Losers who win
The author is the Washington bureau chief of the JoongAng Ilbo.
Rhee Chang-yong, director of the Asia and Pacific Department at the International Monetary Fund, gave a lecture at a prestigious private university in Seoul a few years ago. “Raise your hands if you want to start your own business after graduation,” he asked students. Only 10 students, or about 10 percent, raised their hands, even though it was an entrepreneurship class. Lee asked the same question at a university in the United States and 70 percent raised their hands.
Last year, the percentage of Korean college students who said they would start a business or work for a startup were only 2.8 percent and 1.1 percent, respectively. Young people mostly want to work for the government or large companies. The real unemployment rate among the young is 23 percent. One out of 10 students can find a part-time job at a convenience store in college towns. The number is problematic as it determines our future. As Korea is a small country with high educational levels, we can only count on the brain and our pioneering spirit. Nevertheless, entrepreneurs only make up 0.8 percent of the young population, while that figure is 9 percent in China. As China’s population is 20 times larger than ours, that creates a vast gap. What should we do?
I found some inspiration from what Amazon founder Jeff Bezos said at an event in Washington last year. Bezos is the great innovator of our time. However, he discussed failure rather than success. “Failure and innovation are inseparable twins,” he said. “At Amazon, we have to grow the size of our failures as the size of our company grows.” In the past 22 years, Amazon started nearly 70 businesses, and 18 of them failed. But they became a kind of fertilizer for success of other ventures. Uber founder Travis Kalanick was bankrupt and went three years without any income. After four big failures, he succeeded. Alibaba founder Jack Ma overcame eight failures.
CEOs in Silicon Valley have, on average, chalked up 2.8 failures each. Korean startup CEOs failed 1.3 times. Does that mean Korean CEOs are smarter? Unlikely. Entrepreneurs in America and China are not afraid of failure and would challenge themselves again by starting another business. Local governments subsidize job search costs for failed entrepreneurs. The startup period is recognized as work experience, and social security insurance is also provided. Governments also provide them with a substantial safety net, with strict screening. But this is not the case in Korea. Startups are encouraged, but we are not generous with failures. In fact, failures are punished. Once a business fails, it is tied up legally and financially. Entrepreneurs cannot right themselves with any speed even if they want to. That is the hidden reason why the number of startup failures among CEOs in Korea is less than half of that in Silicon Valley.
Last weekend, President Moon Jae-in attended a “failure expo” for the people who want to make comebacks. He said they should have dreams again. But that positive message alone won’t produce an Amazon or Alibaba in Korea. Drastic reform of our systems and social beliefs is needed for second chances to be given more freely in Korea. Only then will there be jobs and growth engines for the future.
If we look around, there are groups that make easy comebacks in our society: politicians and celebrities. I believe that pioneering young entrepreneurs must learn from them. It takes a measure of fearlessness, ego, even shamelessness. But you never can succeed if you never try. That could help create a society with real potential.
JoongAng Ilbo, Sept. 19, Page 30