Long-term blueprint for economy

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Long-term blueprint for economy

During its prime years, mobile phone maker Nokia had been pivotal to Finland’s economy. Its fall since 2008 devastated the Finnish economy, with nearly one-third of the more than 8 percent drop in Finnish gross domestic product in 2009 attributed to Nokia.

The economy is recovering and gaining vitality after the government paid more attention in nurturing venture start-ups following Nokia’s exit. Various start-ups that had been unnoticeable because of predominance of mega giant Nokia ventured into business, and their entries have the Finnish economy.

The economic ups and downs in Finland in recent years demonstrate the limits and vulnerability of an economy that relies primarily on large companies. They also proved that a country can sustain stable growth only through innovation and enterprise. The power of the U.S. economy comes from the steady stream of innovative start-ups like Facebook and Tesla Motors. It is how the American brand stays on top of the world.

South Korea is laying the foundation to build a creative economy and start-up powerhouses. The “creative economy” that the incumbent government pursues is based on a far-reaching vision for the country’s future a century on. The colossal shift requires an entirely new development strategy, but what we see instead are awkward, hasty and narrow-minded gestures. There are already a lot of self-congratulatory talks on accomplishments and meaningful steps toward the goal. At the current pace, the creative economy may end up in the wall of exhibitionist administration displays. A creative economy and start-up powerhouse cannot be built overnight through a few one-time projects, slogans and seed funds.

The key is the incubation of creative and venturous minds. But the education field remains highly competitive and rigid, pushing kids from one cram school to another to line them up for fiercely narrow college entries. Korean children spend a lot of time in school (220 days in Korea versus 180 days in the United States) and even longer hours studying in private tutoring institutions.

Parents who spend 25 percent of their income to educate their children pressure them to begin a long and strenuous race to higher education early on. Such concentration helps Koreans perform better on tests but cannot build the creative and innovative human capital that the government demands in order to build an economy based on creativity. The OECD may not be entirely correct in its assessment, but nevertheless cannot be denied.

There are even cram courses to help job seekers land jobs with the likes of Samsung and Hyundai. The private education industry moved fast after millions of college graduates rushed to apply for large companies.

To end this vicious cycle, young people should not be customized to aspire to look for jobs in large companies. They should be given diverse career choices in small or midsize companies or start their own business. But Korean society steadfastly clings to its old ways and mindset. Parents fiercely persuade their children against starting their own business and young people often give up looking for jobs if their options are in small and midsize companies. The country needs first to build a new path if it wants to have a creative economy one day.

Fortunately, Koreans have historically been blessed with innovative and venturous genes. The metal print, the Korean language and the turtle warship are some of Korea’s great inventions. Korean food, such as bibimbop and kimchi, are praised for their inventiveness. Few cuisines in the world combine so much ingenuity and science for an everyday meal. Koreans are also unrivaled in perseverance and integrity. Koreans have sufficient potential to play active roles in the world.

All of the problems Korea faces today are interwoven. They cannot be unraveled through a short-term or nearsighted approach or solution. Koreans tend to rush things when they work on a deadline. The path toward a creative economy must be taken one step at a time, coordinating and ironing out policy details on education, corporate habitat, business relationships and public lives in the process. We need a long-term blueprint to create a new economy and a country for the next century. We must remain focused without fretting over immediate results.

Translation by the Korea JoongAng Daily staff.

*The author is a partner of Arthur D. Little Korea.

By Hong Dae-soon

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