Since he took office in January 2019, Jacopo Giuman is the new Secretary General of the Italian Chamber of Commerce in Korea. Before accepting this position, he worked for a long time in the fashion industry as owner of his own fashion agency and, for almost three years, as Sogno Factory’s export manager in Seoul.
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Investorvisa.it: You have just become Secretary General of the Italian Chamber of Commerce in Korea. How was your impact with this new reality?
Giuman: The Italian Chamber of Commerce in Korea is an organization that has been working for years to establish and maintain commercial relations between South Korea and Italy, two major nations with an established role in the world of international trade. Consequently, taking responsibility for this important and prestigious task led me to interact not only with new business realities but also with the Korean social and cultural framework that is intertwined with and influences the import-export activity. Counting on a strong synergy between the Korean and the Italian staff, our institution plays, above all, a fundamental role in commercial affairs, but also contributes to the cultural relations between the two countries. This puts further emphasis on the concept of “Made in Italy” as a synonym of quality, creativity, and excellence that still today stands out in the manufacturing sector abroad.
Looking to the future, what are the Chamber’s most of the successful activities that you deem meritorious of further attention? In what direction do you think that the action of the Chamber will develop?
Among the most successful activities organized by the Italian Chamber of Commerce in Korea, there are certainly the monthly networking events held in various Italian restaurants in Korea holding the “Italian Hospitality” certification. In addition, the Chamber organizes entrepreneurial delegations to Korea, bringing Italian excellence in contact with the local market through B2B meetings, with a focus on the main “Made in Italy” export sectors, such as food, fashion, and industrial supplies. At the same time, the Chamber, at the request of the special companies of the Italian Chambers of Commerce aiming at the internationalization of businesses, selects and invites Korean trade operators from various sectors to participate in business delegations to Italy. Starting this year and for the whole of 2020, the Italian Chamber of Commerce in Korea will be involved in the “True Italian Taste” project, promoted and financed by the Ministry of Economic Development. Its objectives are to enhance Italian production, increase the consumer’s awareness of authentic Italian products over the “Italian sounding” ones and help companies to better position themselves on target markets, assisting them in improving their visibility. Therefore, the objectives of these and of the Chamber’s other activities are twofold: on the one hand, they aim at promoting new commercial relations and consolidating those already there, on the other they try to expand the Korean market share of those industries in which Italy excels.
The commercial exchange between Italy and South Korea last year recorded a sharp recovery, reaching a total of about 10 billion dollars, but traditionally bilateral investments between the two countries are not very developed. The main operations from Korea to Italy are embodied by the acquisition of large industries by Korean conglomerates and by joint ventures to be exploited on other markets. What chances are there for Italy to be able to present itself as an attractive market in industrial segments and sectors that are now scarcely considered?
According to A.T. Kearney FDI Confidence Index, in 2018 Italy once again entered the world top ten for the attractiveness of Foreign Direct Investments (something that has not happened since 2004). The implementation of the “Industry 4.0” plan is, according to the American consulting firm contributing the most to this positive evolution of our country’s international image. International observers consider this policy as having a strong effect on the historical problems afflicting the Italian economic system (energy supplying, business fragmentation, and extreme bureaucracy). Likewise, the strong domestic and foreign demand for Italian products and an unemployment rate at a five-year low are cited among the reasons for the investors’ interest. In contrast, the publication highlights how both the political instability and, even more so, the low growth estimate of our economy may act as stop factors. Based on this positive climate, bilateral relations between Italy and South Korea are evolving a lot in recent times. Last December a mission brought the Under-Secretary of State for Economic Development, Michele Geraci, to Seoul. The visit focused on the definition of plans to implement the “strategic partnership” between the two countries. Among these plans, it is interesting to mention the interest of the Korean Deputy Minister for Small and Medium Enterprises, Choi Sugyu, in the model of Italian “industrial districts”. This aggregative organization could be the most interesting solution to maintain the entrepreneurial spirit characterizing the Italian industry and, at the same time, make our economy increasingly interesting for foreign investors.
The European Union and Korea have signed one of the first wide-ranging trade treaties negotiated by the Union. After almost a decade, what effect did the agreement have on the Italo-Korean economic relations? Can Rome thus represent a gateway to the wider Common Market?
As I already mentioned, the diplomatic and economic relations between Italy and Korea are going through a phase of open and favourable development, above all thanks to the signing of commercial agreements to increasingly connect the two nations and to the desire to create joint projects for the development of international markets. Italy is the European Union’s second largest exporter to South Korea and one of the most interesting markets for Korean entrepreneurs. This position of strength, when combined with the currently developing ties, is bringing Korean businesses to consider Italy as a key player for the development of European trade.
What can Korea offer to Italy in terms of industrial partnerships? Given that the Korean economy is strongly characterized by chaebol, we must necessarily turn to those, or there is an entrepreneurial “middle class” with the ability and willingness to internationalize their companies?
There is absolutely a group of Korean small-medium businesses growing in importance in the Korean economy, and it is with them that the Chamber interacts for the development of relations with Italy. Our work to support internationalization, in fact, steers quite clear from large conglomerates, which are global companies that do not need support organizations. In Korea, SMEs account for 88% of the workforce and yield 51% of the value added produced in the country. They make up almost 40% of the total value of exports, a figure constantly growing over the years. This means that South Korea is less and less the country of chaebol and more and more a complex reality, which includes a multitude of micro/small/medium enterprises active in international markets.
Seoul was one of the legs of the “Invest in Italy” roadshow, dedicated to presenting the Italian business climate and investment opportunities in our country. From the Chamber’s point of view, can similar initiatives have a positive impact on your business and on the image of Italy as a destination for foreign capital?
Events such as the roadshow are essential to improve Korean operators’ awareness of the Italian economic reality. A greater understanding of the market dynamics of our country and a presentation of its main points of interest for foreign investors certainly represent a big boost both for the activity of the Chamber, which can exploit the opportunity of a favourable trade environment and for our country’s attractiveness to foreign investments.
Many of the Chamber’s initiatives focus on the appeal of Italian culture, such as food and wine. Can this nation-branding process increase Korean awareness of the existence of small and medium-sized Italian companies, often dedicated to the production of niche excellences, in which to invest?
All Italian production is characterized by very distinctive values, a component directly deriving from Italian culture. Precisely for this reason, our activities are not based on exploiting, with the aim of bewitching the Koreans, Italian cultural elements by “advertising”: on the contrary, they are a fundamental part of our products’ typical narrative. The narrative and the experience of “being Italian” must be fundamental for all those who want to work in the development of the Italian market abroad and “national branding” can be an excellent common tool to give uniqueness and coherence to this collective communication. Thanks to the discovery of the whole world of values and traditions behind a product, it is possible to convey the motivation of a certain positioning, even of price, and the importance of protecting and developing small excellences with immense intrinsic value.
Beyond the obvious economic implications, is it realistic to think that we can rely on Korean entrepreneurs to introduce capital into the cultural industry of our country, perhaps thanks to philanthropic donations?
South Korea has the largest number of private museums in the world. Over 45 were present in 2015, and most of them are supported by the funding from the top management of groups such as Samsung, LG or Hyundai. This record derives from the high interest of the Korean establishment in the arts and from the fact that it has evolved in a desire to share this passion with the public. Given these premises, it is very realistic to think that it is precisely among the ranks of these enthusiasts that it is necessary to look for possible investments in the national cultural industry, an operation that many internationally renowned art dealers are already carrying out on a smaller scale by opening outposts in Korea.
A special visa is reserved exactly for non-EU citizens who make donations towards the preservation of cultural heritage, as well as for those of them who invest in Italian companies. The Korean entrepreneur who wishes to apply for it must invest at least 500,000 euros (in a start-up) or one million euros (in a company), or donate at least one million euros. Can this measure, in your opinion, represent an incentive for Koreans to invest in the country?
Surely the use of Italy’s characteristic appeal to attract foreign investments (remember that FDIs in our country, as a percentage of GDP, are half of what they are in France, Germany, United Kingdom or Spain) could be a winning choice. In particular, this may be true for Korea, where Italian charm also affects the highest social classes. Moreover, we must not forget what I said before on Koreans’ passion for art and how much our country can offer to them. All this certainly represents a very important opportunity, which however needs a greater work of mutual knowledge between these two populaces.
The subsidized tax regime (100,000 euros per year) for those who transfer their tax residence in Italy is also a policy designed to gain the attention of the global business community. Given how Korean companies are structured and the current tax regime can a measure like the Italian one attract Korean businessmen?
Taxation on income in Korea is certainly advantageous, so the facilitation proposed by Italy can appeal only to a very small part of heavy earners. That said, the Korean social structure, with at its summit great entrepreneurs, and the legislative apparatus emerging from it could hardly allow, in my opinion, an operation of this kind. It should be noted that the Korean legislation, despite its efforts to open up to foreigners, still tends to be rather reluctant to liberalize such behaviours, while keeping, instead, a close watch on the income perceived inside and outside the national borders, a fact also highlighted in the last tax reform.