[Outlook]World’s best? Not yet

Advanced countries have strategic industries that are the world’s best. Those countries include Luxembourg, which has the world’s highest national per capita income; Switzerland, which is the most competitive country in the world, and the United States, the world’s superpower. Meanwhile, Uganda, where children make up more than half of the population and Chad, where 75 percent of its people cannot read and write, have no such industries.
What strategic industries does Korea have? One of the most important is the defense industry because Korea is surrounded by four strong countries, and South and North Korea are technically still at war. South Korea’s defense industry is quite advanced so it can be fostered to become an exporting industry. Like Switzerland or Singapore, situated between strong countries, defense and security are very important in Korea.
We are living in an era of economic battles, so we need to strategically foster our financial industry. Korea’s manufacturing industry has advanced to compete with the world’s best countries, but its financial industry is still an underdog. So, much money goes to foreigners. Banks in particular in Korea are not doing well.
On Fortune magazine’s list of the world’s 500 top companies, 60 are banks. Among these banks, Korea has only one, Kookmin Bank, ranking 46th. If Korea clings to its principle of separating industrial capital and financial capital, foreigners can control Korea’s financial capital or institutions at will. We need to strengthen the financial industry so that foreign investors cannot take control of the Korean stock market.
The battle for capital is becoming increasingly fierce. For instance, in Singapore and China, the state runs their public investment companies directly. American economist Frederic Mishkin said the third phase of globalization is globalization in the financial sector. To prepare for that, we need to develop our financial industry.
We are living in a knowledge-based era. As Peter Drucker, the founder of management studies, said, universities and think tanks are at the center of a knowledge-based society. But Korea’s universities have to spend excessive energy on administrative work relating to university entrance exams.
The world’s top three shipbuilders are Korean companies. If three of Korea’s universities become the world’s top three, Korea would nurture future world leaders. The government must abolish regulations on university education and instead work hard to foster top-class universities. This is the right way to become a leading country in the world. The United States is known for having the world’s best think thanks. Switzerland has the International Institute for Management Development and the World Economic Forum, the world’s two best research institutes for global competitiveness. Meanwhile, in Korea many think thanks in the private sector have disappeared as many conglomerates have been dissolved since the financial crisis.
It is still difficult for conglomerates to foster think thanks due to regulations on investment and anti-jaebol sentiments in general. Public research institutes have gone through a hard time since the financial crisis. It would be good to make them more autonomous from now on. Research institutes in the private sector must be fostered so that they can map out a vision and strategies for the country. We should not leave this job in the hands of amateurs who are replaced whenever a new administration takes office.
In an aging society, health and welfare industries can become major industries. When incomes increase and globalization expands, tourism and the sports industry can be the driving force of the economy. Food and beverage industries, such as fast food chains, cola and coffee bar chains in the United States, can be a locomotive for the economy, too.
A research team led by professor Suzanne Berger, a member of the MIT Commission on Industrial Productivity, interviewed the world’s top 500 companies. The research concluded that nearly all industries or businesses extend the possibility of further advancement.
Korea can foster all these industries as strategic industries, particularly when the economies of Korea, China and Japan are blending into one another. Korea’s smokestack industries, such as shipbuilding and steel manufacturing, are becoming growth industries.
Korea’s builders can become a global growth industry. Korea’s builder, Samsung, took part in building the three tallest buildings in the world. Korea should develop more industries and become a world-class country.

*The writer is a professor emeritus at Seoul National University. Translation by the JoongAng Daily staff.

by Song Byung-nak