Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Japan overtakes Korea in entrepreneurship
By Park Jae-hyuk
In 2016, Korea lagged behind Japan on the global entrepreneurship index for the first time in three years, due to the two neighbors’ differing institutional basis for doing business, a Korea Economic Research Institute (KERI) report showed Thursday.
According to the report based on the Global Entrepreneurship Development Institute (GEDI) data announced last November, Korea ranked 27th among 137 countries at 50.5 points, while Japan placed 25th at 51.7.
The rankings have been reversed for the first time since 2013 when Korea ranked 37th and Japan 34th. Last year, Korea came in at 27th with 53.4 points and Japan was 30th with 50.6.
“Unlike Korea that has remained stagnant on the entrepreneurship index, Japan has established its institutional basis for entrepreneurs,” said KERI researcher Park Hyun-sung, who conducted this study. “Japanese Prime Minister Abe Shinzo has continued to emphasize animal spirits for entrepreneurs under the basis of Abenomics.”
Coined by legendary economist John Maynard Keynes in the 1930s, animal spirits refers to an entrepreneurial attitude and instinct that can positively affect consumer sentiment and business confidence. Keynes thought animal spirits could become an economic driver.
In addition, Korea ranked lower than countries with smaller economic scales, such as Chile in 18th place, Estonia in 23rd and Slovenia in 26th.
The researcher ascribed the nation’s low entrepreneurship index to its negative views on successful entrepreneurs and corruption in the public sector, both of which are related to the ongoing political turmoil from the influence-peddling scandal involving President Park Geun-hye and her shadowy confidant Choi Soon-sil.
The researcher said the increase in political risk for the country, which was up 0.18 points from a year earlier, affected the entrepreneurship index negatively this year as well.
For an improved index ranking, she suggested wide-reaching societal efforts, including corporate social responsibility (CSR) activity, incorruption in the political sector and education to improve people’s stance on business.
The study also showed two populous Asian nations’ rapid growth in the entrepreneurship index. India and China, both of which have promoted the startup sector, went up from 98th to 69th and 60th to 48th, respectively.
Taiwan topped the Asian countries, ranking in at 16th with 60.7 points, thanks to its support for IT startups. The United States maintained the top spot, followed by Switzerland, Canada, Sweden and Denmark.