[Viewpoint] Can Korea ‘stay hungry’?

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[Viewpoint] Can Korea ‘stay hungry’?

The world continues to heap praise on Korea’s economy. U.S. President Barack Obama and the global media have continuously sent letters of praise. Korea has captured the world’s attention for its economy for the first time.

But we can’t be entirely comfortable with such praise, because we know our capabilities and fragilities perfectly well. Household debt has reached 800 trillion won ($714 billion), while public debt is nearing 600 trillion won. The worsening polarization in the political sphere obstructs some paths to progress, not to mention the astronomical projection of the possible cost of unification with North Korea in the future.

While there are so many things to spend money on, there are only a few sources of revenue. The domestic market has weakened, while the export market, responsible for over 40 percent of our GDP, is in a long-term recession and faces the threat of a global war over currency values. It truly feels like walking on thin ice.

What’s even more worrisome is the disaster dubbed “age-quake,” or our rapidly aging society. Korea’s demographics are aging faster than any other country, and that presents fundamental problems to the country and its economy. One of our main economic engines, a young workforce, will disappear and the conflicts and friction between generations will grow rapidly.

As every company has a life cycle, a country’s economy does, too. An economy begins from a seed, which germinates, grows, matures and eventually withers. The 1960s was the period of germination and growth for the Korean economy. During that period, an economy is defiant and flexible, and that’s what we were at the time. We all rose to the spirit of challenges, and that allowed us to create the so-called miracle on the Han.

Flexibility was also another capability. Numerous challenges, such as oil shocks, foreign exchange crises and financial crises, came before us - but we always used them as opportunities to grow. Dynamic flexibility is our most precious and proud asset.

Korean companies were able to surpass their Japanese rivals because they had the ability to transform - like chameleons - which the Japanese had a hard time comprehending.

Our aging society will see that ability disappear. What’s most lethal to the economy is not the aging population, but the aging of Koreans’ spirits. We will lose the spirit of daring and challenge and only try to protect what we currently have.

The younger generation, which should be imbued with the spirit of challenge, is losing its dreams. Although the time has inevitably come in which people’s interests are more diversified than in the past, and career advancement isn’t guaranteed by hard work, youngsters must have dreams. When they lose their dreams, they will have no future. And ultimately, the nation will have no future.

The older generation is responsible for the situation. Parents have taken the safe path, rather than taking risks. Schools have drained youngsters’ imaginations by forcing them to learn through rote memorization. And society has shown youngsters an uncertain future, forcing them to avoid having children of their own.

It is time to give dreams back to the youth. Education reform should be focused on helping students dream again. Programs to allow them to work for their dreams must be reinforced. Pride for Korea’s history and culture should be emphasized so that the youth can dream about a better country and society. Our civilization may be old, but our energy can stay young in that way.

Reduced flexibility is another phenomenon that darkens our future. The basis of all survival lies in the flexible adaptation to change. The 21st century is an era of hard-to-predict change and innovation. It is an era of the “Black Swan Theory,” as formulated by Nassim Taleb, which emphasizes the disproportionate role of high-impact, hard to predict events on history, science, finance and technology. Smart phones are an example: they came, we saw them and they changed our lives. We have no choice but to adapt. Many countries have failed to adapt and fell behind into the second tier.

Any country needs good governance to achieve change and reform. But Korea’s ability is extremely weak. According to a World Bank survey, the governance ability in politics is particularly weak.

Eternal confrontation between the conservatives and the liberals, with distrust and hatred, have ruined our politics. A countless number of bills are stuck in the legislature, while politicians only speak for their own interests, rather than trying to persuade rivals to join their side. Populist spending of what should be earmarked for the next generation is out of control. An economy without good governance can collapse.

In politics, there is no absolute right. To make the best decision at the right time, conservatives and liberals must not take arguments too far. They must remember that criticism of their rivals must be practical and civilized. Conservatives and liberals need to be flexible.

If politicians are not able to work together, intellectuals must try. The conservative and liberal academia must communicate. They must have the intellectual honesty to criticize their own extremists.

It is hard to build, but easy to destroy. When the world praises us, we must look at ourselves to see if we have the illness of success.

As Steve Jobs once said at a Stanford University graduation: “Stay hungry.”

*Translation by the JoongAng Daily staff.
The writer is a professor of management science at Korea Advanced Institute of Science and Technology.


By Lee Hong-kyu
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