshore & Shipbuilding and Samsung Heavy Industries. 

The Asian financial crisis of the 1990s shook the robust growth of the Korean economy, but it turned out quite well thanks, again, to strong public investment, education, work culture and further liberalisation and diversification of the economy. Even so, one of the big victims of the financial crisis was a Korean company, the Hanjin shipping company, which went bankrupt.

However, to compensate for this loss, in 2021, the South Korean shipping industry created the K-Alliance, formed by HMM, SM Line, Pan Ocean and the recently merged Sinokor Merchant Marine and Heung-A Line, an alliance that should improve its competitiveness in the Asian market. In fact, although it is far from the numbers of the big four global shipping lines (MSC, Maersk, CMA-CGM and Cosco), Hyundai Merchant Marine Co. Ltd. is consolidated in eighth place in the world top 10, with 3.1% of the global container market.

With the turn of the millennium, automotive and electronics are becoming new drivers of the Korean economy and exports along with heavy industry. Samsung, Hyundai and Kia are the leading exponents of this new phase, along with a multitude of other smaller companies which, subsequently, compete effectively in global markets in a wide range of sectors: cosmetics, food, textiles, etc.

Korea had become one of the world's leading exporters. At the Port of Barcelona, for example, imports from the Asian country were growing steadily. The figures for the years 2022 and 2023 are illustrative of this almost unprecedented development. In terms of unloading traffic (i.e. exports from Korea to Spain), it ranks sixth on the list of international origins of container traffic at the Port of Barcelona.

It would be at the top of the list if this was based on the number of containers exported per inhabitant, as it is ahead of only five countries with much larger populations, such as China, the United States, Turkey, India and Vietnam. In the first four months of 2023, imports from Korea through the Port of Barcelona reached 7,270 full TEUs, an increase of 32.4% over 2022.

As a result of this activity, with 22.7 million TEUs in 2021, Busan is consolidating its position as the world's sixth port in terms of container traffic, only surpassed by Chinese ports and Singapore. The fact that South Korea's only land border is precisely with North Korea has allowed a rapid development of port activity to channel exports and imports.

The new millennium has also seen the consolidation and growth of what is probably the most influential Korean industry on the planet: entertainment. As happened in other sectors, the confluence of factors such as culture and labour productivity, society's ability to constantly adapt to globalisation, effective state planning, public-private collaboration, cheap financing, etc. are some of the elements that help to understand why, as the new millennium progresses, Korean cultural productions are triumphing beyond its borders. 

First in East Asia and then around the world. The process finally culminated in the unprecedented successes achieved by Korean productions in the West: the film Parasites became the first non-English language film to win the Oscar for Best Picture; The Squid Game became the most watched series in history; and BTS became the first non-English or Spanish language music group to simultaneously top several charts in the US and major European countries. 

Korea had thus completed an unprecedented transformation from agricultural poor country to global cultural icon.

Threats on the horizon

However, this unprecedented success is currently under threat.

Mainly due to four factors:

1. The very sharp drop in the birth rate.
2. The increase in the price of housing 
3. and education costs.
4. The looming presence in the north of a nuclear-armed neighbour.

Indeed, Korea has by far the lowest birth rate in the world. The latest data placed it at 0.7 births per woman, a far cry from the second-ranked birth rate of over 1. 

Housing prices, especially in the Seoul metropolitan area, a unique case in the world of population concentration in the capital of a large country, have reached stratospheric levels like other Asian mega-cities. 

Education costs have also skyrocketed. The exorbitant competition to provide children with the best possible education means that families have had to devote a large part of their income to supplementary education: academies, tutoring, private tutors, etc. 

Finally, the existence of a nuclear power such as North Korea, characterised by an opaque, mysterious and unpredictable government, is a very dangerous Damocles sword.

We hope, however, that as they have done on other occasions in the past, Korea, its leaders and its people will succeed in overcoming these complex challenges.