[South Korea-Japan Ties] Seoul should forge strategic industrial alliance with Tokyo, KOTRA chief urges

Editor's Note: Aju Business Daily is publishing a special series to mark the 60th anniversary of the normalization of diplomatic ties between South Korea and Japan. The series reflects on the renewed relationship between the two neighbors.

SEOUL, October 1 (AJP) - "If South Korea becomes a reliable partner in Japan's major manufacturing projects including semiconductors, hydrogen, ammonia, secondary batteries, and shipbuilding, the country's competitiveness in advanced industry competitiveness can make a quantum leap," said Park Yong-min, head of the Korea Trade-Investment Promotion Agency (KOTRA)'s office in Tokyo.

In an interview with Aju Business Daily on Sept. 16, he vowed, "KOTRA will be at the forefront of securing a competitive edge in exports."

Park said that Japan increasingly recognizes the need to partner with South Korea amid the U.S.-China rivalry and its own focus on nurturing advanced industries. Reflecting on his career, Park said, "When I first started working in Japan about 30 years ago, there was skepticism about South Korea's technology and corporate resilience. Now, Japanese companies are actively seeking partnerships with South Korean firms."

Since joining KOTRA in 1995, Park has worked in Japan, Canada, China, and the U.S.' Silicon Valley, supporting South Korean companies' global expansion. He now works in Japan, overseeing four trade offices while formulating strategies for South Korean firms seeking to expand into the Japanese market.

Park explained that while the two neighbors were once competitors, they now complement each other, with South Korea focusing on manufacturing and Japan on materials and equipment. "For advanced industries to remain competitive, core technology, manufacturing, and component design must work seamlessly together, making the two countries ideal partners," he said.

Japan serves as a perfect testbed for South Korean startups, offering a market 2.5 times larger than South Korea's, with geographic proximity and similar political and cultural backgrounds.

Comparing Japan to Silicon Valley, he said, "While Silicon Valley teaches success, Japan is where business ideas can be turned into revenue." He highlighted promising sectors like artificial intelligence (AI), digital transformation, healthcare, and pet industries, where South Korean startups can address Japan's social issues like low birthrates and aging populations.

Park cited Caplix, which launched an unmanned rental car solution in Okinawa in 2022, as an example. Caplix's facial recognition kiosks allow rental processes to be handled automatically, tackling labor shortages in Japan's aging society.

Since Japan's Digital Agency was established in 2018, local governments have allocated significant budgets for digital transformation projects to address issues like automation, low birthrates, and aging populations.

"KOTRA has supported South Korean startups and exporters by connecting them with local importers and helping them adapt to Japan's policy changes and relevant regulations," Park said.

He emphasized that South Korea and Japan can form an effective value chain in advanced industries such as semiconductors, automobiles, batteries, and hydrogen, helping mitigate supply chain risks amid U.S.-China tensions and tariff disputes. "We are looking at sectors where South Korea and Japan can create a synergy through collaborative projects," he added.

Park urged South Korean exporters to be proactive, stressing that many fail despite having high-quality products with competitive prices, due to a lack of understanding of Japan's customs procedures and distribution networks. "Without patience for lengthy administrative processes and bold local hiring and investment, success is difficult," he advised.

"Now is the time to strengthen partnership as both South Korea and Japan seek new frameworks for cooperation," said Park, wrapping up the interview. "Within the broader framework of building a supply chain between the two countries, KOTRA is developing long-term projects such as expanding collaboration in research and development and forming joint ventures."

* This article, published by Aju Business Daily, was translated by AI and edited by AJP.

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