ed Slogans and substances

Ways to build ‘creative’ economy are far from creative

President Park Geun-hye’s “creative economy” slogan is timely and appropriate because Korea should change from fast follower to first mover. But the Park administration’s key policy to take it into action ― requesting, or forcing, 17 family-controlled conglomerates to set up and manage regional “creative innovation centers” in as many provinces and cities ― is outdated and ill-fitted.

Nothing backed up better the pessimistic outlook for the policy than a meeting between President Park and 17 chaebol chairmen at Cheong Wa Dae on Friday to discuss the issue. There was little debate because all participants ― not just bureaucrats but tycoons ― were busy jotting down Park’s unduly long and detailed remarks, or directives.

It was little different from weekly Cabinet meetings at which one can see only one-sided proceedings but hear few voices of dissent. Park even called a ruling party whip who disagreed with her policy a “betrayer.” Can this be an environment for creativity that prospers on differences?

The launches of the 17 innovation centers in as many cities and provinces in the past 10 months were a typical top-down process, similar to a military operation. The “artificial allocation” of chaebol to regions where their flagship units are located and pairing them with local small- and medium-sized enterprises and venture companies resulted in the overlapping of business lines with existing ones, forcing corporate executives to rack their brains to find “plausible items.”

Some businesspeople demonstrated their best creativity in creating perfect photo-ops for their bosses along with the chief executive visiting their innovation centers.

And, if experience is any guide, most of the chaebol may unlikely keep their promises to invest a combined 136 trillion won ($116 billion) until Park leaves office in early 2018. All this comes as a deja vu. Early in their terms, most Korean presidents keep some distance from chaebol to keep campaign pledges, but move closer to the industrial behemoths out of realistic needs for them to cooperate in bolstering the economy. Chaebol make commitments to capital spending, much of which ends up as lip service, and just wait.

There is, of course, nothing wrong in trying to make chaebol spend part of their accumulated reserves to help jump-start the moribund economy. It is also true governments can do little to put their economic and industrial policies into action without the cooperation of the giant conglomerates ― the 10 biggest chaebol account for 60 percent of gross domestic product.

But the way to do so must not be pandering to the whim and arrogance of big businesses but sticking to laws and principles. Instead of pardoning law-breaking tycoons, for instance, the government should force them to pay due amounts of corporate and inheritance taxes, improve opaque corporate governance, and stop them exploiting smaller firms by slashing supply prices or even snatching their hard-developed technologies.

President Park should keep her campaign pledge to rein in the chaebol’s excessive influence and make them toe the legal lines. For a more creative economy, Park should start by reforming the education system from rote-memorization to free discussion, better protecting intellectual property rights of SMEs and ventures, and creating a social environment where failed businessmen can make second, and third, attempts.

There is one small but substantive thing Park can do to help some creative firms: tell state spies to stop snooping on citizens, which forces Koreans to avoid homegrown high-tech SNS providers.