The Change Process and Future Direction of Economic Cooperation between Korea and Japan: Focusing on the Analysis KJCF Projects
Authors:   The Korean-Japanese Economics & Management Association, Lee Hyung-Oh , Ahn Ji-Young , Kim Young-Mi 
Published: June 2023

Purpose: The purposes of this study are to identify the process of change in Korea-Japan economic cooperation through cooperation projects carried out by Korea-Japan Cooperation Foundation for Industry and Technology (KJCF) over the past 30 years, and to explore the future direction of Korea-Japan economic cooperation.
Research design, data, and methodology: This study analyzed the Korea-Japan cooperation projects that KJCF has implemented for 30 years from 1993 to 2022. It classified 819 annual projects of KJCF into three areas based on large classification, 14 project groups based on medium classification, and 187 individual projects based on sub-classification. The three areas of the large classification were Technology Cooperation, Infrastructure-forming Human Exchange, and Trade & Investment Cooperation and Others. This study divided 30 years into three stages: the first stage from 1993 to 2002, the second stage from 2003 to 2012, and the third stage from 2013 to 2022. Then, changes in the economic environment were examined in terms of trade, direct investment, human exchange, and manufacturing competitiveness.
Results: As a result of the analysis, it was found that the gap in manufacturing competitiveness between Korea and Japan began to be large, but gradually narrowed in the first and second stages, almost closing the gap in the third stage. Under these environmental changes, KJCF has implemented projects suitable for each stage, and the characteristics of the cooperative projects were defined as General-purpose Technology Adoption Type in the first stage, Application Technology Adoption Type in the second stage, and Adopted Technology Utilization Type in the third stage. In the first stage, there was a big difference in manufacturing competitiveness between Korea and Japan, so KJCF promoted projects that helped Korean companies adopt general-purpose technologies from Japan. Then, in the second stage, projects that helped Korean firms adopt application technology from Japan were executed, and in the third stage, projects where Korean companies could utilize the adopted technology were implemented with the manufacturing competitiveness gap almost disappeared. Furthermore, this changing pattern in KJCF projects was also confirmed in the medium classification analysis.
Implications: This study looked at the process of changing economic cooperation between Korea and Japan through KJCF projects implemented in response to given environment for each period. As a result, it can be said that those projects have contributed to improving the competitiveness of Korean companies. In fact, the competitiveness gap between Korea and Japan has been almost disappeared in the third stage, and this has important implications for the future direction of Korea-Japan economic cooperation. Accordingly, as to the future direction of economic cooperation between Korea and Japan, this study emphasized the need for reciprocal win-win type cooperation and further presented three points from the perspective of government policy and corporate strategy. First, policy support and corporate efforts are needed to revitalize Korea-Japan economic cooperation in new business areas such as IT, software, new energy, etc. Second, the governments need to help industry associations in two countries form foundation for business cooperation and companies need to cooperate each other under the assistance of those associations. Third, it was suggested that the governments need to provide communication infrastructure for Korean and Japanese companies to explore global markets through cooperation and that companies need to implement cooperative strategy for expansion to global markets.