Lost in the ‘creative’ woodsWhat do these items or people have in common? One: training shoes that tell how many calories one burns through walking or running. Two: a system that waters indoor plants automatically. Three: a scientific and engineering solution that can buffer noise between building floors. Four: flowers that change color according to temperature. Five: innovative brains like Bill Gates and Steve Jobs. Six: Psy’s new song “Gentleman” that is sweeping the global music charts.
They are all examples of “creative economy” earnestly championed by President Park Geun-hye. If one is still puzzled about what the creative economy means, let’s go back to the definition the author of the term gave earlier.
According to Park’s definition, a creative economy is a merger of science and information and communication technology based on a radical shift in paradigm with a key value of turning innovation into economic value. Different industries can converge, and industry and culture can be mixed to create new value and job opportunities.
So are we all clear now? Somehow we don’t see a lot of nodding. A program host of JTBC’s talk show “Sseoljeon (Talk Fight),” a nonscripted, blunt discussion on current issues, joked that there are three unfathomable current issues: the president’s creative economy, Ahn Cheol-soo’s so-called “new politics” and what goes on in the head of North Korean leader Kim Jong-un.
The government has been trying hard to explain the baffling term. A research arm of economy, humanities and social sciences of the Prime Minister’s Office invited so-called experts from various sectors to discuss the creative economy. One professor said that the concept is not that grand. “It’s an economic environment where one does not have to have an elite university degree to earn a decent living or does not become homeless overnight because a start-up business went bankrupt; where people don’t have to be as brilliant as Steve Jobs to succeed, and failures become seeds to creative success.”
Another speaker elaborated that it was “uncreative to try to define what is creative.” Instead of debating the concept of the creative economy, the government and society should discuss the means to attain the goal, he argued. He suggested that it would be better to learn things in the process of working to create a new, symbiotic economic habitat. At the venue hung a banner describing it as the first session of its kind, implying the government is planning to continue with public debates until it comes to full grips about the idea.
But while authorities are trying to figure out the concept of creative economy for the future, the real economy of the present is quickly receding. Exporters are panicking with losses from a weak yen and economic prospects are turning from bad to worse. Companies are sitting on their pile of cash reserves and consumers are refraining from spending. The economy is hardly moving due to sluggish exports and domestic spending. When growth slows, so does hiring.
But the Park administration does not have any answers to these urgent problems. It did make some gestures. The government proposed a supplementary budget and announced measures to stimulate the real estate market. But how the measures can help the economy and what effect it expects has not been explained.
It fell short of saying whether these measures would be enough to revive the economy or how much the economy can improve. In short, the government does not have a comprehensive outline to jump-start the lethargic economy nor the traction to put it back on a solid growth path. It is sketching the periphery without a core and direction.
Because it has not drawn a full picture on economic policy and direction, priorities on necessary policies are mixed up and even conflicting. In one corner, the government is saying it will cut administrative red tape and liberalize in order to stimulate corporate investment. In another, it is emphasizing tougher regulations to enhance economic fairness.
The government pledges full support to small and mid-sized companies and at the same time announces it will expand tax auditing to increase tax revenue. It said it will decrease budgetary expenditures to make up for revenue shortages and yet it pledges to fully keep the campaign promises on new welfare spending. The economic team is swaying from anti-corporate economic democratization to corporate-friendly economic stimuli at a single word from the president.
All policies must serve purposes and needs. The economy needs to be revitalized and more economic fairness must be practiced. Helping small and mid-sized enterprises and increasing welfare are all commendable and appropriate directions to take. But these works cannot and should not be done all at the same time.
The government must first examine the feasibility, cost, urgency, relevance and impact, and prioritize the necessary policies in order. It is one of the crucial jobs of the government. The economy and public finance would be in a mess if the government pursues all good and meaningful policies.
In economics, there is a term called fallacy of composition. All individually reasonable and right economic activities do not always bring about a positive outcome. We can draw wrong conclusions and fall into the trap of fallacy if we are too engrossed with the details without seeing the whole picture.
The economic team is mostly composed of bureaucrats who didn’t help the president win the election. There are no discussions and ideas about the economic vision since the framework has already been established. Everyone moves on orders from the president.
When the president vowed to keep her campaign pledges, they echoed back, and when she emphasized a creative economy, they got busy deciphering her concept. It is why we only have a whole array of details and not an outline. In the meantime, the economy we live in is sinking fast.
*The author is an editorial writer of the JoongAng Ilbo.
by Kim Jong-soo