By James Rooney
In 1998, Korea as the “Miracle on the Han River” was experiencing a terrible shock to its national pride and suffering what appeared to be a huge setback to its economic progress.
Extraordinary measures were required to rescue the nation, and the pain was felt from the highest levels all the way down to the lowest workers. But even though you can argue about the details, the strong and painful medicine of the “IMF Crisis” turned out to work. Korea recovered.
By 2003 it was again operating at full speed. And when the Global Financial Crisis came in 2008, Korea was stronger and well-balanced enough to weather this more severe storm with relative ease, while other countries with so-called advanced economies received enormous impacts from which they will still take many more years to recover.
But during this last decade of reorganization and recovery many things have changed in Korea and for Korea in the world. These changes already provide the context and the roots for growth that will determine where Korea will be ten years from now, which raises the interesting question of “where will Korea be in 2020?”
The changes that are already visible cover a wide spectrum of business, economic, financial, social, and human dimensions.
For example, the weakest companies have already collapsed, been restructured or disassembled, and the valuable parts reintegrated into new organizations and economic entities.
Other weak business models are still in the process of collapsing or being restructured, but perhaps in less dramatic ways than ten years ago, and with more experience and professional expertise available to them to encourage positive outcomes rather than cosmetic changes that achieve nothing.
The stronger companies have been able to continue their competitive advances in the global economy, with Samsung emerging as a vital supplier for many of the most successful new products and Hyundai Motors gaining a high reputation for quality and product competitiveness.
Even Daewoo Motors has proven to be a valuable asset of the new GM in its quest for market recovery.
The Korean economy has recovered its level of $20,000 of GDP per capita, essentially becoming a fully developed economy while still containing many strong existing and new growth opportunities.
In recognition of its importance in the world, Korea has become an active and well-respected member of the G-20 grouping of leading global economies, speaking not only for itself but also for other countries that aspire to economic progress and want to find new balances in the functioning of the world economy and financial system.
Korean society is also making progress from the “Hermit Kingdom” mentality of the last five hundred years, with a new and dynamic approach to multiculturalism and the integration of non-Koreans into social activities, and maybe Korea is even beginning to remember its high level of globalization from over two thousand years ago when a beautiful Indian princess came from far away to marry the King of Gaia and bring new inspirations into Korean society.
At the same time, huge internal changes are reshaping important characteristics of Korean society that have prevailed since the end of the Korean War.
The value of professional women in the workforce continues to be increasingly recognized, and women are enjoying this new-found role with greater and greater enthusiasm as it becomes more socially acceptable.
Today there are vast new legions of “Golden Misses”, young ladies who have chosen to forego the commitments of marriage and domestic family life in exchange for continuing to pursue their professional and business careers.
The social pressure to be married by the age of 28 for boys and 26 for girls is steadily weakening, with marriage now often happening at a later age or even not at all.
These are amazing changes compared to the mindset of the 1990s, but they also have a significant consequence; delayed weddings and a lower overall marriage rate means delayed families and fewer babies.
If the long-term birthrate continues to fall, the proportion of young people in the economy must inevitably decline. Starting about ten years from now in Korea, this will mean less new entrants to the workforce, and a population that becomes increasingly weighted to older people.
The phenomenon of shrinkage in the younger portion of the population has already been going on for several decades in Japan, and is now visible in the absolute decline of the Japanese population as well as the relative aging of the population.
Many of these factors will provide the context for where Korea goes over the next ten years.
But there are also others together with new and powerful roots for growth in Korea which were hardly present in the 1990s. And those are what we shall continue exploring next time.