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!