South Korean companies, long known for their world-class technological innovations and manufacturing prowess, are not limited to South Korea’s borders for future growth. Korean firms are increasingly looking to the U.S. to fuel expansion and hire new workers.
South Korea is a large source of FDI in the U.S., ranking 14th of all countries in total funds invested, according to U.S. Department of Commerce data. These investments support more than 45,000 American jobs, more than $24.8 billion in U.S. exports, and $1.3 billion in local innovative research and development spending.
Hankook Tires is one Korean company that is betting on the U.S. In April of this year, Hankook announced it is building its North American HQ in Nashville, Tenn., and beginning production at its $800 million tire manufacturing plant in Clarksville. When it is fully operational, the plant expects to employ almost 1,800 people.
Murat Arik, director of Middle Tennessee State University's Business and Economic Research Center, told Nashville’s Tennessean that the move is “strengthening the supply chain in auto manufacturing in Middle Tennessee” and that “this will actually make the region a strong hub of the advance manufacturing” sector. (You can read more about Hankook’s move here.)
It’s not just Hankook Tires and Tennessee who win when Korean companies locate here. For instance, Korean U.S. FDI is mostly in manufacturing. Many of these assets are large plants that employ thousands of U.S. workers, like Hyundai’s facility in Montgomery, Ala., and Kia’s plant in West Point, Ga., which collectively give more than 8,000 workers paychecks.
Korean FDI is not just visible—it is also growing very rapidly. According to the Asian Institute for Policy Studies, South Korean FDI has grown 700% in the last decade. SelectUSA, the FDI attraction agency of the U.S. federal government, ranked South Korea as the 5th fastest-growing source of FDI in the United States since 2010. In 2015, South Korean investors had more than $38 billion inside of the U.S., a 17.3% increase compared to 2010.
America is primed for growth in U.S. FDI from South Korea, and many Korean firms are recognizing the opportunity. It seems like the basis for a beautiful relationship.