A tiger smells opportunity

9_seoul

South Korea is hungry for new victories. Seoul’s quickly evolving skyline is just one indication of South Korea as an economic miracle.

A Korean avoids big words, and Lee Myung-bak, president of South Korea hardly needs them. The now-millionaire grew up in poverty, put himself through university in Seoul and went on to become chief executive at Huyndai, mayor of Seoul, and finally the country’s president in 2008.

South Korea’s story mirrors that of its leader. Only six decades ago the nation was in ruins and dirt-poor after a long Japanese occupation and the Korean War. Now it’s ranked among the world’s richest countries and is part of both the G20 and the OECD.

Shaping an economic wonder

The model for today’s South Korea was born in the 1960s, when military dictatorship ruled the country. The president General Park Chung-hee hand-picked the industries he wanted to develop. These companies received exclusive funding from the state, while high tariffs kept foreign competitors at bay.

Through this strategy, South Korea built the backbone of its economy: conglomerates or chaebols that still control the country’s economic life. The largest of these – Samsung, Hyundai/Kia and LG – are well-known around the world.

A shared future

The most powerful secret to South Korea’s success may be its continuing attachment to the ancient Confucian culture. School children start their days by declaring their devotion to their country, and in the trains train attendants bow to customers each time they enter or exit a car.

Hong Kyung-jin, the head of STX offshore & shipbuilding, refers to Saturday as “second Friday.” Workweeks often stretch to six days.

In everyday life Confucianism is evident in the presence of hierarchies, in the need to respect one’s elders and fulfil one’s responsibility to the end. Where Western thinking emphasises a personal quest for success, Confucianism teaches individuals to push relentlessly towards a shared goal.

Sparking a green light

Next, the government wants to turn South Korea into a superpower of green technology. It will invest two per cent of the country’s GDP into developing green technologies. By 2020, Samsung will invest 21 billion dollars into environmental and healthcare technologies.

The government can no longer protect Korean companies against foreign competition. Korea’s markets are attracting foreign giants, and the iPhone and other phenomena of the mobile age are all the rage in Seoul. Foreign auto manufacturers are only waiting for the last remaining firewalls to fall.

British Tesco and American Toys “R” Us – in collaboration with chaebols Samsung and Lotte – have shown that a foreign retailer can find success in the region.

Can a grey tiger leap?

South Korea’s population is ageing just as quickly as that of Japan and many countries in Western Europe. In the short term, women may offer the most eligible pool of workforce.

The prospect of being a housewife doesn’t attract Korean women anymore and girls are competing for university admissions, and in many fields as many as 50 per cent of students are women. At 1.24 children per mother, South Korea’s birth rate is among the lowest in the world.

Immigration could also aid the ageing South Korea, which is one of the world’s most ethnically homogeneous countries.

Even Confucianism won’t necessarily stand its ground amidst the pressures of the mobile digital age. Young Koreans don’t share the ideal of collective struggle as absolutely as their parents. 

Business etiquette the Korean way

  • Remember the position and age of the person to whom you’re talking.
  • Networks surpass all. Family, classmates and army buddies come first.
  • Forget cold calls. Locate someone within your network to open doors.
  • Act quickly. A Korean customer doesn’t wait.
  • Don’t fly solo. Favour collaboration.
  • Do your homework. Koreans are tough partners.
  • Take small gifts with you and hand them out at meetings.
  • Karaoke in the wee hours of the morning is part of local business culture. Or play a round of golf with your colleagues. Shared time outside of the office is essential.
  • If you don’t know the Korean language, find a reliable partner who does.

Text by Anna-Liisa Lilius
Photo by iStockphoto

A version of this article was previously published in Finnair´s Blue Wings magazine (September 2010).

Published August 2, 2011

Category: Local features

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