South Korea is rising — fast. Turning around countries is not easy. But South Korea seems to have done it. The Cool Korea story in Business Week talks of the change, and how South Korea can serve as a model for other emerging economies:
The changes have been pretty much nonstop since the economic trauma of 1998, when gross domestic product contracted 6.7%. Today, Korea is back with a vengeance. Its economy grew 5.7% in the first quarter. Its phones, cars, and movies are hot around the world. Its citizens are riding a high verging on cockiness.
This country of 48 million has become a model for developing nations everywhere. Nowhere is this more true than in its home region, where Japan is a waning force and much of Southeast Asia continues to struggle with sick banking systems and dwindling foreign investment. The commentators may be right that the future belongs to China–and that Korea itself still needs to keep reforming. But Korea has already made the transition from authoritarianism to democracy and from a low-end, exporting economy sealed off from the world to one that is plugged-in, dynamic, and increasingly high-tech. It will be some time before China gets there.
South Korea has momentum. How did it do it? Answers Business Week:
First, President Kim Dae Jung and his advisers managed to cut the connection between Korea’s banks and the chaebol, the conglomerates that once ruled Korea. Second, the Koreans created an economy that did not depend exclusively on exports to survive. They fashioned a full-fledged domestic economy, a rare thing in Asia. Third, the trauma of crisis and change unleashed a wave of innovation in business and culture that is still in effect.
Vision combined with Will. Most emerging markets lack both, and its no wonder then that they stay where they are. It is not just managing the short-term or the long-term, but both.