Creatively destroying economy

By Jason Lim

Recognizing that Korea has reached the limits of its export-driven economic model, President Park has been championing the expansion of a “creative economy” in Korea based on innovation and entrepreneurship. A key element of this strategy is to create an ecosystem that encourages and nurtures risk-taking for start-up, which is especially challengingin Korea where the huge conglomerates called “chaebol” dominate the playing field.

KakaoTalk has been a notable exception to the rule, a feel good story of a homegrown messenger service that quickly grew to dominate the Korean market. In fact, it recently merged with the #2 search engine in Daum to create a combined company called Daum Kakao that valued KakaoTalk at over $3 billion. It wouldn’t be a stretch to call KakaoTalk a prime example of what Park calls creative economy.

Unfortunately, it looks like that Park’s government is inadvertently engaging in creative destruction rather than creative economy. Following Park’s comments during the Sep. 16 Cabinet meeting that complained about unfounded online rumors going too far and dividing the society, including those that wildly speculated over her whereabouts on the day of the Sewol ferry sinking, the government went into overdrive to proactively clamp down on speculative cyber chatter.

As ubiquitous as it is in Korea, KakaoTalk became the natural epicenter for a public concerned about their privacy from overreaching prosecutors, who, according to AP, “announced the launch of a team to monitor online information. They said anyone who posts or passes on information deemed false will face punishment. They said that for ‘grave matters,’ investigations will begin without waiting for complaints and offending information will be deleted.”

AP also reported that Daum Kakao received “2,131 requests for users’ information from authorities with search warrants during the first half of 2014, and it cooperated with nearly 61 court-approved requests by collecting messages stored on its servers for between three and seven days.”

Daum Kakao didn’t help matters when Lee Sirgoo, co-CEO, said that his company is “subject to South Korean law” and will hand over the requested information “when there is a fair execution of law.” Although Lee might have been stating the obvious from his perspective, the public reacted angrily to Daum Kakao and began to vote with their feet (or fingers) by taking their business to Telegram, a German messaging app with a reputation for being uber secure.

Many people are rightly blaming Daum Kakao for not recognizing the potential danger of the situation and reacting accordingly, rather than seem nonchalant about legitimate user concerns over their privacy. They are now in full crisis management mode, but the damage has been done. They might eventually recover – as others have done – but it will take a great deal of effort and time.

But what I found most interesting was that the Korean public became angry at Daum Kakao _ which was only following the law _ rather than at the government. It almost seems as if the public is looking to a company to provide privacy protection for its customers, rather than the government to provide the same. It goes to the lack of social trust in South Korea. It doesn’t look as if the people consider governing as an act of serving the public but rather as an effort to control and persecute them. In short, they don’t trust the government to do what’s right by them.

Daum Kakao obviously recognizes this and is seeking to win back the public’s trust by promising not to cooperate with the government, arguing that there has yet been a public dialogue and social consensus over the scope and limits of online privacy for individuals. Just think how radical this position is. The co-CEO of a major IT company is calling out the government over the latter’s exercise of its power, basically labeling it as non-legitimate.

Going back to nurturing a creative economy, how can do so when a key prerequisite of that ecosystem must be the building of trust between the would-be-entrepreneurs and the government? An ecosystem is not about just paying lip service to prospective investors or entrepreneurs. It’s more than policymaking and government edicts. It’s about engagement and relationship-building to make mutually beneficially and dependent connections that result in sustainable and nurturing environment.

You can’t announce one day that you will now declare the opening of a creative economy and expect everyone to take you at your word. This is not the Field of Dreams whereby they will come if you build it. You must show a dedicated, coordinated, and consistent effort to engage with your audience and involve them into building what they require. Creative economy can’t be just marketing. It has to be engagement and collaborative problem solving.

Unfortunately, as the Daum Kakao situation shows, Korean culture of governance is still characterized by command and control tendencies tinged with dismissive condescension towards those whom they have been elected to serve. This doesn’t lend itself to the type of trust capital that’s needed for a creative economy because, ultimately, creative economy is not about changing the economic model. It’s about changing the culture of trust in Korea.

Jason Lim is a Washington, D.C.-based expert on innovation, leadership and organizational culture. He has been writing for The Korea Times since 2006. He can be reached at jasonlim@msn.com, facebook. com/jasonlimkoreatimes and @jasonlim2012.