For our September session we shall be discussing those issues which particularly affect foreign managed companies in the second half of 2021. I am collecting opinions from members at the moment, but it is clear that the issues include:
- Estimating the next normal
- Supply chain problems
- Uncertainty about stability and security in Northeast Asia
- Labour relations
- Uncertainty about government policy in 2022 onwards
- Climate policy
- Pandemic duration
How important these issues are depends on where the foreign company is in its life cycle. Notes on these topics are as follows:
- Estimating the next normal: How much of the changes of the last twenty months will stick? Will more work be done at home, will business travel be replaced by zooming, will the rush to AI and digital sales accelerate? Can we get the right employees for this transition? Have our salesmen and account executives changed their procedure appropriately?
- Supply chain issues: the world has gone from JIT to a slower pace in that ships take longer to get from A to B, containers and ships are often in the wrong place and freight rates have tripled. More working capital is being employed to handle this. How should this be managed?
- Security in Northeast Asia: the world has gone from a thriving global integrated system in 2019 to one that threatens to be bimodal as President Biden follows Trump with tariffs and bans on more Chinese companies. China is also restructuring its economy and apparently its society. No one is certain what this means for the many foreign companies that produce machinery in China for Korea or ship Korean intermediates to China. After the abandonment of Afghanistan by the west, how sure is anyone that the US will maintain stability in the region?
- Labour relations: there are several trends afoot, these include catch up moves by unions for low increases in 2020, the desire for a later retirement age, trouble with the wage peak and discontent amongst younger workers about the wage differential with older workers.
- Uncertainty about the next President’s policies: it seems that Governor Lee Jae-myung is likely to be the DP presidential candidate who will offer a stark choice with whoever is proposed by the PPP. The PPP are in trouble with their selection process. Governor Lee has UBI on his mind after experimenting in Gyeonggi-do, but has also done great work with the municipalities and companies in Korea. What to expect?
- Policy Changes due to Climate Controls: How quickly will the government change the rules on energy, buildings and waste?
- Pandemic continues: with all these issues there is little time to think about COVID-19 and when it will end or whether adaptations are permanent or temporary.
Please join us to discuss these issues as they relate to foreign organizations operating in Korea.
Managing Director, KABC Ltd.