The importance of ‘patience capital’The fourth industrial revolution is an important subject. It is proposed as an economic growth engine while spreading fear of mass unemployment. Some say that people are making too much of a fuss about technological advancement that has been in progress all along. Yet we all agree that AI, IoT, big data and biotechnology will transform industrial structure and lifestyle.
The exact course of development of the fourth industrial revolution is hard to predict. There are many core technologies, and there are more possible combinations of these technologies. It is hard to understand one scenario well, much less the complicated possibilities. However, technology developers need to focus on their own field. When different technologies are in development, it is not desirable to tap into multiple fields. Steve Jobs had advised, “Stay hungry. Stay foolish.” Young people should concentrate on the field of their choice foolishly earnestly.
In this age of uncertainty, investors should be patient when supporting engineers and entrepreneurs foolishly devoted to their projects. Development cannot be rushed. Instead, the success rate goes up when developers are supported and motivated with undeterred faith. Lately, in the United States, United Kingdom and European Union, the role of “patient capital” is emphasized for investment with uncertainty and long pay-back period.
In Korea’s economic development process, “patient capital” through the government has been essential. Shipbuilding, automobile and semiconductors are innovative yet uncertain investments in a country with only agriculture and light industry.
However, the same success is not guaranteed this time. In the past, Korean government was deeply involved in distribution of capital as well as supply of patient capital. In the fourth industrial revolution with high uncertainty and many possible outcomes, the government’s distribution capability is not necessarily better than in the market or private sector. The government’s role is to make sure patient capital is sufficiently supplied while coordinating knowledge and wisdom of different sectors.
*Professor of business management at Dongguk University.