Doing business as usual

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Doing business as usual

I was worried from the beginning, when the Park Geun-hye administration advocated “creative economy” as the new paradigm of economic policy. We have witnessed such initiatives as the venture start-up of the Kim Dae-Jung administration, Northeast Asian financial hub of the Roh Moo-hyun administration and the “green growth” of the Lee Myung-bak administration being thrown away by the succeeding government.

Though I predicted the same for “creative economy”, I hoped it could be different from other slogans. Will Korea Inc. have a better future if the supply of innovative DNA through start-ups is discontinued while major corporations’ growth is sluggish and small and medium businesses lack competitiveness?

Worries are proven to be reality. Seoul Metropolitan City withdrew the entire 2 billion won ($1.7 million) allocated to the Seoul Creative Economy and Innovation Center from next year’s budget. Seoul Mayor Park Won-soon said in the budget plan briefing in November that the creative economy projects were promoted with money extorted from a conglomerate, namely CJ. He criticized that it was a method under which creativity could not occur.

Seoul Creative Economy and Innovation Center protested. The center claimed that its predecessor Dream Enter — an organization under the former Ministry of Future — and CJ had provided only 700 million won for interior costs. The center countered that Seoul City’s budget cut is a political provocation, turning a blind eye to the young people’s challenge.

According to a JoongAng Ilbo investigation into the 17 Creative Economy and Innovation Centers nationwide, they have notably lost traction since the Choi Soon-sil scandal broke. Events are canceled, and some centers haven’t been able to appoint leaders as there are not enough applicants. Tenant companies express deepening concerns that they may lose assistance like start-up space and funding.

Creative economy is in crisis. But ironically, many academic and economic experts say that creative economy is one of the few things that the Park administration did right. Even former Minjoo Party Chairman Moon Jae-in said in October that the area in which the Park administration made good efforts would be the support for venture start-ups.

In fact, in this administration, the atmosphere for start-ups has grown. In the first half of the year, there were 48,263 newly registered corporations, the highest in history for a half-year period. Despite an overall economic slowdown, the venture investment was at a 15-year high at 2 trillion won last year, and it is expected to reach 2.1 trillion won this year. The number of venture clubs in universities increased from 1,222 in 2012 to 6,561 last month. Korea has ranked top for three consecutive years, from 2014 to 2016, in Bloomberg’s innovation index.

Of course, there are adverse effects. Just as Mayor Park criticized, it is an outdated idea to set up innovation centers by twisting arms of the conglomerates. There are talks that some regional centers would be used as training facilities or in-house venture space. There could be other companies like I-Kaist, which was praised as a model of creative economy but whose CEO was arrested for fraud. Some ventures are only eyeing government funding.

But we cannot stop here. If some are staggering, they should be helped to stand upright rather than pushed to fall. If the wound is infected, it should be cut out rather than leaving the patient to die. When competitors like China and Japan are doing their best to establish start-up-friendly environments, we cannot abandon creative economy just because President Park is corrupt. Creative economy should not be a scarlet letter of the Park administration.

When the United Kingdom was faced with limits of the manufacturing sector, it established a Creative Britain policy based on innovation of culture and technology in 1997. After Tony Blair established the policy in the first year of his term, the prime minister changed three times and the ruling party changed once, but the policy continues. The U.K. is leading not only cultural industries like musicals, pop music, film and fashion but also high-tech fields like artificial intelligence.

If the Roh administration had inherited Kim Dae-jung’s venture policy — and if the Lee administration had continued Roh’s financial hub policy and the Park administration had succeeded Lee’s green growth initiative, Korea may have been able to become a leader in venture, finance and renewable energy. But the policy was reset every five years, and the hard-earned outcomes became futile.

We don’t have to call it creative economy. The policy can be drastically revamped. But the environment for start-up ventures must continue.

JoongAng Ilbo, Dec. 12, Page B8

*The author is the industrial news editor of the JoongAng Ilbo.

Kim Jun-hyun
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