[Grand Prize] Overcoming Economic Polarization Thru Innovative, Creative Thinking
By Cho Eun-bit
Ewha Womans University
To the surprise of many, South Korea has recovered from the 1997 Asian Financial Crisis at a relatively faster rate than its neighboring countries. Nevertheless, behind the curtains of such a vibrant economy, still lie the dark traces left behind by the crisis _ economic polarization became highly visible in all corners of society and various social problems such as high divorce and suicide rates, and a low fertility rate ensued, followed by the sudden fall of the middle class.
Besides the Asian Financial Crisis, other external factors have contributed to the deepening of economic polarization such as structural changes brought on by globalization and rapid technological development, which is shown through the widening gap between large and small-to medium-sized companies (SMEs).
To effectively reduce economic polarization without undermining economic growth, efforts and measures should be taken harmoniously and simultaneously at both the microscopic and macroscopic level, focusing on tackling the root cause of the problem.
Microscopic measures taken at the community or individual level can alleviate social problems such as the abovementioned high divorce and suicide rates, and also more fundamental causes such as poverty that lie at the heart of the polarization.
As Dr. Muhammad Yunus said during his recent visit to Seoul, breaking ``the repeated cycle of poverty'' is essential to reducing economic polarization and this can be partially achieved by creating bonds within the community.
Schools in each district should encourage their students to ``give back to their community'' by helping the underprivileged who are found at the very bottom of the polarization curve.
Key Club, the oldest and largest service program, which began in the U.S. currently has a presence in more than 5,000 high school campuses. Under the motto of ``Caring _ Our Way of Life,'' the members of a Key Club are required to perform at least 50 hours of combined services at their home, school and community annually.
Through such program, students realize the importance of their role in the community and their less fortunate friends who are under financial difficulties will be able to receive sufficient help with their schoolwork without having to turn to private tutoring, which is one of the major causes of the education gap in South Korea. Also, such community efforts will more speedily resolve the internal problems related to economic polarization without having to turn to national or governmental measures.
Another effective step that should be taken within communities is to plant hope in the hearts and minds of underprivileged children instead of building up invisible barriers by setting limits according to a student's financial background or academic achievements. In other words, changing the perception of the younger generation is essential to reducing economic disparity.
One way of helping children overcome such boundaries is by providing financial assistance to underprivileged children through fund raising activities at school. In the case of the U.S., students with a family that cannot financially support them can raise money for band trips or cheerleading uniforms through candies donated by a company that is willing to give the profit generated from fund raising to the students with no conditions attached.
Nevertheless, such microscopic efforts alone are not enough to reduce economic polarization and therefore, the government should also take prudent measures at a national level. First, it should restore the middle class by creating new jobs for those who became jobless during the Asian Financial Crisis.
With the goals of reducing the high unemployment rate while at the same time, help the underprivileged by generating profits, both developed and developing countries have successfully established social enterprises. The Big Issue, a magazine company in the U.K., for example, has generated 5,300 jobs for the homeless since its foundation in 1991 and Juma Ventures in the U.S. is also a social enterprise that operates various types of businesses by hiring underprivileged children _ it also provides them with counseling, mentoring, and tutoring programs.
Next, the government should reduce the widening gap between the large and smaller enterprises through taking active measures. Due to globalization, only companies that are competitive on the global market survive and they tend to be bigger or multinational companies.
Therefore, small-to medium-sized companies are often driven out of the market by such harsh competition and thereby contribute to deepening economic polarization.
In order to ensure their survival, the government should encourage competitive SMEs to undergo continuous development through innovative efforts. In addition, the government should provide them with special loans at low interest rates, which can be used to generate new business ideas and to train their employees since many SMEs lack their own in-service institutes.
Moreover, the government should continue to focus on creating creative and unique jobs for the younger generation such as e-sports, taking advantage of its leading industries like IT and shipbuilding.
In the current era of globalization where countries are exposed to fierce global competition and are more vulnerable to external changes, economic polarization will continue to exist.
Therefore, to prevent additional negative consequences that may arise from economic polarization and to alleviate and reduce ones that are already visible in various spheres of South Korean economy without hindering its growth, efforts should be taken at both microscopic and macroscopic levels.
However, such measures should be taken simultaneously in that improvements in one will lead to improvements in the other. If globalization is something that is inevitable, why not make the best of it through creative and innovative ways of thinking?