SEOUL, Aug 22 (Reuters) – South Korea is increasingly turning to its cultural sector as a driver of economic expansion, with entertainment firms expanding globally amid rising trade barriers for traditional manufacturers in the nation’s $696.2 billion goods export industry. n nBacked by strong government backing and global recognition from recent triumphs such as the Oscar-winning film “Parasite”, the hit series “Squid Game”, and the international fame of boyband BTS, the cultural wave known as Hallyu is gaining momentum. Despite rapid growth, the contribution of creative industries to GDP remains modest compared to manufacturing. n nExecutives from leading production houses told Reuters that India, Latin America, and the Middle East represent promising frontiers for Korean entertainment content. The country is holding auditions in Latin America for a new global boyband, following the U.S. debut of KATSEYE, a multinational girl group formed with members from four nations. n nLee, a cultural policy advocate, suggested broadening the definition of Hallyu to include content produced abroad by Korean firms or foreign ventures funded by South Korean capital. n nStill, cultural products are not expected to displace manufacturing as the backbone of exports anytime soon. Intellectual property exports—including music, films, and video games—surged more than threefold over the past decade, reaching $9.85 billion in 2024. Yet this figure pales in comparison to goods exports, which climbed 13% to $696.2 billion, according to central bank data. n nSean Cho, executive vice president of a major entertainment firm’s global division, highlighted the long-term potential of the Middle East, where younger audiences show strong affinity for Korean pop culture. In established markets like Japan, Southeast Asia, and the U.S., partnerships with platforms such as Amazon Prime Video are enabling co-productions that blend Korean storytelling with local themes. n nThe gaming sector, responsible for over half of the nation’s IP exports and highlighted by Krafton’s acclaimed title “PUBG: Battlegrounds”, sees India as a key emerging market, despite its current size being only one-tenth of South Korea’s. n n”India’s gaming landscape is still nascent relative to developed economies,” said Sean Hyunil Sohn, CEO of Krafton India, noting plans to introduce diverse game genres to tap into unmet demand. n nPresident Lee Jae Myung, who assumed office on June 4, has set a vision to elevate South Korea into the ranks of the world’s top five soft powers. The goal is to grow the cultural market to 300 trillion won and boost exports to 50 trillion won ($36 billion) by 2030. n n”We can’t rely solely on private enterprises,” Lee stated during a public forum with K-pop influencers and artists. “The state must build a solid foundation, and that effort begins now.” n nThe administration’s strategy focuses on five core areas—music, dramas, webtoons, beauty, and cuisine—as pillars for repositioning the country as a cultural leader. n nHowever, industry experts caution that rising production expenses, declining ad revenue, weak theatrical performance, and technological shifts—including the rise of AI—are posing challenges. n nAccording to a May report by the Bank of Korea, media content exports in 2022 supported 13,000 jobs, more than triple the 4,000 recorded in 2020. These roles tend to attract young, skilled, and well-educated professionals. In contrast, employment linked to goods exports grew at a slower 9.9% rate but still supports over 3.4 million workers. n n”Cultural strategy has long been treated as a secondary tool for foreign and industrial policy,” said Ko Sam-seog, a former senior official at the Korea Communications Commission. “Moving forward, it must become the leading force shaping other sectors.” n nData from the World Bank shows that South Korea’s services sector accounts for 58% of GDP, trailing behind Japan and Germany, where services make up 70% and 64% respectively, and below most advanced economies. n n($1=1,397.4300 won) n
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South Korea turns to culture in search of next fillip for growth
SEOUL, Aug 22 (Reuters) – South Korean entertainment companies riding the Korean Wave, or Hallyu, are scrambling to widen their global reach as Asia ‘s fourth-largest economy bets on cultural exports at a time of growing protectionist barriers for traditional manufacturers. n nAlthough growing fast from a low base, thanks to substantial government support and high visibility on the world stage with some recent dramatic successes, the industry ‘s contribution to the economy is still only a fraction of that of manufacturing. n nSign up here. n nThe home of industry giants Samsung and Hyundai is basking in the success of boyband BTS, Oscar-winning film “Parasite”, the television show “Squid Game”, the novel “The Vegetarian”, whose author Han Kang won the Nobel literature prize in 2024, and, most recently, the musical “Maybe Happy Ending”. n nIndia, Latin America and the Middle East, in particular, are promising new markets for Korean cultural products that have proved global hits, executives of major production firms told Reuters in interviews. n nThe agency is also running auditions in Latin America to launch another boyband, following last year ‘s U.S. debut of girl group KATSEYE, whose six members hail from four countries. n n”It is time to reexamine the definition of Hallyu,” Lee said. “If content is created abroad but produced by a Korean company, or even by an overseas entity backed by Korea capital, I believe it should still be considered part of Hallyu.” n nStill, it is unlikely that cultural exports will replace regular manufacturing anytime soon. n nSouth Korea ‘s exports of intellectual property (IP), from music and movie to games, more than tripled over the last decade to $9.85 billion in 2024, yet form just a fraction of goods exports, which rose 13% to stand at $696.2 billion, central bank data shows. n n”In the case of the Middle East, we see it as a market that is promising in the long term, because the popularity of Hallyu is high among the younger generation,” said Sean Cho, executive vice president of the global business division. n nIn the major markets of Japan, Southeast Asia and the United States, the company is widening partnerships, most recently with Amazon Prime Video, to deliver joint productions melding Korean elements with local culture, Cho added. n nFor the game industry, a cash cow that accounts for more than half of South Korea ‘s IP exports and is famed for Krafton ‘s accolade-winning “PUBG: Battlegrounds”, India promises to be the next growth market, though it is just a tenth of South Korea ‘s. n n”India ‘s game market is still at the early stage compared with other advanced countries,” said Sean Hyunil Sohn, CEO of game publisher Krafton India, which plans to exploit the potential for growth by adding new genres and types of games. n nA ‘BIG-FIVE ‘ SOFT POWER n nPresident Lee Jae Myung, who took office on June 4, has pledged support and investment to make South Korea a “big-five soft power”, aiming to grow the market to 300 trillion won in value and exports to 50 trillion won ($36 billion) by 2030. n n”But we can ‘t just leave it up to individual companies,” Lee told a recent talk show with Maggie Kang, director of KPop Demon Hunters, and K-Pop artists. “The government will play the role of laying a strong foundation and it starts now.” n nThe “big five” refers to the categories of music, dramas, webtoons, beauty products and food that are key elements in Lee ‘s efforts to rebrand South Korea as a cultural power. n nIndustry leaders warned that the cultural sector faces rising production costs, weak box-office returns and falling advertising revenue while grappling with changes in streaming services and video use, as well as the threat from AI. n nRising exports of media content were fuelled by the work of 13,000 people in 2022, more than triple the 2020 figure of 4,000, with most such jobs attractive to young, highly-educated and skilled workers, the Bank of Korea said in a report in May. n nJobs created by goods exports grew at a slower rate of 9.9%, although they still accounted for vastly more of the job force, at more than 3.4 million. n n”Cultural policy has been regarded as a subsidiary tool for foreign, economic and industrial policies, but going forward, it will have to be the key policy leading other sectors,” said Ko Sam-seog, a former senior official of the Korea Communications Commission. n nSouth Korea ‘s services sector makes up 58% of gross domestic product, lower than manufacturing-oriented peers Japan and Germany at 70% and 64% each, and most other advanced economies, World Bank data shows. n n($1=1,397.4300 won) n nReporting by Jihoon Lee; Editing by Clarence Fernandez