Within a generation, South Korea has managed to transform itseconomy from one of the poorest in the world to one of the rich-est. At the heart of this change lies innovation.
By taking this success into account, we need to first consider somechallenges:
If you’re a scientist or engineer at Samsung Electronics and youcome up with some brilliant new idea, you don’t quit and startpitching your ideas to venture capitalists and set up your own firm
– you move up into management withinSamsung. South Korea is squeezed betweenlow-wage China on the one hand and moretechnologically advanced Japan on the oth-er so there is a sense of anxiety. The domi-nance of chaebols (family-run conglomer-ates) in the Korean economy makes it diffi-cult for small and midsize enterprises withnew ideas to grow.
Making the shift from a fast follower to acutting-edge innovation leader is difficult.It requires a fundamental change in corpo-rate strategy, workforce education and so-cietal culture. How the Korean economyfares in the medium to long-term futurewill depend on how the domestic challengeof low productivity is addressed. The keywill be in raising domestic productivity byall firms in all industries, including in lessglamorous sectors like hotels, restaurants,retail distribution, insurance, utilities andgovernment services.
In terms of politics, taking these steps willnot be a walk in the park, however. Buteven the longest journey begins with a sin-gle step – and for Korea to move forwardit needs to start walking. It will certainly bean interesting journey to watch…