The other Korean wave

• Published May 22, 2013 5:15 PM KST
• Updated May 22, 2013 5:15 PM KST

By John Burton

Korea has many types of glamorous models. But the one that excites foreign governments the most is called the “Miracle on the Han.”

Emerging countries from Azerbaijan and Kazakhstan to Cambodia and Saudi Arabia have been intensely studying Korea for lessons on how they can copy its rapid rise from a war-devastated agricultural economy to a global industrial powerhouse in the span of only 60 years. Their interest is not surprising. Jim O’Neill, the recently retired chief economist at Goldman Sachs who coined the term BRIC economies, has described Korea as “the most interesting story in my lifetime.”

While attention has mostly focused on the Korean wave of entertainment as the best example of the country’s “soft” power, Korea’s biggest and most enduring influence is likely to be the economic lessons it imparts to others.

There are several reasons besides Korea’s obvious economic success that made it an appealing model for emulation by developing countries. One is that Korea’s population and economy is mid-sized, neither too big like China and Japan nor too small like Singapore, making it easier for countries of similar size to apply appropriate lessons.

In addition, Korea has never been seen as an expansionist power, using its influence to gain control of other countries. Korea (at least the southern half of the peninsula) is more like the Switzerland or Sweden of Asia.

Another advantage is that Korean companies and products have long been familiar in emerging markets, from Korean construction companies in the Middle East to Hyundai cars in India and Samsung televisions in Vietnam.

The Korean government has gradually come to realize that its economic model is a factor that can help win friends overseas. The Korea Development Institute and the Korea Foundation now host programs to share what is dubbed the Korean Experience with visiting government ministers, bureaucrats and graduate students from Asia, Africa and the Middle East.

Courses range from industrialization and the vital role of R&D in powering economic growth to creating a well-functioning bureaucracy and implementing cost-effective government programs.

Korea must compete with other regional rivals that are promoting their own achievements to an eager and influential audience. For example, Singapore’s Lee Kuan Yew School of Public Policy, named after the city-state’s founder, has been aggressive in exporting the nation’s autocratic brand of efficient bureaucratic governance to other one-party states.

In contrast to Singapore, Korea emphasizes its political transition from a dictatorship to a democracy as an important factor in creating a vibrant economy.

What is intriguing, however, is that much of Korea’s economic success can be traced back to the heavy state intervention practiced during the brutal authoritarian rule of Park Chung-hee and his military successors.

Unfortunately, it is that aspect of the Korean growth model that apparently attracts the most interest among the officials of autocratic governments from Uzbekistan to Vietnam who have flocked to Seoul to learn about the Korean Experience.

Perhaps these foreign officials should realize that Koreans are increasingly questioning whether the Korean model has become outdated. The top-down approach in government and corporate management may have functioned well in a country bent on rapid industrialization. But it appears less effective as Korea moves toward what President Park Geun-hye calls the “creative economy,” one based on an aspirational and entrepreneurial culture.

It may be time for Korea to start learning lessons from emerging countries as well. India, for example, provides one good example. It is less industrialized than Korea, but has made greater progress in developing an internationally competitive services sector.

A consumer-oriented, bottom-up management approach, which has been influenced by the growth of the country’s services industry, has been adopted by some Indian manufacturing companies.

For example, Mahindra, the Indian conglomerate that owns Ssangyong Motor, is using a form of crowdsourcing to help shape its future strategy for electric vehicles.

Mahindra launched what it called the Ask campaign, encouraging the public in India to post questions and comments on the future of mobility. It received more than 12,000 responses, with suggestions ranging from covering highways with solar panels and creating special lanes for electric vehicle to offering module car seats that could be added or removed to change a vehicle’s interior space.

Korean companies often do not seek or even welcome this kind of input or advice by outsiders, an institutional arrogance encouraged by the country’s earlier record of industrial success.

But Korean executives and bureaucrats need to make use of similar innovative practices to ensure the country’s economic model remain relevant to the 21st century.

John Burton, a former Korea correspondent for the Financial Times, is now a Seoul-based independent journalist and media consultant. He can be reached at johnburtonft@yahoo.com.