Markets World of Tooling – Spotlight Japan and South Korea
Japan/ South Korea - Over the course of 2016, WBA Aachener Werkzeugbau Akademie is presenting spotlights on the most important international tooling markets. This edition focuses on Japan and South Korea.
Japan is considered to be a country whose politics oriented themselves very early to western nations, a fact that led to Japan becoming one of the most advanced Asian nations. It is located in East Asia and has a population of 127 million. With Germany, Japan has the most negative population growth rate of all industrial nations and estimations of the UN expect the Japanese population to shrink to 108 million by 2050. South Korea’s population is also projected to shrink from currently 49 million to 47 million in 2050. Japan is considered to be one of the most highly developed countries in the world, a fact that is reflected in all relevant statistics regarding income, life expectancy and level of education.
The PISA Study, an international measure for the quality of school education, places Japan in the top positions in reading skills, literacy, mathematics and science. In South Korea, 82% of adults have a higher-education degree and the ratio of enrolled six-year-olds is 100%. Furthermore, South Korea is believed to have the worldwide highest IQ on average. Average Japanese life expectancy is nearly 83 and thereby three years higher than all other industrial nations. South Korea also has a life expectancy well above the OECD average, with an average of 81.37 years.
The Japanese economy and the industry
In terms of gross domestic product (GDP), Japan had the world’s third-largest national economy in 2015. After World War II, the Japanese economy grew despite international isolation due to close internal links between producers, suppliers and distributors. In the 2000s, the economy recovered due to liberal monetary policies, with Japan burdened by debts of nearly 250% of its GDP. During the last four years, the economy has grown moderately by an average of 0.7% per year. The GDP per capita in 2015 was approximately €28,997 and the outlook for 2016 remains positive. In comparison, the German GDP per capita in 2015 was €42,447. Japan is presently the world’s fourth-largest export and import nation.
The country is poor in natural resources but nevertheless estimated to have exported goods worth €557 billion in 2015. The three most important exports were automobiles, machinery and electronics. In 2013, the average wage level was €29,504 and thereby well above the average of all industrial nations. The average citizen works 1,735 hours every year, which is 15% more than in other industrialised nations. Unemployment currently stands at 3.4%, although a significant number of unreported cases are suspected. While other Asian countries are infamous for their cheap products, Japanese products are associated with high quality and, like Germany and Switzerland, the country is known for its high precision and efficiency.
The South Korean economy and the industry
In 1960, the GDP of South Korea was at par with poor African countries and it was incorporated into the G20 only because of massive reform efforts. Substantial restrictions on imports of goods and capital as well as close co-operation between companies and the state were responsible for economic ascent. In terms of gross domestic product (GDP), South Korea had the world’s twelfth-largest economy and recorded a GDP per capita of €25,044 in 2015. The outlook for 2016 is also positive. South Korea is presently the world’s fifth-largest export nation and the seventh largest-import nation. In 2013, the country exported goods worth €477 billion. The three main exports were semiconductors, automobiles and ships. The average annual income is €30,295 and at par with the average of OECD countries. However, the average Korean works 2,146 hours every year, which is 23% more than the average of all industrial nations. With an excellent education policy and peak values in the PISA Study, South Korea is able to count on highly qualified employees. Together with the relatively low wage level, the country is a competitive location for various high-tech industries. The main challenges are the aging population and the dominance of large corporate conglomerates, which inhibit the rise of small and innovative businesses.