[Graphics by Song Ji-yoon]
Eight out of 10 South Korean companies do not wish to bring back overseas operations to home despite incentives from the government largely due to labor-related issues, a survey showed.
According to a survey done by Korea Trade-Investment Promotion Agency (KOTRA) in February to March and disclosed to Rep. Kwon Myung-ho of main opposition People Power Party on Wednesday, 79.1 percent of 1,028 Korean companies operating business overseas said they won’t return to Korea even at subsidy offers.
Just one out of 10 firms surveyed, or 11.7 percent, said they could consider the option upon study of government grants and tax incentives.
Out of 66 companies who are mulling relocation, only 11 firms included South Korea as options. It means only 0.1 percent of firms with overseas manufacturing and business activities consider reshoring, contrary to expectations that the Covid-19 pandemic would bring many firms back to home.
Most of the companies, or 66.7 percent, said they rule out reshoring because of the fear of increase in production costs. The next frequently cited reason, 58.3 percent, was Korea’s rigid working environment with tightened working hour regulation and sharp hikes in the minimum wage. Those answers were followed by various restrictions at 33.3 percent and labor shortage at 25 percent.
By Lee Hee-su and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]