South Korea: the challenges

For the past 55 years, South Korea's development was stunning. Starting as a country ravaged by war and poverty, it became one of the world's industrial powerhouses, leading the world in production in many fields.

In today's changing world, South Korea faces many challeges. On one side, it has emerging strong competitors in some of its traditional production areas, particularly those where it is most competitive, such as steel production, shipbuilding, vehicles and parts, petrochemicals, and consumer electronics. This competition comes from newly developing nations with enormous human resources and abundant capital reserves, like China and India.

On the other hand, South Korea has not yet reached the levels of technology and/or brand management and placement which could challenge some of the world's leading nations. To cite a few examples, Apple recently introduced its new Iphone and sold 2 million units during its opening weekend. Although this device incorporates some South Korean-developed technologies owned by Samsung, this Korean corporation, as powerful as it is, is not yet able to market such a successful product. In the same line, when the Korean POSCO steel chaebol needed IT to improve its productivity, it turned its eyes to that old reliable source, IBM, which in turn provided the expertise which gave POSCO the capability to face its new competitors. There are many other examples for this point, like premium shipbuilding in Germany, France, or Finland (cruise ships with a high added-value when compared to South Korean-made supertankers or freighters), or premium European automotive brands.

With competition from emerging nations on one side and higher goals to reach on the other, South Korea, a very dynamic nation, doesn't stand still. It is facing the challenges of the XXIst century globalized information economy seriously. Since the mid-90s, it launched programs to become one of the world's most internet-connected societies. The government of South Korea led the way to become a world leader in e-government services provision. New technological institutions have sprouted, with both public and private support. Seed funds for technological ventures are available. South Korean logistics companies have created smart IT solutions which move products from ships to seaports, and on to railways and roads more efficiently. This progress, added to South Korea's e-government efforts to minimize customs, quarantines, and other bureaucratic procedures at points of entry and exit, make South Korea more competitive. Another result, probably more important, is the fact that South Korea is becoming an exporter of IT solutions to other countries, such as my own, Guatemala.

KLnet, a South Korean corporation, is currently in the process of studying Guatemala's main seaports, with the idea of streamlining their operations, making them more efficient. If carried out, KLnet's solutions will contribute to improve Puerto Quetzal, on the Pacific side, and Puerto Santo Tomas on the Caribbean, create a new cargo hub for Central American and the Caribbean, as well as badly needed jobs and revenues for the country.

Again, South Korea is rising to the challenge. This is, like the country's first industrialization wave, another example of collaboration between government, the chaebols, and South Koreans in general. With the addition of first-class technological educational and research institutions, both publicly and privately funded, it is a clear blueprint for success.

Indeed, South Korea seems to be getting ready for the XXIst century!

South Korea's Development 1960-2008

South Korea has become, in less than 50 years, one of the most developed countries in the world. According to the UNDP's latest Human Development Report, published for 2007/2008, it ranks 26th in the world, with a total HD index of 0.921 (out of 1.00). This is an astonishing success, taking in consideration that South Korea had, in 1960, a percapita annual income of $80!

What's South Korea's secret? What allowed this small peninsular nation, almost devoid of resources, to reach developed nation status in develpment indicators? Above all: hard work. A strong national work ethic, coupled to a strong national feeling for improving society, even when faced by the destruction of war, hardship, and poverty. All society worked in unison to reach clearly defined goals. Secondly, a strong social fabric tied to a strong leadership. For political and cultural reasons, this factor is unique to South Korea: it had a series of strong-handed military governments which set national goals and priorities with a clear agenda for everyone to follow. Also, the military governments found a receptive audience in Korea's Chaebols (the strong Korean business groups which control the larger part of the economy and which became the leaders in Korea's industrial and commercial success -while, of course, reaping the biggest rewards).

Another important factor is Korea's ethnic and cultural cohesion. Korea is one people, with one language, and one culture. There is a national ethic of hard work, respect for others, strong family bonds, and respect for one's "betters" (this includes intelectuals, rich people, and to those in command positions in society). This has brought a stable social order, low crime rates, a commitment to education and family improvement, and, in this meritocracy, the oportunity for social improvement for yourself or for future generations.

For historical reasons, many of these factors, crucial to its development, are ingrained in South Korea's culture. Even in the XVIIth century, civil servants were carefully selected from qualified applicants, and the king received reports of the province's selection processes. Also, Korea was located in an Asian crossroads, which caused repeated invasions, but also gave Korean people trade contacts with other societies, reaching as far as the Turkish Empire in some occasions.

Today, Korea thrives on this combination of factors: a strong government (which is nowadays a democratic, elected one, but with enough power to set a national agenda), a cohesive and culturally monolithic society, strong business groups, and above all, clear goals. This combination proved successful in the 60s, when the goal was to set a national heavy industrial base, with steel, petrochemical, shipbulding, and other heavy industries. This combination provided enough resilience as to withstand the "Asian Tiger Crisis" of the late 90s. This combination is paving the road for the country's future: IT, software, high added-value hardware, and international trade.

Something else: as a result of these factors, all South Koreans have benefited from the improvement. Korea has high human development marks, with high education and health access levels, improved living standards, good public services, and a trustworthy government leading the way.

The Soul of Korea

South Korea is an extremely progressive country in East Asia. As everybody knows, through hard work it has become one of the world's economic powerhouses. Right now, it presses forward with the intention of heading, as a modern technological society, into the XXIst century.

Currently, South Korea creates, develops, markets, and sells ideas and products which make our everyday lives easier and better. For this purpose it has unleashed its people's creativity and productivity. A true world leader in its field!

Becoming a modern, affluent, industrialized society after starting as a poor, rural one has not been easy. Still, Korea didn't loose its soul in the process.

I have witnessed, as I travel through this land, both faces of Korea: the modern, industrial, hard-working South Korea, and the Korea of family life, respect to the ancient ways, and strongly tied to its rich history.

After working hard through the week, Koreans visit their national historical monuments, they eat -mostly- Korean food, revere their national symbols with pride, and stick to traditional ways. This way, South Korea has the best of both worlds: a modern and technological society with a good quality of life, yet strongly attached to its ancient culture. Not even a long and hard history of colonial domination, invasion, and war destroyed South Korea's soul.

I hope Korea's soul stays intact forever!