When Koreans become the minority in Itaewon
I was at Itaewon recently and was surprised how the neighborhood had changed. It has been a while since I last visited and what struck me the most was how diversified the crowd and dining establishments have become. Compared to the old days when Itaewon was mostly a shopping destination for surplus athletic wear and accessories, it now seems to have blossomed into the most international area in Korea. There was a very diverse mix of restaurants and interesting blend of foreigners and locals. This recent visit instilled another sense in me of how Korea had come a long way in terms of its internationalization.
Korea is the world's 13th largest economy and ranks higher in terms of exports. This is with a population that ranks only 25th globally while the mostly mountainous land area is only the size of the U.S. state of Indiana. Despite its limited natural resources, the nation has emerged from the ruins of the Korean War in 1953 into an economic success story. Korean brands such as Samsung, Hyundai and LG have become global household names.
So, how would we judge the success of a nation other than by the level of its economic activity? In my view, it is the level of "integration" with the rest of the world. I define this in two ways: First, it is the level of representation with major international events, and on this front, Korea has succeeded. The other is international representation in Korea, in which I believe there is still room for more improvement.
One of measures by which emerging nations placed themselves on the international stage is by hosting the Summer Olympics. Japan achieved this when the city of Tokyo was selected as the venue for the 1964 summer games. Seoul achieved the same feat in 1988, a year which many say is when Korea catapulted onto the global scene. By 2018, Korea will have hosted all the major global sporting events _ the Summer Olympics in 1988, the 2002 FIFA World Cup with Japan and the 2018 Winter Olympics.
Korea has also hosted other major international events, including Daejon Expo in 1993, APEC conference in 2005, and the G20 meeting last year. It will also host the Yeosu Expo in 2012. But, perhaps the single most visible representation of Korea on the global stage is Ban-Ki Moon, the recently re-elected Secretary-General of the United Nations.
I think the missing link in the successful "internationalization" of Korea is to have better international representation in Korea. The ideal would be for the nation to become an East Asian business hub. We're not quite there yet but there has been material progress in Korea's efforts.
A good example is the district of Songdo, which is about 70km west of central Seoul, and only 12 km from Incheon International Airport, the main gateway to Korea. This planned city built on 1,500 acres of reclaimed land has an advanced technology infrastructure, "green" buildings, a leading international school, hotels, a convention center and sprawling park areas. Its infrastructure has made it a city of the future and this has been featured repeatedly in the global media.
One of Korea's key advantages in becoming an international hub is that it is one of the most wired nations. In a recent report published by the Boston Consulting Group, Korea was the nation with the "most far-reaching and deepest digital activity." The report focused on the nations' infrastructure, e-commerce and embracement of the Internet by the public and private sector, and Korea emerged in the top spot in this analysis. As we move deeper into the 21st century, my view is that the digital advancement of the country will become a key selling point in attracting multinational companies.
Finally, there are other assets that Korea can leverage in building a strong regional presence.
Korea has an attractive location in East Asia as it is strategically located between Tokyo and Shanghai, two regional economic hubs. In addition to Seoul, the neighboring city of Incheon, where Songdo is located, will be the host of the 2014 Asian Games. This could help boost the image of the nation as a high-tech and efficient gateway to northeast Asia.
Korea’s National Pension Service ranks among the world’s top five largest pension funds and this vast source of capital can be used to attract financial companies to build a bigger presence in Korea. The NPS is increasingly growing its overseas investments in equities and alternatives with some accounts that this could represent about 10 percent of its portfolio by 2015. As most overseas investments are externally managed, this could help lure foreign companies to Korea in an attempt to tap these funds.
Perhaps by 2018 when the Winter Olympic Games are held in Pyeongchang, Korea will place itself on the global map in all terms and be referred to in the same terms as any other major country. And maybe Koreans could become the minority in Itaewon.