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The Coast of Jeju Island

The Coast of Jeju Island. Spring on Mt. Halla , Jeju Island. Bulkuk Temple in Gyeongju . Mt. Seorak. Gyeonghoeru Pavilion, Gyeongbok Palace. Seopji-Koji on Jeju Island. Cheonggyecheon - Night. Cheonggyecheon - Day . Jeju Island. Jeju Island.

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The Coast of Jeju Island

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  1. The Coast of Jeju Island

  2. Spring on Mt. Halla, Jeju Island

  3. Bulkuk Temple in Gyeongju

  4. Mt. Seorak

  5. Gyeonghoeru Pavilion, Gyeongbok Palace

  6. Seopji-Koji on Jeju Island

  7. Cheonggyecheon- Night

  8. Cheonggyecheon- Day

  9. JejuIsland

  10. JejuIsland

  11. Investment Opportunities in Korea for Foreign Venture Capital S I Park Director Invest KOREA, KOTRA

  12. Contents • Overview of the Korean economy • Korea’s Wow factors & Investment Opportunities • for Foreign VCs • Invest KOREA

  13. Overview of the Korean Economy

  14. Key Economic Indicators – 4th Largest in Asia and 13th Largest Globally (Unit: US$ bil.) GDP Composition by Sector Labor Force by Occupation Agriculture 2.5% Others6% Others 9.1% Maintained at over US$270 billion since Nov. 2009 (as of June 2010) Manufacturing 18% Services 60.3% Services 76% Manufacturing 28.1% ※ Source: The CIA Factbook/The Bank of Korea ※ Source: The Bank of Korea 4

  15. Korea’s Major Trade Partners (2009) * MTI 4 Digit Source: KITA (www.kita.or.kr) 5

  16. Outlooks for Korea’s 2010 economic growth • IMF: 6.1% • OECD: 5.8% • Macquarie: 6.6% Image courtesy of BusinessWeek • Bank of Korea: 5.9% for 2010 • 4.5% for 2011 • Korea Development Institute : 5.9% 6

  17. Korea’s Wow Factors & Investment Opportunities for Venture Capital

  18. World-Class Human Resources High Educational Zeal and Achievement 56%of Koreans between 25-34 have attained post-high school level education. Korea has the largest number of TOEFL test takers in the world. (2009: 149,027) Korean students make up the largest group of foreign students in U.S. and China. - The 3rd largest source of foreign students for USA and the largest source in China (reached 54,000, accounting for 38 percent of the total foreign students in China, Nov. 2006). Technological Competitiveness The information technology skills of Koreans rank in the top three globally. Korea ranks 3rd in patents granted to residents and 1st in patent productivity. Information Technology Skills (2007)* Higher Education Achievements (2007)* 01 Iceland 9.39 58.70 01 Singapore 02 Israel 9.28 55.00 02 03 56.00 Korea Canada 03 Korea 9.07 04 Japan 54.00 04 Singapore 8.85 10 41.20 Hong Kong 05 Finland 8.80 14 40.00 USA * Based on a scale of ten * Percentage of population that has attained at least tertiary education for persons 25-34 ※ Source: IMD World Competitiveness Online – updated in May 2009 8

  19. Sophisticated Domestic Market $20,000 = $1 Trillion Market 50 Million Large Market with Sophisticated Consumers • Home to 49 million people (2009) World’s 15thin GDP (2009) • Early adopters as a test market for new products • The buying power of Korea’s brand-savvy consumers is increasing quickly • The presence of 245 Global Fortune 500 firms (2008) Household Consumption Expenditure (US$ billion) A Big Trading Nation • Trade with Asian neighbors accounts for over half of Korea’s trade volume. • China, USA and Japan are Korea’s largest trading partners. Ranks 16th globally • Korea trades with almost everycountry (over 200) in the world. Source: IMD World Competitiveness Online 9

  20. Global Leading Industries • Korea’s leading industries obtained high scores and set goals for future development. Semiconductor & Display Market share in the United States went beyond 7%.  To accelerate development of electric vehicles, following the mass production of hybrid vehicles Market shares of semiconductors and displays have exceeded 50% in the global market. Will start equipment investment in next-generation display (US$23.5 BN by 2013)  To spur commercialization of next-generation memories and flexible displays Ship-building Automotive Maintained top-ranking competitiveness amid drastic decrease in orders  To develop eco-friendly high-tech vessels and those for marine and leisure use MobilePhones Leading the global trend: Korea’s touch screen phones prevail.  To dominate the markets of smart phones and 4G mobile communication Source: Ministry of Knowledge Economy 10

  21. Overview of R&D in Korea / Korea’s New Growth Vision – Green Growth National R&D: US$12 bn (2000) → 31 bn (2008) Government’s R&D: US$3.1 bn(1999)→ 12 bn(2009) World’s No. 1 in Patent Productivity (IMD) 300,000 R&D workforce Knowledge-based Economy • New Growth Engine Development Plan • (17 industries) (established in Jan. 2009) • to promote rapid green growth • R&D Expenditure • The plan will create value of • US$700 billion and • 3.5 million new jobs in • 10 years. * Research targets: all countries * The basic year: 2007 (most recent data available) * Source: IMD World Competitiveness Online ※Source: IMD World Competitiveness Online 11

  22. Continued…. • New Growth Engine Development Plan (17 industries) (established Jan. 2009) • The plan will create value of US$700 billion and 3.5 million new jobs in 10 years. Short Term 3~5 Year Mid Term 5~8 Year Long Term Over 10 Year • Alternative energy (wind, • waste conversion) • Broadcasting-Telecom • Convergence • ITConvergence • Global healthcare services • High-Tech green city • Alternative energy • (Ocean bio-fuel) • Low-emission energy • (CO₂capture& storage) • Robot applications • Materials & Nano-Tech • Biotech medicine & • medical devices • High temperature water • treatment • High value added food • Industry • LED applications • Global education service • Green financial service Application R&D Core-tech R&D Market Creation System Innovation Human Resource Development Source: Ministry of Knowledge Economy 12

  23. Opportunities in Korea for Foreign Venture Capital • Startups have an opportunity to launch novel technologies in Korea ahead of other markets • - WiBro, Interactive DMB Service, W-CDMA Infrastructure rollout and so on • - 5th largest patent filer in the world • - Korean technologies can further be harvested in global markets with strong cross-border • management capabilities • Demand potential from Korea-based multinationals • - Globally competitive value-chains • - Proven technologies but lack of international marketing • Korea’ s new growth vision: Green growth • - Korean government’s Green New Deal Plan: USD 36 billion investment in RE & EE • - Strong economic and industrial base for greentech industries: Solar energy, LED, secondary battery 13

  24. Invest KOREA, Providing a bridge for financial investors

  25. Invest Korea’s support for global financial investors Who We Are How We Can Help Invest KOREA, the national investment promotion agency, was established with the sole purpose of supporting the entry and successful establishment of foreign business into Korea, providing a one-stop shop from information and deal sourcing, right through to aftercare and grievance resolution. Proprietary Deal Sourcing Access to high profile mid-sized companies seeking growth capital. Partnering Support Regular international events introducing Korean GPs to global counterparts. Government Funds Information source on current & upcoming government matching, & fund of funds schemes. 15

  26. Korea Private Equity & Venture Capital Forum Date: November 2-3, 2010 Location: Grand Intercontinental Hotel, South Korea • Organizer: KOTRA – Invest KOREA, supported by Principles for Responsible Investment • Participants:Major Korean LPs and GPs, Global Financial and Strategic investors Topics on the Agenda: • Korea’s M&A Market and Opportunities • Investment Opportunities in Korea’s Clean Tech Industries and Companies • Alternative Asset Allocation & GP Selection Criteria of Korean Limited Partners • Korea's Venture Capital Industry & Opportunities • Investing in Korean Infrastructure • Beyond Thematic Investing—ESG Risk and Opportunity in all PE Investments One-on-one meetings will be pre-arranged with— • Investment seeking Korean companies from biotech, clean tech, and IT industries • Korean GPs & LPs seeking investment and co-investment opportunities 16

  27. Appendix1-The Trend of FDI in Korea The Asian Financial Crisis provided “strong motivation” to attract FDI “Total FDI for the decade since the Asian Financial Crisis (1998~2008) is5 times as much as that of 1962-1997.” 20.0 Notification basis (US $ billion) 17.5 • FDI from January to July 2009 jumped by 32.4 percent year on year to USD 6.8 bil., posting a record high since 2000. • In 2009, the total amount recorded US$11.48 billion. • The goal for 2010 is set to be 13 bil. 15.0 15.3 12.5 12.8 11.6 11.7 10.0 11.3 11.5 11.2 10.5 -1.9% 9.1 7.5 6.5 5.0 2.5 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 ※ Source : Ministry of Knowledge Economy 17

  28. Appendix2- FDI Trends in Korea (1998-2009) By Industry By Type (US$ million) (US$ million) Service 8,387 Greenfield 8,109 9,000 8,035 7,594 7,279 7,612 8,000 7,000 6,000 4,426 3,375 5,000 3,725 3,007 Manufacturing 4,000 M&A 2,692 2,483 3,000 2,000 Other 1,000 900 100 1998 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 0 By Country 1962-2009 (%) U.S.A. 26.05 Japan 14.88 10,000 7,000 6,000 Germany 5.59 Netherlands 11.77 5,000 4,000 3,000 UK 6.23 France 3.62 2,000 1,000 900 68.14 Total 100 0 31.86 Others ※ Source : Ministry of Knowledge Economy 18

  29. Appendix3- Trends of FDI in Korea – By Sector Which sectors are leading in attracting FDI • The number of projects between Jan. 2003 and Feb. 2010. Source: FDI Intelligence from Financial Times Ltd 19

  30. Thank you

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