[VIEWPOINT]Primer for Attracting Foreign InvestmentWhen doing business in Korea, it does not take long to realize that Koreans in general are nationalistic and conservative. The attitude that Koreans have toward foreign products or multinational companies have changed slightly as they came to recognize the importance and need for foreign investment in the years after the economic crisis, but it is still not all positive. Koreans have accepted foreign investment as something needed, but they still do not feel comfortable about multinational companies, foreign products or foreigners. Actually, this may be natural since in the old days Koreans suffered quite a lot from external pressures. However, these days we are living in a world of globalization in which countries and enterprises are fighting an invisible economic war every day.
It seems that Koreans are defensive when it comes to foreign companies or foreigners. Also, they think, because multinational companies are strong giants and Korean companies are weak players, Korean companies can only get hurt in the competition. They are concerned that when multinational companies enter the Korean market, national wealth leaks out or workers get chased out into the streets. When multinational companies do not acquire a Korean company after doing due diligence, they are criticized for "having taken company secrets."
There are many instances of stereotypes about multinational companies in Korea. If one drives an imported automobile, he is called unpatriotic or looked at negatively. If the imported automobile market share goes up slightly, luxury goods spending is reported as having increased significantly by the media. When talking about multinational companies' business in Korea, good things are seldom talked about but bad things are talked up. On the other hand, when Korean companies excel, people say, "Home-made is the best." In any country, preference for its own products tends to exist. But, in Korea, multinational companies and foreigners are definitely a minority.
Recently there is a concern that foreign investment has decreased significantly this year. Because of this, I am often asked how foreign investment can be increased. The answer is very simple. Multinational companies in the Korean market must succeed in business and make money. This will prove that Korea provides an environment that is good for multinational companies.
Many companies that have not invested in Korea yet or are considering investing in Korea look very closely at companies that have already entered or made investments. They look at how existing companies are doing even before looking at Korea's GDP, population or market growth potential. When earlier examples do not show good results, they send their investment to another country or region. After all, when companies that enter or invest in a certain market, it is with the objective of making money, so if companies that invest in Korea have difficulties, get treated differently, and do not make money, would any other company want to invest?
At this point, Koreans need to ask themselves if they provide an environment in which multinational companies can make money. Multinational companies are not asking for special benefits. They are asking for a business environment in which fair competition can take place. Of course some people might say that multinational companies should be prepared to accept the disadvantages that come with doing business in a foreign country. If so, should multinational companies even enter or invest in Korea? If foreign investment continues to be inactive, can this help the Korean economy to grow in the future? This may sound contradictory to some Koreans, but it is my strong belief that in order to increase foreign investment in Korea, multinational companies need to come to Korea and make money. More and more foreign investment is the short cut to strengthening the roots of the Korean economy.
The writer is president of DaimlerChrysler Korea
by Wayne Chumley