Where unicorns don’t exist

Korea has made its mark on the world. K-pop has fans everywhere. K-beauty defines global trends in beauty and fashion. Korean electronics are used across the globe.

But a column by Bloomberg asks the pertinent question, “How Can the Land of K-pop Fail to Innovate?” It bemoans the fact that vitality and experimentation in Korea are being killed by red tape.

The country that leads in many areas has only made baby steps in innovation. There are no companies akin to Uber Technologies or Ant Financial, the fintech giant under Alibaba. Korea has a few unicorns, unlisted start-ups with valuation of more than $1 billion, but they are “baby-sized” compared to the multitudes of Chinese unicorns, according to the report. Korea is even behind Indonesia in its number of meaningful start-ups. In the innovation economy, Korea has been outstripped by Southeast Asian nations and China, not to mention advanced economies like the United States and Japan.

Ride-sharing services, which have become commonplace around the world from Manila to Paris, are hard to find in Seoul. Lee Jae-woong, head of Socar — responsible for the van-hailing service Tada — has been indicted for overstepping the legal boundaries that cocoon our traditional transportation system. The Bloomberg column pointed out that the indictment took place at a time when President Moon Jae-in was publicly emphasizing innovation at a high-profile event.

Bloomberg found it bewildering that Korea was dillydallying in removing red tape, which would go a long way for an economy battered by external woes such as the ongoing trade war between the United States and China and its own with Japan. It drew comparison with Indonesia’s car-hailing service Gojek, which has grown to become the country’s biggest employer. Tada’s case highlights Korean society’s resistance to new businesses and innovation.

It pointed out that the chaebol business model profiting from exclusive contracts cannot work in an era of a sharing economy. It advised Moon to set start-ups free from the cages of regulations and the chaebol supply chain. It is a pity the foreign media is more worried about the pitiful state of Korea’s start-ups than the government. Chang Byung-gyu, head of the Presidential Fourth Industrial Revolution Committee, lamented that the Moon administration “is not pro- or anti-corporate, but no-corporate.” The government is in serious need of an awakening.