□ The Korean Foundation for International Cultural Exchange (KOFICE, president Kim Yong-rak) published the 2018 Study on Ripple Effects of Hallyu, a comprehensive report on the results of last year’s public research contest investigating the impact of Hallyu. This research report aims to provide an in-depth analysis on the status of Hallyu through quantitative and qualitative research on topics such as “the economic impact of Hallyu,” “the noneconomic value of Hallyu,” and “Hallyu as a tool for strengthening Korea’s soft power,” as well as to estimate future prospects.

□ Based on a survey of 7,500 Hallyu content users in 16 countries and the export data of 16 industry sectors, the 2018 Study on Ripple Effects of Hallyu quantifies the effects of Hallyu from multiple angles in terms of indexes such as the “Hallyu index,” the “Hallyu export effect,” and the “impact on national economy.” The “Hallyu index” estimates the degree of Hallyu diffusion by country based on the level of popularization of Hallyu and its potential growth. An analysis shows that in most countries, Hallyu is in the “proliferation” stage in terms of popularization. In terms of potential growth, Hallyu is in the “high-growth” stage in Malaysia, Indonesia, Russia, and India, while marking a “decline” in Japan, and at the “mid-growth” stage in the remaining countries.

                                                 Table 1. Comparison of the ‘Hallyu index’ by country 2017–2018

□ This report also analyzes the impact of Hallyu on the Korean economy, observing export amounts in eight cultural content sectors including TV programs and music, and eight consumer goods and tourism sectors including foodstuffs, cosmetics, and tourism. In 2018, exports attributed to Hallyu increased by 9.1% compared to the previous year, amounting to USD 9.48 billion. The export of cultural content surged 22.8%, leading overall exports at USD 4.42 billion. On the contrary, exports of consumer goods and tourism decreased by 0.5% to USD 5.05 billion. In terms of individual sectors, game (USD 3.06 billion), music (USD 430 million.), and TV program (USD 410 million) sectors had the highest amounts of export, and in the consumer goods and tourism category, tourism (USD 1.52 billion), cosmetics (USD 1.01 billion), and foodstuffs (USD 770 million) had the highest levels of exports.
* Changes in export amounts due to Hallyu: USD 6.92 billion (2014) → USD 7.11 billion (2015) → USD 7.69 billion (2016) → USD 8.21 billion (2017) ⟶ USD 9.48 billion (2018)

□ The impact of Hallyu-derived exports on the Korean economy in 2018 could be summarized as approximately KRW 19.78 trillion (4.4% ↑compared to 2017) in production inducement effect, KRW 7.83 trillion (7.9% ↑compared to 2017) in added value inducement effect, and 142,367 hires (5.9% ↑ compared to 2017) in employment inducement effect.

□ “Analysis of the Noneconomic Value of Hallyu” investigates the noneconomic value of Hallyu, and more specifically K-pop, by analyzing characteristics unique to the communication between BTS and ARMY. This analysis discusses the social, cultural, and diplomatic influence of the messages sent by BTS, their practical actions, and their interaction with ARMY as noneconomic impacts. “Research on Measures to Strengthen Korea’s Soft Power through Hallyu” provides baseline data for an analysis of the relationship between the achievements of Hallyu and Korea’s soft power, while also proposing ideas on how to strengthen that power through Hallyu.

□ KOFICE president Kim Yong-rak notes, “Spreading across the globe on the strength of the BTS and OTT phenomena, Hallyu is currently creating various economic and noneconomic ripple effects. I hope this research report will contribute to this growth, and moreover, the continuation of Hallyu.”

□ The 2018 Study on Ripple Effects of Hallyu can be downloaded from the KOFICE website (www.kofice.or.kr) in PDF format.