[Column] From K-pop to a ‘Hallyu economy’

Lee Young-ryeol

The author is a professor at Seoul Institute of the Arts.

“K-content, a relief pitcher on the export front.”

That was the title of a report by the Ministry of Culture and Sports for the fourth Export Strategy Meeting hosted by President Yoon Suk Yeol in his office on Feb. 23. During the meeting, the ministry promised to elevate K-content to the ranks of global Top 4 by further promoting it around the world. K-content exports hit $12.45 billion in 2021 thanks to the global popularity of Hallyu, or the Korean wave. The sum swelled 4.4 percent from 2021 even amid the Covid-19 pandemic.

Exports of K-pop, K-dramas, K-movies, K-games and K-webtoons have grown powerful enough to exceed the combined exports of traditional products like TVs, refrigerators and washing machines. Content exports also affect related items. For instance, if K-content exports increase by $100 million, exports of consumer goods, like cosmetics, fashion and food, increase by $180 million. The president’s underscoring of the need to link K-content and fashion, tourism, food and IT also can be understood in such a context.

Cultural content is effective in creating jobs. In 2019, the employment inducement coefficient of the industry — or the number of direct or indirect hires per one billion won ($755,858) in final demand — was 12.4, higher than that for cars (6.8) and chips (3.0). The cultural content industry is a boon in the era of jobless growth from automation in the manufacturing sector.

K-content has expanded to beauty, fashion and food products beyond the earlier genres of song, drama, film, game and webtoon, spurring a craze for Korean cuisines and language around the globe today.

Hallyu noticeably took off on YouTube and Netflix during the pandemic. K-pop sold more than 80 million albums around the world in 2022, and the number of global Hallyu fans soared to 156.6 million in 116 countries in December 2021, a 17-fold increase from 2011. After the successful debuts of “Squid Game” (2021) and boy band Kingdom on Netflix, K-drama and K-entertainment continue to rank at the top.

That’s not all. As seen in three Michelin-starred Korean restaurants in New York last year alone, K-food is creating a sensation mostly thanks to Hallyu’s power to lift the country’s image as a cultural powerhouse.

News reports about the Hallyu phenomenon on foreign media outlets attract more attention in other countries than in Korea. The sharp dispute over the management rights of SM Entertainment also was treated as top news by CNN and the Wall Street Journal.

Does the popularity of Hallyu really help induce foreigners to visit Korea, boost our exports to foreign countries or draw investment from them? Could the Korean wave give strong momentum for the struggling Korean economy to rebound from its sluggish export and frozen demand at home?

There are some clues to answering the questions. In a four-day performance in Las Vegas last April, BTS raked in 131.5 billion won through concerts and other promotional events. The sales of cheer sticks alone topped 15.3 billion won. A three-course meal of gimbap, tteokbokki and steamed galbi was priced at more than 60,000 won. Las Vegas city officials were excited about the job-boosting effect of the BTS performance, while Democratic Senator Catherine Masto of Nevada extended her heart-felt thanks to the boy band on Twitter.

What would have happened if such a glitzy performance had been staged in Korea? According to the estimates by the Korea Culture & Tourism Institute, BTS will create a maximum 1 trillion won in economic value per performance if the boy band performs in Korea.

Beside BTS, Korea has an army of K-pop bands, such as Blackpink, Twice, Stray Kids, NCT and Seventeen. Regrettably, though, nearly all of them announce plans to perform overseas.

A score of K-dramas have entertained foreigners on Netflix in the past, but the country rarely tries to attract foreign tourists to their filming locations. Given the 1 million foreign tourists in 2019 who traveled to Nami Island — the backdrop for the 2002 romance drama series “Winter Sonata” — it would be perfect if K-content and K-tourism can be combined.

The declaration of 2023-24 as “Korea Visit Year” by the Korea Tourism Organization in December — and its ambitious plans to integrate K-culture and K-tourism and improve services for foreign tourists after the pandemic — also reflects a close connection between culture and tourism. But our tourism industry is sitting on its hands.

In January alone, 434,000 foreigners visited Korea. But more than four times the figure — or 1.78 million Koreans — traveled to foreign countries. Despite the explosive demand for tourism after the end of the pandemic, the industry is engrossed in dealing with outbound tourists.

If the country wants to ride the Korean wave to boost inbound tours and multiply Hallyu product sales exponentially, an incremental improvement by each government ministry is not enough. I propose the Yoon administration to push it under the greater banner of the “Hallyu economy” and merge its cultural, economic and diplomatic policies into one at national levels.

The “Hallyu economy” is a growth policy aimed at creating jobs and achieving economic growth at the same time by integrating the global cultural phenomenon to the economic sphere based on three axes: reinforcing our cultural content industry; boosting inbound tours and drawing foreign investments; and amplifying our cultural export. The move is in the same context as former president Lee Myung-bak’s championing of clean energy and eco-friendly policy under the flag of “green growth.” This time, we can ride the popularity of K-content and find a promising growth engine.

To achieve the goal, the government must serve as a command center that can incorporate the Hallyu-related activities dispersed in the private and public sectors. For instance, the government can create a platform like “Hallyu Valley” — where all information on the Hallyu culture or economy can be shared — and where not only K-pop or K-drama or K-game creators but also travel agencies, hotels, general trading companies, food companies, central and local governments all can exchange their information and collaborate to escalate the efficiency of their business.

Above all, the government must draw up a farsighted masterplan to turn the country and K-content into a hub for global cultural content over the next 100 years. The government must provide financial support and tax incentives for creators involved, including art teachers at elementary schools, and for creative fusion in the fourth industrial revolution. I hope the government can create jobs and achieve economic growth by taking advantage of the power of K-culture.

Korea can learn lessons from France, an industrial power and cultural powerhouse, as manifested by its advanced nuclear reactors, high-speed trains, aviation and automobile industries, as well as its unrivaled strength in tourism, fashion, luxury brands and food sectors. France attracted 90 million foreign tourists in 2019, No. 1 in the world. The fashion industry’s contribution to the GDP amounts to 3 percent, larger than from its car and aviation industries. Nearly a half of the 270 global luxury brands come from France.

The French government consistently consolidated the linkage between culture and economy, as seen in the presentation of a joint report in January 2014 by the Ministry of Finance and the Ministry of Culture on economic benefits from culture. In a Cabinet meeting on tourism strategy in June 2021, French President Emmanuel Macron declared to permanently establish France as No.1 tourist destination in the world. Paris, the capital of world tourism and global luxury brands, was not built in a day.

Britain is no exception. After former prime minister Gordon Brown declared to build “Creative UK” in 2008, 13 creative industries, including fashion and games, grew at double its GDP growth rate between 2011 and 2019. Current Prime Minister Rishi Sunak is accelerating the transition by transferring digital affairs of the Department for Culture, Media and Sport to the Department for Science, Innovation and Technology in January to foster its creative industry.
Translation by the Korea JoongAng Daily staff.