Bank of Korea Releases First Knowledge Service Trade Statistics - $7.26 Billion Deficit Last Year

The BOK has newly developed and published knowledge service trade statistics as a supplementary statistic to the balance of payments for the first time.

On the 19th, the BOK announced through 'Results of Korea's Knowledge Service Trade Statistics Compilation (2010-2024)' that last year, Korea's knowledge service exports amounted to $36.82 billion, while imports were $44.08 billion, resulting in a total deficit of $7.26 billion.

By detailed type, there was a surplus in information and communication services ($2.76 billion) and cultural and leisure services ($870 million), while deficits were recorded in intellectual property rights usage fees (-$3.34 billion) and professional and business services (-$7.55 billion).

Since 2010, as the proportion of knowledge services in service trade has increased, exports have shown faster growth than imports, leading to a trend of narrowing deficits. In fact, the knowledge service trade balance deficit in 2010 was recorded at $12.77 billion.

By industry, the information and communication sector showed a surplus of $2.25 billion, while manufacturing (-$4.40 billion) and personal and other industries (-$2.84 billion) recorded deficits.

In the information and communication industry, exports of software copyrights and multimedia copyrights, including the content industry such as games and music, increased rapidly.

Moreover, the knowledge service trade in the manufacturing sector, which previously heavily relied on imports, has seen its deficit narrowing as exports grew rapidly.

By region, there was a surplus with Asia ($5.11 billion), while deficits were recorded with North America (-$5.73 billion) and Europe (-$2.85 billion).

By institutional type, mainly medium-sized enterprises showed a surplus ($1.82 billion), while large corporations (-$5.65 billion) and digital intermediary platforms (-$3.88 billion) recorded deficits.

The main surplus areas were software copyright exports in the information and communication industry and information provision and platform services from manufacturing companies, recording surpluses of $2.67 billion and $1.97 billion respectively.

The main deficit area was research and development services in the manufacturing sector, with a deficit of $4.51 billion. Other areas included advertising and PR services in the information and communication industry, and computer and mobile software in personal and other industries.

Looking at the ICT industry alone, last year's knowledge service exports in the ICT industry were $11.15 billion, while imports were $8.92 billion, resulting in a surplus of $2.23 billion.

In the case of the content industry, it recorded a surplus of $3.58 billion, centered on the game and music industries.

Intellectual property rights exports also showed a surplus of $1.38 billion, mainly in copyrights.

Meanwhile, the BOK has disclosed Korea's knowledge service trade status from 2010 to 2024 this time, and plans to publish quarterly data for the previous half-year every March and September in the future.

The BOK emphasized that with these knowledge service trade statistics, Korea has become the fourth country in the world to publish detailed service trade statistics, following the United States, the United Kingdom, and the European Union (EU).

Kim Sung-joon, head of the Balance of Payments Team, said, "Compared to existing intellectual property rights statistics, the characteristic is that the professional and business services sector has been newly added," adding, "We have newly classified and diversified classification types to meet policy needs."

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