In 2017, the Korean economy grew by 3.1%, compared to a growth rate of 2.8% in 2016. Korean exports rebounded and soared to an all-time high of USD 573.9 billion (USD 495.4 billion in 2016). Nevertheless, the economic development was somehow overshadowed by the election of new Korean president. In May 2017, Moon Jae-in was elected and became the 19th President of the Republic of Korea.

For European businesses, Korea is and will continue to be an important market. Yet, there are still areas requiring improvement to build a better business environment. Initiatives to support business such as deregulation seemed to have phased out. Overall, it can be stated that not much progress has been made in terms of substantial changes referring to improvements in business and international trade. Instead, the new administration has launched meaningful reforms on the creation of jobs and income led growth. It needs to be seen if the hopes and expectations will materialize.

108 company executives, representing a combined workforce exceeding 30,000 employees and a total turnover of EUR 28 billion, answered the survey. Executives confirmed that the Korean market remains an important market; 44% of industry leaders are of the opinion that the Korean market is of increasing strategic importance and 47% of them stated that the importance of Korea is unchanged. On the other side, 61% of respondents feel that doing business in Korea has become more challenging than two years ago.

The European business community believes in the Korean market and its current and future potential. It seems nevertheless, that a review is needed to ensure further economic growth. Besides the Economic Growth of Korea, Rising Labor Costs, Ambiguous Rules and Regulations, Market Access Barriers, and Discretionary Enforcement of Regulations have been identified as key business challenges. Furthermore, the feedback from company leaders also states that efforts are needed to better the Rule of Law / Transparent Policy Making, Fair Competition and Domestic Consumption.

The challenges ahead for Korea, and all industry players both domestic and foreign, are considerable. We sincerely hope that the Business Confidence Survey serves as a useful tool for business people and policy makers to make future-forward decisions for the mutual benefit of the Korean society, the Korean economy, and European businesses.