'Korea should listen to foreign firms before changing policies'

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'Korea should listen to foreign firms before changing policies'

Korean-German Chamber of Commerce and Industry (KGCCI) President Barbara Zollmann. Courtesy of KGCCI

By Nam Hyun-woo

The Korean government should reflect on the opinions of foreign companies before introducing new regulations so Korea can keep its economic "lifeline" of foreign investment prosperous, Korean-German Chamber of Commerce and Industry (KGCCI) President and CEO Barbara Zollmann said.

She also said the trade conflict between the United States and China could be an opportunity for Korean companies to tap into the potential of the European market, where the trade between Korea and Germany can play a heavy role.

"There's always a general demand companies have that they want to know now what will happen tomorrow, at least in terms of regulations," Zollmann said in an interview with The Korea Times on May 21.

"We have experienced several times in Korea that new legislation comes in at short notice and sometimes even retroactively. It is of course difficult for companies to respond to that. We would appreciate the opportunity to be involved in the development of new regulations at an earlier stage so that we can not only look at how they affect companies in Korea but also look at things in the long term."

She said foreign companies in Korea hear about new regulations very late, and there should be a chance to involve them earlier.

Her remarks were in line with the multiple foreign chambers of commerce in Korea including the U.S., the European Union, Germany, France and Britain. In the wake of the Moon Jae-in administration, they have been urging the President to pay more attention to foreign businesses in Korea and regulators to provide better chances to give feedback about upcoming regulations and other rules.

Following their calls, Moon had a meeting with CEOs of foreign chambers of commerce and companies in Korea in March, marking the first such meeting since Moon assumed the presidency in May 2017, and stressed that peace on the Korean Peninsula would make the country one of the most attractive markets in the world.

Zollmann said she is very grateful that Moon initiated the meeting with foreign companies, and understands that he is facing challenging tasks including issues with North Korea, but she did not deny that the relations with the European and German companies deserve more attention, given the increasing importance of the European market for Korean companies.

"When President Moon took over, he had and still has very challenging tasks ahead of him _ the relations with North Korea, the Korean economy and much more. In this regard, foreign companies in Korea are just one part of the equation when it comes to the Korean economy," she said.

"We see that the trade war between the U.S. and China is happening and it looks like it's getting tougher every day, and we all know that Europe is an important trading bloc for Korea next to the U.S. and China. We don't have to fall victim to this but should instead tap into great the great potential of European companies."

According to the Korea International Trade Association, the trade volume between Korea and Germany stood at $30.2 billion last year, up 7.1 percent from a year earlier, making Germany Korea's seventh largest trade partner.

Trade between the two countries mostly focuses on automobiles, followed by semiconductors, pharmaceutical products, machinery and others.

From 2012 to last year, Germany has made 2,100 investments worth $13.7 billion, but last year's investment from Germany to Korea declined to $466 million from $702 million from a year earlier, due largely to companies' fear on uncertainties stemming from the U.S.-China trade tensions.

"In the latest survey of our headquarters' _ Association of German Chambers of Commerce and Industry _ German companies expect to invest less abroad and they allocate their reduced investment budget more diversely," she said. "The outlook for trade with Korea and investment into Korea will depend much on the dynamics of the Korean market and on the environment that the government creates. Korea has to decide how to position itself to remain attractive to global companies."


Potential in Fourth Industrial Revolution

Zollmann, who has been serving as the president and CEO of KGCCI since 2013, echoed the view of most other economists' gloomy outlooks on the Korean economy, but stressed that the country's potential lies in industries oftentimes regarded as the Fourth Industrial Revolution.

"We see the growth rate going down, we see the midterm potential going down, and Korea loses more and more jobs in its traditional industries. So, the outlook is not that rosy," Zollmann said. "Thus, more innovative future industries are needed to drive Korea's economy. We all see disruptive innovations happening all over the world on everything that Korea focuses on right now _ artificial intelligence, big data, mobility, connectivity and so on. These are all areas that Korean and German companies can work on."

She said this is the reason why the chamber has been holding the KGCCI Innovation Awards since 2015. The fifth edition this year, the awards recognizes innovations by companies in the three categories of business, sustainability and digitalization, and sets up meetings with bigger German companies so that they can gain access to an international network.

"When you work with startups, that's more complicated because they don't have cases to prove that they can be consistent long-term suppliers," Zollmann said. "So the best we can do is connect them with big brands and give them the opportunity to be evaluated by the big firms."

One of the success cases of the awards is Marine Bio, which makes cosmetics and filters using agar seaweed and won the sustainability award in 2017. The KGCCI said it connected the company with its several member companies in the automotive, chemical and pharmaceutical industries, and the company has inked a deal with a German company.

"We want to have a great base of innovations submitted (for the awards), because the greater the pool, the greater the potential for exciting innovation," she said. The winners of this year's edition will be awarded at a ceremony on Sept. 27.

A trainee and a trainer of Korean Chamber of Commerce and Industry's (KCGGI) Ausbildung vocational training program examine a Mini vehicle at a Seoul service center of Kolon Motors, which is a dealer of BMW in Korea. Courtesy of KGCCI

Ausbildung

One of the programs the KGCCI is running to enhance business ties between Korean and German companies is introducing Germany's Ausbildung system in Korea.

Ausbildung is a dual educational program of work and learning based on a contract between companies and trainees. By providing practical training at a business and theoretical education at a vocational school, the program has built a reputation as one of the ways to keep the country's youth unemployment low and increase the number of skilled workers.

Currently, the program covers more than 300 occupations, including automobile mechanics, bakers, dental technicians, police, bank clerks and many others. In Germany, 1.5 million trainees complete the program each year and more than 30 countries around the world are in the process of adopting the program.

In Korea, the KGCCI introduced the program in 2017 to grow the number of automobile technicians, in an affiliation with Mercedes-Benz Korea, BMW Korea, their dealers and a number of technology universities in Korea.

The program picks third-grade high school students learning car repair and maintenance and provides three years of on-the-job training at those brands alongside formal education at the universities.

In 2018, Daimler Trucks and MAN Truck & Bus Korea joined the program, followed by Audi Volkswagen Korea this year. The brands and the KGCCI are currently recruiting up to 140 students. In 2017, 86 trainees were selected for the first edition of the program and the number increased to 118 in 2018.

"Ausbildung is a company-driven program and all participating companies showed their commitment to fostering Korean young people. It's an investment by companies and they are very supportive on this program," she said. "Since the first generation trainees are currently in military service, so it will take time for us to see the outcome of the program. However, we are quite sure that the program will serve as a great tool to train highly professional workforces."

Zollmann said the number of trainees will continue to grow and the program will expand to additional professions, including jobs in sales, logistics, IT and even floristry, depending on industrial demand.


Korean-German Chamber of Commerce and Industry (KGCCI) President Barbara Zollmann. Courtesy of KGCCI

By Nam Hyun-woo

The Korean government should reflect on the opinions of foreign companies before introducing new regulations so Korea can keep its economic "lifeline" of foreign investment prosperous, Korean-German Chamber of Commerce and Industry (KGCCI) President and CEO Barbara Zollmann said.

She also said the trade conflict between the United States and China could be an opportunity for Korean companies to tap into the potential of the European market, where the trade between Korea and Germany can play a heavy role.

"There's always a general demand companies have that they want to know now what will happen tomorrow, at least in terms of regulations," Zollmann said in an interview with The Korea Times on May 21.

"We have experienced several times in Korea that new legislation comes in at short notice and sometimes even retroactively. It is of course difficult for companies to respond to that. We would appreciate the opportunity to be involved in the development of new regulations at an earlier stage so that we can not only look at how they affect companies in Korea but also look at things in the long term."

She said foreign companies in Korea hear about new regulations very late, and there should be a chance to involve them earlier.

Her remarks were in line with the multiple foreign chambers of commerce in Korea including the U.S., the European Union, Germany, France and Britain. In the wake of the Moon Jae-in administration, they have been urging the President to pay more attention to foreign businesses in Korea and regulators to provide better chances to give feedback about upcoming regulations and other rules.

Following their calls, Moon had a meeting with CEOs of foreign chambers of commerce and companies in Korea in March, marking the first such meeting since Moon assumed the presidency in May 2017, and stressed that peace on the Korean Peninsula would make the country one of the most attractive markets in the world.

Zollmann said she is very grateful that Moon initiated the meeting with foreign companies, and understands that he is facing challenging tasks including issues with North Korea, but she did not deny that the relations with the European and German companies deserve more attention, given the increasing importance of the European market for Korean companies.

"When President Moon took over, he had and still has very challenging tasks ahead of him _ the relations with North Korea, the Korean economy and much more. In this regard, foreign companies in Korea are just one part of the equation when it comes to the Korean economy," she said.

"We see that the trade war between the U.S. and China is happening and it looks like it's getting tougher every day, and we all know that Europe is an important trading bloc for Korea next to the U.S. and China. We don't have to fall victim to this but should instead tap into great the great potential of European companies."

According to the Korea International Trade Association, the trade volume between Korea and Germany stood at $30.2 billion last year, up 7.1 percent from a year earlier, making Germany Korea's seventh largest trade partner.

Trade between the two countries mostly focuses on automobiles, followed by semiconductors, pharmaceutical products, machinery and others.

From 2012 to last year, Germany has made 2,100 investments worth $13.7 billion, but last year's investment from Germany to Korea declined to $466 million from $702 million from a year earlier, due largely to companies' fear on uncertainties stemming from the U.S.-China trade tensions.

"In the latest survey of our headquarters' _ Association of German Chambers of Commerce and Industry _ German companies expect to invest less abroad and they allocate their reduced investment budget more diversely," she said. "The outlook for trade with Korea and investment into Korea will depend much on the dynamics of the Korean market and on the environment that the government creates. Korea has to decide how to position itself to remain attractive to global companies."


Potential in Fourth Industrial Revolution

Zollmann, who has been serving as the president and CEO of KGCCI since 2013, echoed the view of most other economists' gloomy outlooks on the Korean economy, but stressed that the country's potential lies in industries oftentimes regarded as the Fourth Industrial Revolution.

"We see the growth rate going down, we see the midterm potential going down, and Korea loses more and more jobs in its traditional industries. So, the outlook is not that rosy," Zollmann said. "Thus, more innovative future industries are needed to drive Korea's economy. We all see disruptive innovations happening all over the world on everything that Korea focuses on right now _ artificial intelligence, big data, mobility, connectivity and so on. These are all areas that Korean and German companies can work on."

She said this is the reason why the chamber has been holding the KGCCI Innovation Awards since 2015. The fifth edition this year, the awards recognizes innovations by companies in the three categories of business, sustainability and digitalization, and sets up meetings with bigger German companies so that they can gain access to an international network.

"When you work with startups, that's more complicated because they don't have cases to prove that they can be consistent long-term suppliers," Zollmann said. "So the best we can do is connect them with big brands and give them the opportunity to be evaluated by the big firms."

One of the success cases of the awards is Marine Bio, which makes cosmetics and filters using agar seaweed and won the sustainability award in 2017. The KGCCI said it connected the company with its several member companies in the automotive, chemical and pharmaceutical industries, and the company has inked a deal with a German company.

"We want to have a great base of innovations submitted (for the awards), because the greater the pool, the greater the potential for exciting innovation," she said. The winners of this year's edition will be awarded at a ceremony on Sept. 27.

A trainee and a trainer of Korean Chamber of Commerce and Industry's (KCGGI) Ausbildung vocational training program examine a Mini vehicle at a Seoul service center of Kolon Motors, which is a dealer of BMW in Korea. Courtesy of KGCCI

Ausbildung

One of the programs the KGCCI is running to enhance business ties between Korean and German companies is introducing Germany's Ausbildung system in Korea.

Ausbildung is a dual educational program of work and learning based on a contract between companies and trainees. By providing practical training at a business and theoretical education at a vocational school, the program has built a reputation as one of the ways to keep the country's youth unemployment low and increase the number of skilled workers.

Currently, the program covers more than 300 occupations, including automobile mechanics, bakers, dental technicians, police, bank clerks and many others. In Germany, 1.5 million trainees complete the program each year and more than 30 countries around the world are in the process of adopting the program.

In Korea, the KGCCI introduced the program in 2017 to grow the number of automobile technicians, in an affiliation with Mercedes-Benz Korea, BMW Korea, their dealers and a number of technology universities in Korea.

The program picks third-grade high school students learning car repair and maintenance and provides three years of on-the-job training at those brands alongside formal education at the universities.

In 2018, Daimler Trucks and MAN Truck & Bus Korea joined the program, followed by Audi Volkswagen Korea this year. The brands and the KGCCI are currently recruiting up to 140 students. In 2017, 86 trainees were selected for the first edition of the program and the number increased to 118 in 2018.

"Ausbildung is a company-driven program and all participating companies showed their commitment to fostering Korean young people. It's an investment by companies and they are very supportive on this program," she said. "Since the first generation trainees are currently in military service, so it will take time for us to see the outcome of the program. However, we are quite sure that the program will serve as a great tool to train highly professional workforces."

Zollmann said the number of trainees will continue to grow and the program will expand to additional professions, including jobs in sales, logistics, IT and even floristry, depending on industrial demand.


Nam Hyun-woo namhw@koreatimes.co.kr


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