Korea Ahead of Japan in National Competitiveness
The Federation of Korean Industries said in its analysis report on Aug. 12 that South Korea is now higher than Japan in national competitiveness rankings and yet Japan is still ahead of South Korea in terms of material and component technologies.
According to the federation, South Korea’s material and component trade deficit with Japan almost doubled from US$8.3 billion to US$15.4 billion from 1994 to last year and the ratio of the deficit to the total deficit with Japan has continued to increase, which means South Korea has become increasingly dependent on Japan in this sector.
“In 2019, the 1,000 enterprises with the largest R&D investments in the world included 140 Japanese and 25 South Korean enterprises,” it commented, adding, “Japan is home to 24 Nobel science price winners whereas South Korea’s number is zero.”
Still, South Korea’s macroeconomic indicators such as nominal GDP and trade volume are about to surpass those of Japan and the former is already ahead in some, including national competitiveness, sovereign credit rating and those related to manufacturing.
On the world competitiveness list of the International Institute for Management Development, Japan came in fourth in 1995 but slid to 34th in 2020 while South Korea rose from 26th to 23rd. The S&P credit ratings of Japan and South Korea were AAA and A+ in 1990 but those changed to A+ and AA, respectively.
When it comes to manufacturing competitiveness, South Korea rose from 17th to third and Japan fell from second to fifth from 1990 to 2018 on the Competitive Industrial Performance index of the United Nations Industrial. Development Organization. As for per-capita GDP on a purchasing power parity basis, South Korea overtook Japan in 2018, US$43,001 vs. US$42,725.
“Despite South Korea’s outstanding economic accomplishments for the past three decades, Japan is still ahead of South Korea in basic science and technology,” the federation pointed out, adding, “The South Korean government has a bigger role to play in this field.”