South Korea’s per capita gross national income (GNI) has remained below the $40,000 threshold for 11 years since first surpassing the $30,000 mark in 2014, raising concerns about weak economic growth.
The country’s GNI per capita stood at $36,624 in 2024, according to the Bank of Korea on Mar. 5. Korea’s GNI per capita rose from $28,827 in 2013 to $30,000 in 2014 and then peaked at $37,898 in 2021 before falling back to the $35,000 range in 2022. Korea’s per capita GNI briefly surpassed Italy’s in 2020, when the European nation’s economy contracted 9% during the pandemic. But it has since hovered around $36,000.
GNI is the dollar value of the total income earned by residents of a country each year. GNI per capita, which is calculated by dividing the country’s GNI by its population, is a key indicator of a country’s general standard of living.
Excluding Middle Eastern countries rich in oil, only 10 countries with populations exceeding 10 million have crossed the $40,000 mark: the UK, Germany, France, Sweden, the Netherlands, Belgium, the U.S., Canada, Japan, and Australia. On average, these countries took 4.9 years to move from $30,000 to $40,000. Korea has been stuck in the $30,000 range for 11 years.
While the strong U.S. dollar has affected the dollar-denominated GNI, many experts point to deeper structural issues, such as sluggish innovation and inadequate economic reforms, as key barriers to further growth.
The United States reached a per capita income of over $30,000 in 1997 and broke the $40,000 mark seven years later in 2004. In 2023, it became the first country to surpass $80,000 per capita. The driving force behind U.S. growth is innovation and dynamism in the private sector.
The U.S. stock market has been bolstered by seven tech giants collectively known as the “Magnificent Seven”—Apple (founded in 1976), Nvidia (1993), Meta (2004), Alphabet (1998), Microsoft (1975), Amazon (1994), and Tesla (2003)—all relatively young companies with an average age of 33 years.
The UK took two years to move from $20,000 to $40,000. The leap was driven by a successful transition from manufacturing to high-value service industries. As traditional factory jobs declined, the country generated an equivalent number of new jobs in finance, law, and consulting. London has remained Europe’s financial hub and continues to lead in knowledge-based service industries such as law and consulting.
Germany’s path was more turbulent. After reaching the $30,000 mark in 1995, the country’s per capita GNI dropped back to the low $20,000s within two years. After reunification in 1990, rising unemployment and fiscal deficits pushed Germany’s per capita GNI down to $23,000 by 2001. To reverse the decline, the German government introduced Agenda 2010, a sweeping set of structural reforms. These changes, spearheaded by left-leaning Chancellor Gerhard Schröder, included flexible labor contracts, reductions in unemployment benefits, cuts to long-term welfare assistance, and lower corporate tax rates. The reforms proved effective—Germany’s GNI per capita rebounded to the $30,000 range in 2003 and surpassed $40,000 by 2007.
Japan became the first country with over 50 million people to break both the $30,000 and $40,000 barriers, achieving the feat in just two years between 1992 and 1994. However, the country then fell into three decades of stagnation. After briefly reaching the $50,000 mark, Japan’s per capita income retreated to the $30,000 range as the economy struggled with slow growth, an aging workforce, and a lack of innovation.
In 2013, six Japanese firms, including Toyota, Sony, Honda, SoftBank Group, Fast Retailing, and Nissan Motor, made Boston Consulting Group’s list of the world’s 50 most innovative companies. By 2020, that number had fallen to just three: Sony, Hitachi, and Toyota.
Japanese companies were slow to adapt to shifting global trends, while heavy government regulations stifled growth. Le Figaro once described the Japanese economy as “an airplane flying without a pilot,” citing an aging workforce and risk-averse politicians. South Korea now faces a similar challenge.
