Hyundai did the reverse, scaling back
its electronics division to focus on cars.
Korea made some of its best decisions in the wake of the crisis. Its information technology, pop, drama, film, and video game industries as we know them today all arose out of a last-chance,
long-shot gamble to get out of this hole. (All these industries will be discussed in later chapters.)
A period of massive debt might seem like the worst time to try to build brand-new industries. Korea could coast on its already successful products, like mobile phones and semiconductors. Why
would it want to shift its focus to something so intangible and fickle as the content industries, like pop culture?
This seemingly quixotic plan was the brainchild of President Kim Dae-jung. Kim was best known for his historic summit in 2000 with North Korean leader Kim Jong-il, and a photo of the two men
shaking hands was a shot heard round the world. That year, Kim was awarded the Nobel Peace Prize. His final years (he died in 2009) were overshadowed by shocking allegations that he had essentially
paid for the photo op, funneling hundreds of millions of dollars to the North Korean government. But as far as this book is concerned, Kim is the hero of Hallyu.
The IMF crisis had revealed a fault line in the Korean economy: the nation had become overly reliant on the chaebols—the mega conglomerates. This meant that if the chaebols fell, so fell
the nation.
Korea has no natural resources and very little arable land. Compounding the problem is that labor costs have risen so dramatically in the last twenty years that the country cannot rely solely on
manufacturing as a source of wealth.
Korea is held back by an additional political handicap. According to a Korean economist who is also my dad, Korea is lacking in one huge technological advantage from which nearly every other
industrialized nation has benefited for years: the option of letting the military lead the technological curve. “Since World War II,” he said, “countries have been investing
heavily in technology for military and defense, and the research they produced trickles down to the private sector.”
For example, the GPS technology that is now common-place in smartphones and cars was first developed by the United States and the former Soviet Union in the 1970s for use in air force navigation
and tracking nuclear warheads; jet engines were invented by Germany and the UK for use in World War II aircrafts.
By contrast, Korea is not permitted to pursue military technology on an aggressive scale. In accordance with the 1953 mutual defense treaty between South Korea and the United States, South Korea
cannot make any major military decisions without U.S. support. In other words, Korea can’t compete with the big technological players in certain areas. Thus it has been forced to focus
elsewhere.
President Kim Dae-jung pushed information technology, which was an obvious and easy point of entry: all you really need are coders. He also set his sights on popular culture.
According to Choi Bokeun, an official at Korea’s Ministry of Culture, Sport, and Tourism, Kim marveled at how much revenue the United States brought in from films, and the UK from stage
musicals. He decided to use those two countries as benchmarks for creating a pop culture industry for Korea.
Was Kim out of his mind? Building a pop culture export industry from scratch during a financial crisis seems like bringing a Frisbee instead of food to a desert island. But there was method to
the madness. The creation of pop culture doesn’t require a massive infrastructure; all that is required is time and talent. And countries have always exported goods that no one really needs.
Did nineteenth-century China need Britain’s opium? Did judges in Bombay need heavy, sweaty English barrister wigs? Did Korea need Spam?
The American in me understands how easy it is to take pop music for granted as something that moody teenagers listen to
its electronics division to focus on cars.
Korea made some of its best decisions in the wake of the crisis. Its information technology, pop, drama, film, and video game industries as we know them today all arose out of a last-chance,
long-shot gamble to get out of this hole. (All these industries will be discussed in later chapters.)
A period of massive debt might seem like the worst time to try to build brand-new industries. Korea could coast on its already successful products, like mobile phones and semiconductors. Why
would it want to shift its focus to something so intangible and fickle as the content industries, like pop culture?
This seemingly quixotic plan was the brainchild of President Kim Dae-jung. Kim was best known for his historic summit in 2000 with North Korean leader Kim Jong-il, and a photo of the two men
shaking hands was a shot heard round the world. That year, Kim was awarded the Nobel Peace Prize. His final years (he died in 2009) were overshadowed by shocking allegations that he had essentially
paid for the photo op, funneling hundreds of millions of dollars to the North Korean government. But as far as this book is concerned, Kim is the hero of Hallyu.
The IMF crisis had revealed a fault line in the Korean economy: the nation had become overly reliant on the chaebols—the mega conglomerates. This meant that if the chaebols fell, so fell
the nation.
Korea has no natural resources and very little arable land. Compounding the problem is that labor costs have risen so dramatically in the last twenty years that the country cannot rely solely on
manufacturing as a source of wealth.
Korea is held back by an additional political handicap. According to a Korean economist who is also my dad, Korea is lacking in one huge technological advantage from which nearly every other
industrialized nation has benefited for years: the option of letting the military lead the technological curve. “Since World War II,” he said, “countries have been investing
heavily in technology for military and defense, and the research they produced trickles down to the private sector.”
For example, the GPS technology that is now common-place in smartphones and cars was first developed by the United States and the former Soviet Union in the 1970s for use in air force navigation
and tracking nuclear warheads; jet engines were invented by Germany and the UK for use in World War II aircrafts.
By contrast, Korea is not permitted to pursue military technology on an aggressive scale. In accordance with the 1953 mutual defense treaty between South Korea and the United States, South Korea
cannot make any major military decisions without U.S. support. In other words, Korea can’t compete with the big technological players in certain areas. Thus it has been forced to focus
elsewhere.
President Kim Dae-jung pushed information technology, which was an obvious and easy point of entry: all you really need are coders. He also set his sights on popular culture.
According to Choi Bokeun, an official at Korea’s Ministry of Culture, Sport, and Tourism, Kim marveled at how much revenue the United States brought in from films, and the UK from stage
musicals. He decided to use those two countries as benchmarks for creating a pop culture industry for Korea.
Was Kim out of his mind? Building a pop culture export industry from scratch during a financial crisis seems like bringing a Frisbee instead of food to a desert island. But there was method to
the madness. The creation of pop culture doesn’t require a massive infrastructure; all that is required is time and talent. And countries have always exported goods that no one really needs.
Did nineteenth-century China need Britain’s opium? Did judges in Bombay need heavy, sweaty English barrister wigs? Did Korea need Spam?
The American in me understands how easy it is to take pop music for granted as something that moody teenagers listen to
Similar Books
