McKinsey Asia Media Day: Insights into the Challenges Facing Asia
From left, Lareina Yee and Vinayak HV, senior partners at McKinsey & Company, talk with Clay Chandler, executive editor for Asia at Fortune, during a session of the McKinsey Asia Media Day at The Shilla Seoul hotel, Thursday. Courtesy of McKinsey & Company
Seoul’s Potential: Korea Set to Become Seventh-Largest Economy by 2040
Korea is projected to become the world’s seventh-largest economy by 2040, with a per capita gross domestic product expected to exceed $70,000, according to McKinsey & Company. During the recent McKinsey Asia Media Day held at The Shilla Seoul hotel, Song Seung-heon, managing partner at McKinsey Korea, shared the firm’s insights into Korea’s next economic growth model.
“Korea’s Next S-Curve” Strategy: Shifting Focus to High-Tech Industries
Under the presentation title “Korea’s Next S-Curve,” Song emphasized the need for Korea to prioritize high-tech industries such as semiconductors, biotechnology, and artificial intelligence (AI) to achieve a transition to a value-added economy. McKinsey recommended that Korea implement various major tasks, including industrial structure reform, business model reform, and the adoption of new technologies centered around original technology and AI.
Unlocking Korea’s Potential: Key Tasks for Economic Growth
By boldly implementing the suggested key tasks with a growth mindset, Korea has the potential to become the world’s seventh-largest economy by 2040 and achieve a per capita GDP of $70,000, Song highlighted during the session.
Song Seung-heon, managing partner of Korea at McKinsey & Company, speaks during his presentation at a session of the McKinsey Asia Media Day held at The Shilla Seoul hotel, Thursday. Korea Times photo by Anna J. Park
The Challenges Ahead for Asia
The McKinsey Asia Media Day event in Seoul covered a range of sessions led by consultants from around the world. These sessions focused on various topics, including generative AI, energy and green technology, and inclusive prosperity. However, the common theme across all sessions was the new challenges facing Asian countries.
Asia’s Position in a New Era
Asia has played a vital role in global economic growth, benefiting from globalization and digitization. Seong Jeong-min, a partner at McKinsey Global Institute (MGI), emphasized that the diverse and dynamic countries of Asia now have the opportunity to shape a new era. With Asia experiencing unique and intensified global challenges, Chris Bradley, a McKinsey senior partner and MGI director, highlighted Asia’s role as the furnace in which this new era is forged.
Seong Jeong-min, a partner at McKinsey Global Institute (MGI), speaks during his presentation at a session of the McKinsey Asia Media Day held at The Shilla Seoul hotel, Thursday. Courtesy of McKinsey & Company
Navigating the Challenging Period
The speakers at the event discussed strategies to navigate the challenging period facing Asian countries in domains such as world order, technology platforms, demographic forces, resource and energy systems, and capitalization. Important questions were raised, including the possibility of Asia reinventing itself as a technology creator rather than a manufacturing hub. The demographic challenges of aging populations and low fertility rates were also highlighted as major headwinds facing Asian economies.
Participants listen to a presentation during the McKinsey Asia Media Day held at The Shilla Seoul hotel, Thursday. Courtesy of McKinsey & Company
Addressing Demographic Challenges
Seong pointed out that the pace of aging in the region is rapid, particularly in Korea, which has the highest old age dependency ratio. Additionally, Korea’s fertility rate dropped to a record low of 0.78 in 2022, making it the lowest among OECD countries. The session highlighted the necessity of difficult policy options such as cross-border migration or workforce relocation to tackle labor mismatches resulting from demographic challenges.