Polarization between ICT and Non-ICT Sectors Deepens in Export Competitiveness
Korea’s export competitiveness in the ICT industry is on a part with that of advanced countries such as the United States, Japan, and Germany.
Korea’s export competitiveness in the ICT industry has caught up with that of advanced countries such as the United States, Japan, and Germany, while the non-ICT industry’s export competitiveness is still lagging behind that of advanced countries, with its gap with the ICT industry widening.
Korea’s export sophistication (EXPY) index stood at 142.3 points, placing sixth among 42 countries of the Organization for International Cooperation and Development (OECD) and the BRICS, said a report titled “Comparison of Export Competitiveness of Major Countries and Implications” released by the Hyundai Economic Research Institute on April 11. The annual average growth rate of Korea’s EXPY from 2000 to 2019 also ranked high at 2.2 percent.
The research institute calculated the EXPY index using the PRODY Index that shows the value of an item in the global export market with amount and the proportion of exports by item and country. The EXPY index refers to the value of an export item and the productivity of a country that exports the item because it is calculated using a country’s per capita GDP and the proportion of exports by country.
Only in 2000, Korea’s EXPY index stood at 93.4p, lower than those of Japan (111.7p), Germany (108.1p), and the United States (106.8p). However, it rose significantly to 142.3p in 2019, which was close to those of the United States (139.0p), Germany (141.0p), and Japan (144.8p). China is also trailing advanced countries as it rose sharply from 81.4p in 2000 to 128.3p in 2019.
However, the gap between the ICT industry and non-ICT industries centered on semiconductors is getting wider. In 2000, the EXPY indices of the ICT and non-ICT industries were 95.8p and 92.1p, respectively, but the gap widened as they reached 157.3p and 136.3p, respectively, in 2019. This is because Korea’s ICT industry competitiveness grew amid the importance and value of the ICT industry growing in the global market. Korea’s ICT industry exports surged from US$51.9 billion in 2000 to US$183.5 billion in 2020.
On the other hand, Korea’s non-ICT industry EXPY index stood at 136.3p as of 2019, lower than those of Japan (144.4p), Germany (140.8p), and the United States (136.8p). The growth rate of Korea’s non-ICT industry EXPY index was 2.1 percent per year, eclipsing those of Germany, Japan, and the United States. But these countries have achieved high EXPY indices based on their technological prowess since the 2000s.