March 23, 2010 13:09
Japan's Ministry of Economy, Trade and Industry is establishing a Korean department that will handle industrial and trade policies. The department will also be in charge of negotiating the Economic Partnership Agreement with Korea, gather data and conduct research about Korean industries and businesses. It is rare for Japan to establish a department to focus on a particular country for industrial rather than diplomatic or trade objectives.
Since the global financial crisis, there have been growing calls in Japan to learn from Korea. Japan has been shocked by recent developments where Korean businesses have either overtaken or are threatening to overtake their Japanese rivals, winning a major nuclear power plant order from the UAE. Koreans should be proud of that feat, but the nation still lags behind Japan in many areas.
Korea ranked third after the U.S. and Japan in terms of U.S. patent applications last year, but with 8,782 patent applications, the gap with Japan, which filed for 35,904 applications, was vast. In 2008, Korea saw a US$3.1 billion trade deficit with Japan in terms of technological products and services while Japan achieved a $15 billion trade surplus. Korea also lags behind Japan in terms of products that have the largest global market share. Korea only has 53 such products compared to Japan's 234. Last year, Korea was able to beat Japan for the first time in terms of trade surplus, but over the same period it posted a $27 billion deficit in trade with Japan. Most of the core components that go into Korean export products are made in Japan.
The gap is even greater when it comes to basic science, which forms the basis of a country's technological strength. Since Hideki Yukawa won the Nobel Prize in physics in 1949 for his theory of elementary particles, 13 Japanese scientists have won the award in chemistry and medicine. Scholars around the world forecast that Japan has a stable of scientists lined up to win the Nobel Prize in chemistry, but Korea has yet to produce a single Nobel laureate in science.
The reason why Japan intends to learn from Korea is that it does not wish to lose. From now on, Korean businesses may encounter even fiercer competition from their Japanese rivals. The government and businesses need to step up the pace and keep a closer eye on them. Some say Japan may be on the wane, but the country still has a lot to teach Korea.
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