interesting. Korea is a country that has seen staggering growth in the past 50 years. It has tremendous assets, ranking among world leaders in education and in industries from autos to shipbuilding to steel, consumer electronics, and smart phones, according to a presentation I was given by Woo Cheonsik, VP for Global Research Cooperation at leading think tank Korea Development Institute.
But it also faces formidable challenges. The growth rate peaked in the late 1980s and has been on a slow but pretty steady decline ever since, with the government’s briefing document projecting the decline in growth continuing past 2020. At the same time, government leaders, Woo, and others I met with cited a rising income disparity between those at the top and the rest of society, an aging population coupled with high youth unemployment, a shortage of global talent, and worries about a looming brain drain, with more Koreans educated abroad not returning home.
(Even Samsung’s success story is not without caveats: During some brief conversations about Samsung vs. Apple, I found the strong sentiment that while Samsung has risen to No. 1 in smartphones with some important process innovations, it falls short in blazing entirely new trails that will keep it on top for the long haul.)
All this, and more, factors into the Creative Economy initiative. So with that as a backdrop, here are a few more observations from the trip:
—The Creative Economy initiative is spearheaded by the Ministry of Science, ICT, and Future Planning, but it spans 21 ministries and seven business associations—making it one of the seminal efforts of Park’s administration, but of course also running the risk of making it highly bureaucratic. The closest parallels to it in the U.S. are probably the Strategy for American Innovation unveiled by President Obama in 2009 and the public-private Startup America Initiative launched in 2011, both of which were cited in the Korean briefing paper.
—The idea is for government to create the framework and be the coordinator, but then let business and the private sector take over. The plan includes funding for incubating ideas and startups, as well as for venture capital investments, paired with tax credits for M&A activities.
—Under Korean law, the president serves just one five-year term and cannot run for reelection—raising the stakes even higher to make progress quickly.
—Just as in the U.S., many in the opposition party are fiercely opposed to the Creative Economy initiative—not its goals, which seem to be universally shared, but the way it has been conceived and implemented. Sound familiar?
—President Park was elected in part through her background, her charisma, and her talent (which you can read more about in this New York Times article). But she also did something really interesting. She is from the conservative party in Korea (Saenuri, or New Frontier), which was called the Grand National Party until early 2012. She helped bring it back from a long period of disfavor and scandal not just through the name change, but by helping to move it to the left via some social welfare programs designed, as the New York Times put it, to “appeal to voters fed up with the nation’s jobless recovery after the global financial crisis.” I can’t help but wonder if the Republican party would win back the White House if it did something similar. (But what would the new name be?)
—Korea is strong in patenting and in some areas of research, but poor at commercializing research. The number of cases where research had been commercialized barely moved from 2008 (122 cases) to 2012 (132 cases), according to the government’s briefing document.
—The number of startups formed by professors or researchers plummeted, from 3,144 in 2004 to just 1,761 in 2009, according to the document. (Of course, that could be a direct result of the 2008-09 recession—and I haven’t compared it to U.S. figures).
—Only 10 percent of Korean PhD students in engineering want to start a business, compared to 22 percent of Americans (this figure is also from the government briefing).
—A website called Creative Economy Town was built to solicit innovative ideas or technologies (apparently it works much better than healthcare.gov), and then hopefully link those ideas to people who can provide mentorship and other assistance to make them reality. In her talk, President Park praised the fact that some 3,800 ideas had already been submitted, and said she was inspired by the creativity of those concepts. However, she expressed disappointment over how few of them had been commercialized.
—The event included an exhibition hall where scores, if not hundreds, of products and programs were on display. These included booths from government labs and large companies like Samsung, as well as 60 startups doing everything from fighting stroke to making parking apps to building a better golf club. My favorite was a display from the national Railroad Research Institute that showed a plan to replace canals with special railways for ships. In the model, ships were raised right out of the sea onto the railway. According to the person at the booth, this would be far more cost-effective than building and maintaining canals.
Korea has a long, long way to go with these efforts. As I was walking around the exhibition floor, I was pulled aside by a television reporter and asked what I thought of the Creative Economy’s chances of success. I told her there were so many variables, and my knowledge of the country so sparse, that I couldn’t possibly answer that.
But I also told her I could determine one thing for sure: it wasn’t going to happen if they didn’t try.
