Korea has potential to join G7: Hyundai Research Institute

[Photo by AFP / Yonhap]

South Korea, whose economy has expanded rapidly, has the potential to join the Group of Seven (G7), a study showed on Sunday.

According to a report released by the Hyundai Research Institute, Korea is judged to have the high potential to join the G7, which are advanced economies among developed countries, with its rapid economic growth.

Korea’s gross domestic product (GDP) stands at $1.7 trillion, which is near the GDPs of the United Kingdom, France, Italy, and Canada among the G7 members.

Korea’s GDP per capita also stands at $33,192 – above the $30,000 range seen in Japan and Italy.

The institute noted several positive factors for Korea‘s G7 aspirations, including its resilient economy, growth in the manufacturing sector, increasing investments in research and development, and high levels of human resources.

The manufacturing sector’s strong capital expenditure and R&D investment was highlighted as a key competitive advantage.

In 2021, the manufacturing sector’s added value accounted for 35.6 percent of Korea’s economy, which is higher than the G7 average of 23.7 percent.

Korea’s total R&D investment size surged to 112.6 trillion won ($81.4 billion) in 2022, up from 13.8 trillion won in 2000.

The report, however, also pointed out stepping stones that could hinder Korea joining the G7.

They include Korea’s weak productivity in the service industry, lack of preparedness for an AI-driven era, and demographic challenges such as low birthrates and an aging population.