Foreign direct investment in Korea up 42% last year

Foreign direct investment (FDI) in Korea amounted to 29.5 billion won last year. It was the biggest FDI in 58 years since the government began compiling such data in 1962.

It appears FDI, which was centered on the large-scale manufacturing industry in the past, is rapidly shifting toward new industries, such as information technology (IT).

According to the Ministry of Trade, Industry and Energy on Monday, FDI in Korea last year ( $29.51 billion, based on reported value) was up 42.3% from the previous year.

By industry, $23.57 billion was invested in the service industry, up 64.2% from a year ago.” Greater investments were made in IT (317.2%), distribution (139.1%), and business support and rental (833.0%).

In particular, the share of information and communication in total FDI has increased remarkably from 12% in 2020 to 30% last year. This is because more investments have been made in this area as non-contact platform services have emerged due to the spread of COVID-19 and more IT-based startups have been established. A large amount of investment has been made in delivery applications, metaverse and fintech.

Investment in new industries, such as future cars, biotechnology, information and communications technology (ICT), was $13.44 billion, up 59.6% from the previous year. Increased investment in fourth industrial revolution technologies, such as expanding data centers or building IT-based logistics centers in Korea has affected the boost in investment. On the other hand, FDI in manufacturing was $5 billion, down 16.2% from the previous year. The FDI in the chip manufacturing industry was up 81.8% while that in textile/fabric/clothing and food was down 97.4% and 42.3%, respectively.


Teuk-Gyo Koo kootg@donga.com