South Korea: East Asia's Most Developed Economy

The Republic of Korea (the more formal name for South Korea) is the most-developed East Asian nation, and the 17th most developed nation in the world, according to the latest release of the Human Development Index (HDI) published by the United Nations Development Programme (UNDP). The most recent report, issued on 14 December 2015, uses new metrics that also factor in income inequality and other revised measurements for the progress of a society. “Wait!” you might interject, “Isn’t Japan the most-developed nation in East Asia?” For the longest time, that might have been the case. In recent years, though, South Korea, with a score of 0.898, has nudged Japan, with its score of 0.891, out of the top spot in the Far East region.

South Korea’s over 50 million people makes it more populous than Spain. South Korea also exceeds the Spanish GDP. Yet South Korea has an area a fifth that of Spain. For this, it earned its place, along with Singapore, Taiwan and Hong Kong as the leading economy of the Four Asian Tigers. Though South Korea only constitutes 0.6% of the world’s population (about 1 person in 145 in the world), it accounts for over 2% of the global economy ($1 out of every $50 in the world).

This rosy economic portrait has been marred by the recent global economic slowdown, especially in nearby China, which resulted in a drop in South Korea’s exports market every month for the past year.

Indeed, South Korea has a number of challenges ahead of it, as pointed out in a recent talk by futurist Thomas Frey, including its being landlocked by North Korea, its declining birth rate, and the geopolitical rivalry of China and Japan. One main point made by Frey was the linguistic challenge. Korean, as a global language community, is spoken by nearly 80 million, with most living in South Korea, followed by North Korea, and communities in other nations including China and the U.S. This puts a challenge on Koreans: to learn a second and possibly even a third language to compete in the global economy, such as Mandarin Chinese, English, German or Russian.

One reason for the linguistic isolation is the Korean Hangeul (or Hangul, 한글) alphabet. This makes Korean inscrutable to many non-natives, since there is no easy way to translate or pronounce written words, such as one can with common Latin alphabet based languages. Hangeul, though, is also the font (literally and figuratively) of South Korea’s literary heritage and tradition.

This linguistic isolation even applies overseas. For instance, in the U.S., Koreans exhibit the third-highest linguistic isolation among Asian communities, with 45% having only limited English proficiency, just a head of Vietnamese and Chinese households.

For those who take the time to penetrate the Korean market, major opportunities await, especially in technology, gaming, entertainment, and heavy industry such as auto manufacturing and shipbuilding.