17.3 Sectors in South Korea that make up South Korea’s Bioeconomy
Agriculture in South Korea
Agriculture plays a pivotal role in South Korea’s economy, encompassing various activities such as farming, animal husbandry, forestry, and fishing. At its inception, South Korea was a quintessential agricultural nation, with over 80% of its population engaged in agricultural endeavors. However, as urbanization and industrialization have progressed, the country’s self-sufficiency in food production has been diminishing, largely due to the continuous reduction in available arable land.
In 2011, the extent of rice fields in South Korea covered approximately 854,000 hectares, representing 50.3% of the total cultivated land area. Fast forward to 2019, and a substantial 29% decrease in farmland was observed, primarily driven by industrial and residential development encroaching upon agricultural lands. As of 2022, South Korea’s agricultural land area has expanded to 1.698 million hectares, constituting 17% of the nation’s total land area. A significant portion of this arable land is allocated to paddy fields, primarily dedicated to rice cultivation, underlining the continued importance of agriculture in South Korea’s economy.
Biotechnology and Pharmaceutical sector
In 2018, the Korean pharmaceutical market achieved a significant milestone by surpassing the $21 billion mark. This remarkable growth can be largely attributed to prominent South Korean pharmaceutical companies, which have made global strides by introducing new drugs and expanding their technological exports. Notably, the aggregated sales revenue of the 125 publicly listed pharmaceutical companies for 2018 reached a total of $18,172 million, marking a substantial 7.5% increase compared to the previous year. Within this sector, the top 10 companies generated a combined revenue of $7,814 million, reflecting an impressive 8.6% growth. To provide a snapshot of the leading pharmaceutical companies in South Korea, their sales revenue in 2018 based on consolidated financial statements is as follows:
Yuhan Corporation: $1,362 million
Korea Kolmar: $1,181 million
GC Green Cross: $1,181 million
Guangdong Pharmaceutical: $1,090 million
Daewoong Pharmaceutical: $908 million
Hanmi Pharm: $908 million
Additionally, South Korea boasts a presence on the global pharmaceutical stage, with 4 domestic companies securing positions among the top one hundred and fifty pharmaceutical companies in the world based on sales of prescription drugs in 2018. These companies, their global rankings, and sales figures are as follows
Daewoong Pharmaceutical (111th, $844 million)
Hanmi Pharmaceutical (119th, $773 million)
Yuhan Corporation (122nd, $762 million)
Green Cross (139th, $563 million)
Furthermore, the Korean biologics market is valued at approximately $2,026 million as of 2018, representing 10.2% of the entire pharmaceutical market. While this proportion is lower than the global average of 28.2% for the same year, the Korean biologics sector exhibits substantial growth potential. Over the past 5 years (2014-2018), both production and export values have experienced remarkable expansion, with compound annual growth rates (CAGRs) of 4.3% and 4.6%, respectively. Notably, the biopharmaceutical trade balance has remained in surplus for four consecutive years since 2015, primarily driven by increased exports. A noteworthy development in this sector is the emergence of biosimilars, which are poised to become a next-generation growth engine. Among the twenty drugs approved in Korea, fifteen were developed by Korean pharmaceutical companies. South Korea’s dedication to the biopharmaceutical industry is underscored by the establishment of the world’s largest biopharmaceutical production facility, featuring a production capacity of 560,000 liters and involving the participation of more than 70 companies. This facility, with a particular focus on companies such as Samsung Biologics and Celltrion, is poised to make significant contributions to the biopharmaceutical sector.
The biotechnology and pharmaceutical sector in South Korea encompasses a wide range of activities related to the development and production of biopharmaceuticals, drugs, medical devices, and other healthcare products. It plays a critical role in improving public health, driving economic growth, and contributing to the nation’s global competitiveness. South Korea places a significant emphasis on research and development (R&D) within this sector. Both the public and private sectors invest heavily in cutting-edge biotechnological research. Numerous research institutions, universities, and companies are engaged in projects aimed at discovering and developing new drugs, therapies, and medical technologies. South Korea has a well-developed pharmaceutical manufacturing infrastructure. The country produces a wide range of pharmaceutical products, including generic drugs, biologics, vaccines, and medical devices. The manufacturing facilities in South Korea adhere to stringent quality and safety standards, making them internationally competitive. South Korea is gaining recognition for its prowess in producing biologics and biosimilars. Several South Korean pharmaceutical companies have successfully developed and marketed biosimilar drugs, offering affordable alternatives to expensive biologic medicines. The South Korean government actively supports the biotechnology and pharmaceutical sector through various policies, incentives, and funding programs. The Ministry of Health and Welfare, the Ministry of Science and ICT, and the Ministry of Trade, Industry, and Energy are among the key government bodies involved in promoting and regulating the industry. Collaboration with international pharmaceutical companies and research institutions is common in South Korea. These partnerships aim to accelerate the development of new drugs and technologies. South Korean companies are also involved in global clinical trials and licensing agreements. South Korea maintains a robust regulatory framework to ensure the safety and efficacy of pharmaceuticals and medical devices. The Korea Food and Drug Administration (KFDA) oversees the approval and regulation of healthcare products. South Korea’s biotechnology and pharmaceutical sector has experienced impressive growth in recent years, both domestically and in international markets. The industry’s expansion is attributed to an aging population, increased healthcare spending, and a rising demand for innovative therapies. Despite its growth, the sector faces challenges related to the long and costly drug development process, market access, and competition. It is essential for South Korean companies to continue innovating and navigating global regulatory complexities. South Korea’s biotechnology and pharmaceutical sector is making a significant impact globally. Its products and technologies are exported to various countries, contributing to the nation’s economy and reinforcing its position as a vital player in the global healthcare industry (lim, 2021).
Renewable Energy and Green Technologies sector: Around 87% of South Korea’s total greenhouse gas emissions in 2021 were attributed to the energy sector. Within this sector, power generation and heating constituted 37% of the emissions. It’s worth noting that while coal-fired power generation has been declining, liquefied natural gas and renewable energy sources have been on the rise. As a result, power generation increased by 4.5% year-over-year, and emissions per megawatt hour decreased from 0.395 to 0.385 tons in 2021 compared to 2020, showcasing the potential for reduced emissions through cleaner energy sources. The increasing concerns about global warming and environmental sustainability have emphasized the significance of renewable energy. The depletion of fossil fuels and the associated environmental consequences have accelerated the global shift towards sustainable energy sources. Renewable energy offers advantages such as reduced reliance on traditional energy sources and long-term benefits for the global economy. Although South Korea’s economic success is well-recognized, the nation’s ability to develop its economy sustainably has become increasingly vital. The trade-off between economic growth and environmental damage influences decisions regarding environmental sustainability and development. Economic growth provides opportunities to replace older, more polluting technologies with eco-friendly alternatives, thereby improving environmental quality. Various factors, including changes in product composition, the adoption of cleaner manufacturing technologies, stricter environmental regulations, and increased public awareness of environmental issues, can help decouple economic growth from environmental degradation. One important measure to reduce and eliminate carbon emissions is green financing. Green finance plays a crucial role in promoting economic decarbonization by driving economic growth, encouraging technological innovation, supporting industrial upgrades, and facilitating the transition to renewable energy sources (Raihan, 2023).