Via coolhunting (http://www.youtube.com/watch?v=RuKVU3WfbOE) ◦
Friday, May 28, 2010
Wednesday, April 21, 2010
Return of South Korea's industrial giants
A tycoon comes back as the saviour of Samsung Electronics, leader of South Korea’s remarkable business success. But where’s the crisis?
LEE KUN-HEE is a man of few words. So when the 68-year-old decided to come out of court-induced purgatory this month to retake the helm of Samsung Electronics, now the world’s biggest technology company, it was appropriate that he chose Twitter, a keep-it-brief social-networking site, to spread the news.
Mr Lee’s message was not just for employees of Samsung Electronics, by far the biggest part of his empire, but also those of the other 64 firms within the conglomerate that he controls. It was delivered with the sort of attention-grabbing hyperbole that any tweeter would be proud of: “It’s a real crisis now. First-class global companies are collapsing. No one knows what will become of Samsung. Most of Samsung’s flagship businesses and products will become obsolete within ten years. We must begin anew. We must only look forward.”
It did not quite have the pithiness of Mr Lee’s rhetoric in 1993 when he said Samsung was a second-rate company and that its employees should “change everything except your wife and children.” But his words had the same urgent ring of truth about them.
How can that be? It is a question that could be asked by anyone who has recently turned on a flat-screen television, bought a mobile phone, stored masses of data on a flash memory or watched Chelsea’s footballers in shirts sporting Samsung’s name. Far from being a disaster in the making, Samsung Electronics has become one of the world’s strongest brands, known for sleek design, razor-sharp technology and good value.
Think of anything with a screen, from a few centimetres square on a mobile phone, to a laptop, a wide liquid-crystal display or a giant 3D television, and Samsung Electronics will be one of the top two firms in the world making it—or at least the memory chips inside it (see chart). The company’s global market shares are staggering: more than 40% of the flash memory used in sophisticated electronics like the Apple iPhone, almost one in five of the world’s mobile phones and one in six of its television sets. It even makes screens for Sony’s TVs.
Having invested aggressively in new products in 2008, Samsung Electronics sailed through the global financial crisis, almost doubling its operating profit in 2009. This year analysts expect it to generate record profits of over $10 billion. Sales are forecast to be about $130 billion, which is likely to confirm its lead over America’s Hewlett-Packard as the world’s biggest technology company by revenue. Not to be outdone, other parts of the Samsung group have notched up successes. The construction division recently completed the tallest building in the world in Dubai and Samsung Heavy Industries is flush with shipbuilding orders.
In a way that General Motors can only have dreamed of, what has been good for Samsung has been good for South Korea. The group’s products account for about 20% of the country’s GDP, making it huge even by the standards of an economy top-heavy with big firms. When the won tumbled in 2008, raising fleeting fears of a currency crisis, exporting champions like Samsung, Hyundai and LG quickly took advantage, betting that their customers would be willing to buy newer, better models if the price was right.
South Korea’s conglomerates were also well diversified globally—only one-tenth of the country’s exports go to America. That meant sales lost in America were partly made up for by those gained in fast-growing emerging markets like China. Thanks to generous promises of government stimulus, South Korea, one of the rich world’s most export-dependent countries, pulled off the surprising feat of surviving the worst slump in global trade since the second world war with only a fleeting dip into recession.
For that, South Koreans give much of the credit to their industrial conglomerates, or chaebol as they are known, and the rich, inscrutable families who control them and live like royalty in South Korea. Yet Mr Lee’s comeback causes nervous speculation. If Samsung really does face a crisis, what does that mean for South Korea? If Mr Lee believes he is the only person who can avert disaster, what does that say about the business acumen of his potential successors? And if he can walk back into the corner office without even having board approval, can it really be argued that the country is progressing to Western-style standards of corporate governance? Business people have watched, with a mixture of suppressed glee and dread, former role-models such as Toyota and General Motors struggle with huge financial and technical problems. Could this be the fate that Mr Lee fears for his firm?
Get out of jail free
These are pertinent questions for Korea Inc, the business model that has so recently undergone a remarkable rehabilitation. Just over a decade ago, when the South Korean economy was reeling from its near collapse in the Asian financial crisis of 1997-98, it was the chaebol that were widely blamed by the public, the centre-left government of the time and the IMF.
The extent of the mismanagement was shocking. In the 1960s and 1970s, under the dictatorial regime of Park Chung-hee, the chaebol soaked up cheap government financing and relied on official protection from foreign competition. Loosely, the models were the zaibatsu conglomerates that had helped turned Japan into an imperial—and militaristic—power before the second world war.
The chaebol, some of which were started by war racketeers, had the same vast ambitions, albeit for industrial conquest—and they had public money to back them. Samsung expanded from sugar and wool into electrical goods, chemicals and engineering. Hyundai’s founder, Chung Ju-yung, started building roads and then decided to build the cars to drive on them. But many chaebol overburdened themselves with debt as they tried to move up the technological ladder in the 1980s. As they borrowed lavishly to buy capital equipment, South Korea’s current-account deficit soared. Some thought the chaebol had become so big the government could not let them fail. They were spectacularly wrong.
The wheels of industryThe conglomerates failed in droves. The collapse of Daewoo in 1999 was followed by the bankruptcy of more than half of the then top 30 conglomerates. Four of the country’s five carmakers (even Samsung had ventured into the market) went bust. South Koreans, many of whom had flocked to hand over their gold jewellery in a patriotic gesture to help pay off the foreign debt, were appalled at the level of government and business collusion that came to light.
Under two consecutive left-of-centre governments, many of the chaebol bosses—some now being run by the children of their founders—were prosecuted. Suspended sentences were handed out to the boss of SK in 2003, the former chairman of Doosan group in 2006, and the owner of Hanwa group in 2007. But this was justice for the rich—quite different from justice for the rest. Chung Mong-koo, chairman of Hyundai Motor (which also owns Kia, the country’s second-biggest carmaker) was convicted of embezzlement in 2006. But his prison term was reduced to community service and a $1 billion donation to charity because of his economic importance to the republic. Then in 2008 Mr Lee was convicted on tax-evasion charges, but also spared prison after paying a fine.
Partly chastened, both business and government have embarked on reform. Balance-sheets have improved, as has corporate governance, increasing the rights of minority shareholders and the responsibilities of company directors. Since then, some—though by no means all—of the cross-shareholdings used to disguise the weakness of subsidiaries and protect them from hostile takeovers have been rooted out and replaced with more transparent holding-company structures.
A friend in the Blue House
The reputations of the chaebol—especially in the eyes of South Koreans—recovered further during the 2008-09 global slump. So much so that when you ask experts in Seoul how their conglomerates fared during the crisis, some ask: what crisis? It was not just Samsung Electronics that sparkled. Hyundai increased market share in America every month last year, as its small, well-equipped cars with long warranties benefited disproportionately from the cash-for-clunkers programme.
For the first time in many years the chaebol have a political wind behind them. Lee Myung-bak, who became president in 2008, is a former chief executive from within the Hyundai extended family of firms. In December he pardoned Mr Lee, freeing the way for his return to Samsung. The same month he championed a successful bid by a chaebol-heavy consortium under the aegis of the Korean Electric Power Company to provide nuclear power to Abu Dhabi, pulling the rug from under industry leaders in France and Japan. This year, his government is pushing to relax holding-company laws that would make it easier for the chaebol to own financial firms. “The business community has not seen a political environment this accommodative in the past decade,” CLSA, a broker, said in a recent report.
Japan looks on aghast as the chaebol catch up with more of its large firms. “Of all their competitors on the global stage, the Japanese fear the South Koreans most,” writes Mark Anderson, author of Strategic News Service, a technology newsletter. Some Japanese industrialists acknowledge this publicly. “Korea is much more full of vitality than Japan,” Osamu Suzuki, head of Suzuki Motor, lamented in a recent talk to foreign journalists in Tokyo. “Japan is coasting.”
All of which makes Mr Lee’s strident warning, as the head of South Korea’s most successful company, more puzzling. The charitable view is that it may have been just a rhetorical device to soften up opponents to his rehabilitation—and to the eventual transfer of power to his son, Lee Jae-yong, Samsung Electronics’ chief operating officer. But it may also reflect deeper fears that the days of relying on manufacturing as a growth strategy, for all its technical sophistication, are numbered. The most obvious cause for concern is China. The acquisition on March 28th of Volvo by Geely, a Chinese carmaker, is the latest example of low-cost Chinese producers’ determination to build global brands.
In computer chips, Samsung Electronics is comfortably ahead of China for now. But the skills needed in that business are described by one Samsung expert as like running a “digital sashimi shop”—the trick is to get products so swiftly to market that they do not lose their freshness. There is no inherent reason why Chinese firms cannot eventually catch up. What is more, as Mr Anderson points out, China is more open to imports and foreign direct investment than South Korea, which helps China’s quest for intellectual property.
An even bigger threat comes from America. Late last year Apple finally got permission from South Korea’s telecoms authorities to waive a rule prohibiting the domestic sale of iPhones. Demand for the iPhone has since exploded, leaving Samsung and its domestic rival LG (which together have sold seven out of ten phones in South Korea), looking uncharacteristically leaden. Smart-phones accounted for just 1% of the market, but Apple has been selling some 4,000 iPhones a day, making South Korea one of the gadget’s hottest markets. Even the finance ministry has launched an iPhone application—the Glossary of Current Affairs in the Economy—to unexpected popular appeal.
For Samsung and LG this problem is magnified at the global level, and not just against Apple but also against firms like Google and Research in Motion, maker of the BlackBerry. For all its success in mobile phones, Samsung is an also-ran in the global smart-phone market. The South Korean company has rushed to remedy that with its own smart-phone platform, Bada, and by producing mobile phones that use Google’s low-cost Android operating system. As a result, Samsung hopes to sell more smart-phones in America than any other firm this year.
To win, however, Samsung needs more than sleek hardware. It is also outgunned by the iPhone’s 140,000 applications, which means it needs more creative input into its products. That will mean encouraging a less hierarchical, more inventive, corporate culture. The fluid ecosystem surrounding mobile technology may mean Samsung will need to engage more openly in partnerships with other firms, as it already has with DreamWorks Animation, creator of films such as “Shrek”, to help in the launch of 3D television. But such team efforts are not naturally in the DNA of a company that likes to keep its suppliers in the corporate family.
To their credit, Samsung executives did not appear to be complacent, even before Mr Lee’s call to action. They do not want to abandon what Samsung does best—making cutting-edge hardware—just because China is on the warpath or to chase Apple. They greatly value the Samsung brand, which has been painstakingly built through good design over many years.
But they do speak of change, albeit in an evolutionary way. They intend to offer affordable smart-phones to the masses, not just to the top of the market. To improve content, they are concentrating on hiring software engineers rather than hardware experts. And to help stimulate ideas they have offered flexible hours to their notoriously hard-working employees, as well as hiring more young people and women. Nor have they stopped benchmarking against their competitors.
But there is still the bottom line to worry about. “Samsung Electronics may be the largest technology company in the world by sales, but it’s far from global number one by profit,” Lee Keon-hyok of the Samsung Economic Research Institute acknowledges. Profit margins leave something to be desired. In the quarter ending on December 31st, Samsung Electronics reported operating-profit margins of 9%. Apple’s were 36%. Moreover, the South Korean firm can hardly dispute that its market-share gains—especially against Japanese rivals such as Sony—were helped by a cheap won. But in a country where being number one is almost an obsession, these are elements that are likely to make Samsung strive harder.
No leeway
Arguably the most difficult challenge Samsung Electronics faces is internal, and as in most things at the company that ultimately comes back to the patriarch. As Steve Jobs has proved at Apple, nothing beats having a visionary leader—and Mr Lee is one of those. It was his decision, back in 1993, to concentrate the sprawling empire on certain world-class technologies, like chips, mobile phones and display screens. He is credited with instilling the mantra of first-class product design among his staff.
But the manner of Mr Lee’s return may raise as many problems as it solves. When he stepped down in 1998, the hope was it would usher in a reform in Samsung Electronics’ corporate governance so that investors outside his sphere of influence—about half are foreigners—would have a clearer view of the way the company was run. His son was given different managerial posts, which groomed him for the top job better than many other “chaebol princes”. A murky Strategic Planning Office that sat atop the Samsung family of companies and allocated resources was disbanded. No one doubted that Mr Lee continued to pull strings from behind the scenes. But the first traces of Western-style corporate governance were apparent.
His return, without a board meeting to approve it, appears to have put that process into reverse. Already there is speculation that he will revive the “control tower” system of group-wide oversight. His comeback may make it even less likely that Samsung will embrace a more transparent holding-company structure as, say, LG has.
Most troubling, argues Jang Hasung, dean of Korea University Business School, is that the “emperor-management” approach suggests Mr Lee is not confident enough in the company’s numerous other executives around the world—including his son—to lead the company into the future. This problem is true of the chaebol in general; succession issues loom everywhere. What’s more, it appears to ignore the lesson so recently exposed by Toyota that family ownership can be a huge weakness as well as a strength.
“His decision to come back gives the impression that he’s the only one who can fix whatever crisis it is he’s talking about,” Mr Jang says. With so much of South Korea’s future at stake, maybe it is the next generation of leadership that Mr Lee should be tweeting about.
http://www.economist.com/world/asia/displaystory.cfm?story_id=15816702
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Sunday, April 18, 2010
In prosperous South Korea, a troubling increase in suicide rate
By Blaine Harden
Sunday, April 18, 2010
Choi Jin-young hanged himself last month with an electrical cord. The 39-year-old actor wasn't getting any work in local TV, police said, and he had been depressed since the suicide of his famous older sister.
The sister, Choi Jin-sil, was known as the "nation's actress." When she hanged herself in her bathroom in October 2008, a wave of sympathetic suicides swept South Korea and 1,700 people took their lives the following month.
Seven months later, former president Roh Moo-hyun jumped off a cliff to his death. "I can't begin to fathom the countless agonies down the road," he wrote in a note. Then a 20-year-old Chanel model, Daul Kim, killed herself, posting a blog entry that said: "Mad depressed and overworked." Another said: "The more I gain, the more lonely it is."
And so it ends for 35 South Koreans a day. The suicide rate in this prosperous nation of about 50 million people has doubled in the past decade and is now the highest in the industrialized world.
The rate of suicide in most other wealthy countries peaked in the early 1980s, but the toll in South Korea continues to climb. Twenty-six people per 100,000 committed suicide in 2008 (the most recent year for which data are available). That's 2 1/2 times the rate in the United States and significantly higher than in nearby Japan, where suicide is deeply embedded in the culture.
Before South Korea got rich, wired and worried, its suicide rate was among the lowest in the industrialized world. But modernity has spawned inordinate levels of stress. People here work more, sleep less and spend more money per capita on cram schools than residents of the 29 other industrialized countries that belong to the Organization for Economic Cooperation and Development.Still, it remains a taboo here to admit to feeling overwhelmed by stress. The word "psychiatry" has such a negative connotation that many leading hospitals have created departments of "neuro-psychiatry," in the hope that people perceive care as medical treatment and not as a public admission of character failure.
Before he hanged himself last month, Choi Jin-young had been struggling with serious depression, his friends told reporters. But they said he refused to consider psychiatric treatment.
"This is the dark aspect of our rapid development," said Ha Kyooseob, a psychiatrist at Seoul National University College of Medicine and head of the Korean Association for Suicide Prevention. "We are unwilling to seek help for depression. We are very afraid of being seen as crazy."
Denial extends to relatives of suicide victims. Recent attempts by the Ministry of Health and Welfare and suicide prevention groups to interview the families of those who kill themselves have produced little cooperation.
"When we go to the families and ask questions about why it happened, they say to us, 'Do not kill him twice,' " Ha said. "We have tried to interview hundreds of families, but we have only been allowed to talk to a few of them. If one is dead from suicide, everything is a secret."
Incidents of suicide are increasing most rapidly among the rural elderly, government figures show, driven among other things by isolation, illness and poverty. Suicide among the young has been abetted by the long hours South Koreans spend online. Police investigators say the Internet enables young people to meet and plan group suicides, even when they are strangers to one another and live in different cities.
Suicide is the leading cause of death among South Koreans in their 20s and 30s, and it is the fourth leading cause of death overall, after cancer, stroke and heart disease.
Yet what has particularly caught the eye of the public and the news media is a flurry of change-reaction suicides among the rich and famous.
Choi Jin-young's suicide generated front-page headlines, reminding the public of the suicide of his beloved sister, who killed herself after becoming distressed over Internet rumors that linked her to the suicide of another celebrity, comedian Ahn Jae-hwan.
No studies have found a statistically significant increase in suicide among the nation's elite. Still, noisy news coverage of these deaths has caught the public's imagination, and that worries Ha, the psychiatrist.
Government data show that suicides can trigger copycat behavior. Choi Jin-sil's death triggered a 70 percent increase in the suicide rate. It lasted for about a month, resulting in 700 more deaths during that time than would normally be expected.
"Famous suicides have a really bad influence," Ha said.http://www.washingtonpost.com/wp-dyn/content/article/2010/04/17/AR2010041702781_pf.html ◦
Thursday, April 15, 2010
How Korea Fretted Its Way to Success
Years of worrying about being squeezed by China and Japan helped Seoul stand up to its rivals. Now it's obsessed with finding the Next Big Thing
By Moon Ihlwan
The Korean business community thrives on worry. And for most of the past decade its main fear has been what could be called the Big Squeeze Theory. With higher labor and production costs than most Chinese exporters, the theory went, Korea's major conglomerates, or chaebol, would start losing market share to Chinese champions such as Huawei, BYD, or Baosteel. At the same time, Hyundai Motor, LG Electronics, and Samsung would, after a decade of dazzling success, finally be out-innovated by their archrivals in Japan.
The fretful Koreans got it wrong. Helped in part by a cheap won, exports of cars, ships, electronics, and semiconductors are soaring, while China has yet to pose a credible threat to Korean products. Instead, the Chinese are now mostly seen as customers, not rivals. Korea's exports to China jumped almost fivefold from 2000 to 2009, to $86.7 billion. "There's a consensus that China represents more of an opportunity than a threat," says Im Sang Hyug, senior researcher at the Federation of Korean Industries. Thanks partly to the healthy China trade, many companies, including LG, Hyundai, and Kia Motors, posted record profits last year. "Korea is the first country to stage a full V-shaped recovery," says Jeroen Plag, Korea manager for Dutch bank ING Group (ING).
The Japanese aren't putting up much of a fight, either. Case in point: televisions using light-emitting diodes as a light source. Thinner and lighter than other flat-screen TVs, the LED sets also have sharper, brighter images. Every TV maker has to have an LED offering. Yet after just a year, Samsung dominates the category with 85% of the vital U.S. market. The company forged ahead with an investment of hundreds of millions of dollars in 2009 in LEDs, despite the recession, and has trounced Japan's Sony (SNE), Panasonic (PC), and Sharp. In 2009, Samsung Electronics posted a 75% rise in profit, to $8.5 billion.
These big home runs have changed the mood in Korea. "I hear from a lot of people saying, 'Korea is on the rise. We have a lot of hope,'" President Lee Myung Bak told the nation in a recent radio address. Yet at some level, Koreans are still worrying. Big Squeeze Theory may be dead, but in its place is a new one: Finding the Next Big Thing.
The government and the chaebol now fear that some other country—India, China, even the U.S.—will come up with the defining business of the next generation. The Koreans are not sure what that business is, but they're spending billions in private and public money to discover it. They're also refining an old feature of Korean life, government planning, to lead the search.
The Middle East is already enjoying the benefits of Korean foresight. Seoul has been urging Korean construction companies to increase their presence in the Persian Gulf. In 2009, Korean companies priced so aggressively that they won half of all contracts handed out for oil and gas projects in Abu Dhabi, some $30 billion in all, says the International Contractors Association of Korea. A consortium led by state-controlled utility Korea Electric Power snagged Korea's first-ever overseas nuclear contract, beating France's Areva and a joint venture between General Electric (GE) and Hitachi for a project to build four plants in the United Arab Emirates. Soon, Korean companies will be "competing head to head with U.S. and European companies across the world," predicts Kim Kyeho, executive vice-president for Samsung C&T in Dubai. Samsung was primary contractor for Dubai's 162-story Burj Khalifa tower, the world's tallest skyscraper.
Korea's central planners want the chaebol to entertain even bigger ambitions. Led by President Lee, the cabinet last year launched a plan to expand Korea's economic base by promoting robotics, health care, biotechnology, green transportation, renewable energy, and other next-generation ventures, some 17 in all. The goal is to double exports in these areas, to $434 billion, by 2013; create a million jobs; and reduce the economy's dependence on info tech, shipbuilding, and autos. To spur this change, the government plans to spend $22 billion by 2013 to finance R&D.
In robotics, for example, Seoul has already doled out $500 million in R&D and is underwriting pilot projects to test education, entertainment, and disaster-fighting robots. Korea, which saw its robot exports jump 10.5% in 2009, to $809 million, aims to become one of the top three industrial robot manufacturers. It currently is No. 5 behind Japan, the U.S., Germany, and Italy.
For green technology, Lee's cabinet will focus on developing innovations for solar and nuclear, expanding the use of LEDs and stepping up renewable energy mandates across the country. The government will actively promote the convergence of the broadcasting and telecom industries and offer low-cost loans to help develop content for this emerging hybrid business.
Big ambitions. But Korea has a track record now. A generation ago, silicon chips and autos transformed the country and helped pull it out of an Asian currency crisis. If the Koreans succeed in half the areas they're investing in, they'll soon need something new to worry about.
http://www.businessweek.com/magazine/content/10_16/b4174056697361.htm
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Monday, March 22, 2010
South Korea's Service Sector Hits a Snag
Despite South Korea's status as an entrepreneurial powerhouse, its economy suffers from an inadequate service sector
By Rick Wartzman
Whenever I am in Seoul, as I was earlier this week, I find myself marveling at the place: its top-flight airport, its shimmering skyscrapers, its ubiquitous high-tech gadgetry—all of these outward signs of an economic transformation achieved largely in a single generation. It's no wonder that Peter Drucker called South Korea "undoubtedly" the most entrepreneurial nation on earth.
And yet if there is a weak spot to be found in Korea—and in many other countries around the world—it is one that Drucker also understood well: a huge service sector that is struggling to be productive.
Earlier this month, the South Korean government announced that it would invest 300 billion won (or $260 million) in research and development aimed at enhancing service-provider productivity. "Korean industries took it for granted to invest in R&D for products, but questioned the same necessity in services," one official explained. Now the plan is to promote technology that can spur advances in health-care delivery, advertising, design, business services, and more.
The Koreans are being driven, in part, by statistics showing that the nation's service sector is only half as productive as that of the U.S. But some wonder whether the strides the U.S. has made in this area over the last 15 years are more illusion than reality. Economist Paul Krugman, for one, has pointed out that much of the U.S.'s productivity prowess has supposedly been in financial services. "Given recent events," he asks, "are we even sure that the expansion of the financial system was doing anything productive at all?"
Wage Gap
In any case, what we do know for sure is that wages for many service workers continue to lag badly—and this is what most concerned Drucker. In fact, with the ranks of service firms growing rapidly, he warned of "the prospect of social tensions unmatched since the early decades of the Industrial Revolution."
The service sector is varied and vast. In the U.S. today, more than 80% of jobs are to be found in services; in Korea, that number stands at about 70%. Drucker, for his part, tended to divide this giant universe into two different categories: knowledge work and unskilled or semiskilled positions.
The former group is, of course, in relatively good shape—especially those who have been able to obtain high levels of education. In the U.S., for instance, those with a college degree earn on average two-thirds more than those who've finished high school, according to the Goldman Sachs Global Markets Institute. And those with professional degrees boast incomes nearly twice as large as those with just a college diploma.
But the latter group—janitors and waitresses, retail clerks and nursing-home attendants—are in a much tougher spot. "In their social position," Drucker wrote in a 1991 piece in Harvard Business Review, "such people are comparable to the proletarians of years ago: the poorly educated…masses who thronged the exploding industrial cities and streamed into their factories."
Targeting Productivity
For these workers to get ahead, Drucker believed that there was only one remedy: increasing their productivity (or output per hour of work). "The less productive an economy," Drucker asserted, "the greater the inequality of incomes. The more productive, the less the inequality."
Over the years, some experts have maintained that by its very nature, service work is labor-intensive and not conducive to productivity gains—a phenomenon known as "Baumol's disease" (so named for William Baumol, the economist who first described it).
But Drucker was convinced that it's possible to make significant leaps in service-sector productivity—though they won't typically come through the adaptation of new technologies, as the Koreans are hoping. Rather, Drucker said, the way to get there is to hark back to what Frederick Taylor, the "scientific management" pioneer, prescribed long ago: "working smarter."
Specifically, Drucker maintained that companies with proven success in this arena:
• "have defined the task" at hand;
• made certain that work is focused on that particular task, instead of running off in different directions;
• "defined performance";
• engaged every employee as "a partner in productivity improvement and the first source of ideas for it";
• and "built continuous learning" into each job.
"As a result," Drucker added, these enterprises "have raised productivity substantially—in some cases even doubled it—which has allowed them to raise wages. Equally important, this process has also greatly raised the workers' self-respect and pride."
How Soon?
The question is how soon any of this may actually happen on a scale big enough to narrow the wage gap between knowledge workers and their unschooled, unskilled service-worker cousins.
"Even in the most settled and stable societies, people will be left behind in the shift to knowledge work," Drucker acknowledged. "It takes a generation or two before a society and its population catch up with radical changes in the composition of the work force and in the demands for skills and knowledge. It takes some time—the best part of a generation, judging by historical experience—before the productivity of service workers can be raised sufficiently to provide them with a 'middle-class' standard of living."
All of which suggests that, in addition to the sort of investment the Koreans are attempting or the kinds of management techniques that Drucker advocated, nations may need something else if they hope to lift the fortunes of those with service jobs: a little patience.
http://www.businessweek.com/managing/content/mar2010/ca20100319_720054.htm
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Monday, March 15, 2010
North Korea: The mother of all dictatorships
To understand North Korea, look not to Confucius or the Soviet Union, but to fascist 1930s Japan
The face that North Korea presents to the world is widely held to be unreal. Kim Jong Il once told Madeleine Albright, Bill Clinton’s secretary of state, that the bombast in honour of himself and his late, great father, Kim Il Sung, was so much nonsense. Bruce Cumings, an historian, wonders what Mr Kim can be thinking, “standing there in his pear-shaped polyester pantsuit, pointy-toed elevator shoes, oversize sunglasses of malevolent tint, an arrogant curl to his feminine lip…and a perpetual bad-hair day? He is thinking, get me out of here.”
The notion that North Korea does not always believe what it is doing colours even diplomacy, which may soon start up again after months of tantrums on the part of the North. The aim is to get North Korea to give up its nuclear programmes as a prelude to normalising relations on the Korean peninsula. Many policymakers in America believe—against the evidence—that Mr Kim can be persuaded to do a deal. Some think that behind his antagonism lurks a desire for accommodation—and even an alliance.
A new book*, by Brian Myers at South Korea’s Dongseo University, shows just how wishful such thinking is. Dismissing what the North Korean regime tells the outside world, the author looks instead at North Korea’s domestic propaganda, the Kim family cult and the country’s official myths. From these he pieces together what North Koreans are supposed to believe. He concludes that Mr Kim’s power is based not just on surveillance and repression. Nor can its survival be ascribed simply to the effective brainwashing of the population. Rather, the personality cult proceeds from powerful myths about race and history.
Ideas of racial purity lie at the heart of North Koreans’ self-image. Since the regime’s founding, they have been taught to think that they are a unique race, incapable of evil. Virtue, in turn, has made Koreans as vulnerable as children. Korea’s history, the regime insists, is the history of a child-race abused by adults—Chinese, Japanese and American. Pure, spontaneous and naive, Koreans need a caring, protective leader. The upshot is the Kims’ peculiar cult, of state-sponsored infantilism.
You see no chin-thrusting depictions of father or son on the monumental streets of Pyongyang. In art as in life, both Kims are effeminate and podgy. Warnings against fleeing to China are conveyed as directed at a squirrel who wanders too far. In paintings, Kim Il Sung tucks children into bed. The nation lies at the “breast” of Kim Jong Il and his party. As commander-in-chief of the armed forces, Mr Kim is even called “Mother General”.
There is a precedent for this weirdly hermaphroditic parent figure: Emperor Hirohito in fascist, imperial Japan. Then Hirohito was depicted as the heart of a pure nation, which was ready to die for him because emperor and people were one. When Japan ruled Korea from 1905-45, racist ideologues said that the two countries shared the same bloodline. They were both members of the winning racial team.
After the second world war, Mr Myers recounts, Kim Il Sung kicked the Japanese off the team and pinched all their ideas. Former propagandists for the Japanese were set to work manufacturing North Korean myths. Mount Paektu was endowed with Fuji-like sacred status. Kim was painted atop a white charger, like one Hirohito used to ride. And, like Hirohito until Japan’s surrender, Kim Jong Il, like his father before him, was not heard speaking by his people in public broadcasts. To an extent, such fascism has worked. Many North Koreans see the mass robotic gymnastics of the Arirang games (which bore Kim Jong Il rigid) not as a grim Stalinist display but as a celebration of pure blood and homogeneity.
The counterpart to a childish state at home is a hostile world outside. For this Japan and, especially, imperialist America are essential. Mr Myers conveys well the intensity of race-hatred directed at America. Americans are chillingly scorned as miscegenated “bastards”, in contrast to pure-blooded Koreans. Again, myths are recycled from militarist Japan. Christian missionaries are said to inject innocent Korean children with fatal bacilli. The author valuably describes how propagandists depict diplomatic overtures by South Korea and America as quaking capitulations. Aid becomes tribute, so aid-bags stamped with the stars-and-stripes are tolerated when turned into use as holdalls. All this has a bearing as the diplomatic merry-go-round cranks up again.
Mr Myers wonders why Mr Kim would ever give up confrontation with America when his legitimacy rests upon it. After a deadly famine in the mid-1990s and, in recent weeks, a bungled currency confiscation, he has no interest in claiming to stand for material prosperity. Anyway, South Korea wins that competition hands-down. Rather, nuclear crises since 1994—and the detonation of a first nuclear device in 2006—allow him to present himself as the nation’s defender against aggression. In 2009 the country’s “military-first” policy, making the armed forces the nation’s highest priority, was even enshrined in the constitution. Fascism is Mr Kim’s last refuge. Giving up nuclear weapons would spell the end. So he negotiates with America not to end tensions, but to manage them: neither all-out war nor all-out peace.
What would bring the regime down, then? Thanks to the advancing creep of knowledge, North Koreans know that the South is richer by far. But the propaganda state has found a way around that. South Koreans may be rich, but they are desperately unhappy because they are under the thumb of the despised Yankees. Harder to deal with, by far, would be to find out that South Koreans are content in their republic.
http://www.economist.com/world/asia/displaystory.cfm?story_id=15579841
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North Korea's regime trips up
Market forces 1, brute force, 0
An embarrassing climb-down puts Kim Jong Il in a difficult position
However loathsome his neighbours find Kim Jong Il, the nuclear-armed North Korean dictator, most admit that beneath the big hair lurks the mind of a tactical genius with a flair for survival. At home North Koreans are smothered by his ruthless personality cult. Abroad, he is an adept blackmailer: act mad enough to be dangerous; then conciliate for cash.
Recently, however, he has made tactical mistakes on both counts. Diplomats think none is so serious as to endanger his regime. But the blunders give heart to those who believe they can eventually push North Korea back to talks about dismantling its nuclear arsenal. And they reaffirm the benefits of what Americans call “strategic patience”: waiting until North Korea is desperate enough to offer concessions.
Even the regime appears, in its own odd way, to have admitted the most recent blunder. News reports suggest North Korea has reversed some elements of a crackdown on private enterprise that it unleashed with a cack-handed redenomination of the won on November 30th. In the interim, the currency collapsed, the price of rice surged by as much as 50 times, and much of traders’ working capital for buying and selling goods was wiped out. As food distribution seized up, some rare grumbles of protest were heard.
But since early February, regulations on trading in the jangmadang, or markets, across North Korea appear to have been lifted. Implausible official prices have been posted—from 240 won ($1.78) for a kilo of rice (a bit less than a pair of socks) to 25 won for a toothbrush.
Meanwhile, the Dear Leader has made a perhaps unprecedented apology to his people for feeding them “broken rice” and not enough white rice, bread and noodles. He was, he said, “heart-broken”, and implicitly acknowledged he had violated an oath to his godlike father, Kim Il Sung, to feed the people rice and meat soup.
Adding to the poignancy, experts say the bungled reforms were done in the name of Kim Jong Un, the dictator’s third son and potential heir. His involvement may have been part of a strategy to reassert Stalinist-style state control of the enfeebled economy ahead of 2012, the 100th anniversary of grandfather Kim’s birth.
It seems unlikely the plan has been abandoned altogether, not least because the small markets that have flourished since the famine of the 1990s pose such a challenge to the state’s authority. But the ineptitude must have been glaringly obvious, even in the hermetic state.
“The government has never said sorry to the people, especially on a topic as sensitive as rice,” says Andrei Lankov, of Kookmin University in Seoul, a writer on North Korea. “Because of Kim Jong Il’s age and the age of those around him, it looks like he may be losing touch with reality.”
Mr Lankov has described North Korea’s leaders as brilliant Machiavellians. However, he believes there may have been a similar miscalculation in North Korea’s recent behaviour towards America, China, Japan, Russia and South Korea, the countries with which it started spasmodic “six-party talks” on denuclearisation in 2003. Its firing of a long-range missile and explosion of a nuclear bomb last year hardened the resolve of the five to strengthen United Nations sanctions against Pyongyang. However much Mr Kim has cajoled and coaxed since then, he has not yet achieved his usual success in dividing the five.
What’s more, diplomats say he seems increasingly open to a return to the six-party talks, which last year he vowed “never” to do. China, which is closest to North Korea and chairs the six-party forum, sent Wang Jiarui, a senior Communist Party official, to meet Mr Kim this week and invite him to Beijing. Mr Kim made no public commitment on the six-party talks, but his nuclear negotiator returned with Mr Wang to the Chinese capital.
Lee Myung-bak, South Korea’s president, surprised his countrymen by saying he, too, hoped to meet Mr Kim “within this year”. The timing was odd. His statement came as North Korea was lobbing artillery shells threateningly into the Yellow Sea. But it revealed what officials say is a twin-track process in Seoul to engage North Korea, bilaterally as well as in the six-party framework. Wi Sung-lac, South Korea’s special representative for peace on the peninsula, thinks the North is “moving in the direction of talks”.
Both North Korea and its six-party counterparts have set such tough conditions on coming together that it would be rash to expect too much. North Korea wants UN sanctions lifted, and a peace treaty with America to mark the formal end of the 1950-53 Korean war before restarting talks. America has resisted both. An East Asian diplomat says the other five nations are demanding that North Korea take “concrete measures” towards denuclearisation before talks and the lifting of sanctions. “We’re not giving any carrots.”
Underscoring the resolve, humanitarian assistance to North Korea has slowed to a trickle. South Korea sent only $37m of public aid last year, compared with $209m in 2007. Officials say Mr Lee is adamant no money will be spent coaxing North Korea to a summit. Talks on cross-border tourism and factories, another means for Pyongyang to extort hard currency from the south, have made no progress.
Mr Kim still has some trump cards up his sleeve. Tensions between China and America over Taiwan and Tibet provide a thread of disharmony to tug upon. And China has a strategic eye on North Korea’s ports and minerals, which some diplomats fear may encourage it to be overly generous to the regime.
But the mere hint of economic fallibility in a regime that demands almost religious devotion from its subjects may turn out to matter more than the diplomatic manoeuvres. It comes at a time when North Koreans, using smuggled DVDs and telephones, have a better idea than ever before of how far their living conditions fall short of their neighbours’. That is a rare point of vulnerability for Mr Kim’s interlocutors to exploit.
http://www.economist.com/world/asia/displaystory.cfm?story_id=15500671
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Sunday, March 07, 2010
Government Wants South Koreans to Take More Vacation
By EVAN RAMSTAD and JAEYEON WOO
South Korea Works Overtime to Tackle Vacation Shortage
The government here is cracking down on vacations: Workers, it seems, aren't taking enough of them.
South Koreans were told for decades to sacrifice everything to build the country's economy. Now South Koreans are world-champion workaholics, according to the Organization of Economic Cooperation and Development, logging more hours a year on the job than people in any other developed country.
.The government is trying to change that. The ministry in charge of government personnel issued a directive in January requiring the country's one million state workers to submit to their bosses a plan to take 16 days off this year.
The hitch: In a hierarchical society where superiors set the tone in business and politics, some of the very bosses behind the vacation push can't be bothered to take them.
President Lee Myung-bak raised the national vacation deficit at a cabinet meeting last summer, pointing to a survey showing that the typical government worker took only six of the allotted 23 days. Mr. Lee's personal tally since taking office in February 2008, according to media reports: four days.
..One member of Mr. Lee's cabinet, Unification Minister Hyun In-taek, told The Wall Street Journal he passed the government's vacation directive throughout his agency, which is responsible for South Korea's dealings with North Korea. But he has taken no vacation himself.
"I want them to take more time off," Mr. Hyun says. "But as for me? I don't know."
To cajole reluctant holidaymakers, the government has brought in the heavy artillery: a guy from Germany, home to some of the world's top vacationers.
Born there as Bernhard Quandt, he moved to South Korea in 1978 and became a naturalized citizen in 1986, changing his name to Lee Charm. Mr. Lee, who teaches language on TV, hosts radio shows, writes books and gives lectures about Korean culture, is one of the country's most visible foreign faces.
In August, Mr. Lee was named the head of the government-owned Korea Tourism Organization, whose 550 employees develop tours, promote the country and should, theoretically, know a few things about taking time off. A few months later, he called a company-wide staff meeting where he announced he wanted everyone to take at least two weeks off in 2010.
"I didn't take it very seriously," says KTO employee Seo Dong-woo, who helps plan tourism promotions and figures he's taken, at most, five days off in a year. "I thought: 'Is that really possible?' "
It wasn't. Mr. Lee's staff told him it was too much to expect workers to miss two weeks in a row, so the boss scaled the plan back to seven days off in a row.
Mr. Seo still hasn't finalized his own plans.
Many workers, and the country's media, have cheered the government initiative.
There's hope it will spill into the private sector, where vacation-shirking is also rampant. SK Telecom Co., a leader in tearing down old workplace hierarchies, says its workers take five to 15 of their available 22 days off. At LG Electronics, the average is 10.
Hyundai Heavy Industries boasted last month that its top managers would work mid-February's Lunar New Year's holiday, visiting foreign plants. "Every year Hyundai Heavy's top management carries out the MBWA (Management By Wandering Around) policy during national holidays and summer vacations to check project progress and to have meetings with owners," it said in a news release.
Some workers say they don't know what to do with the free time. Others are protesting the state's vacation push, accusing leaders of trying to save money: In many government agencies, employees are rewarded with extra pay for unused vacation days.
"You should be able to take a vacation whenever you feel like," says Yoon Jin-won, spokesman for the Korean Government Employees' Union, the biggest union of government workers. "When the government forces you to do it, I would say it violates human rights in a sense."
South Koreans worked an average of 2,316 hours in 2007, the latest year for which data are available. That's down from 2,592 a decade earlier but still well above the average of 1,768 for the 30 countries in the OECD and 1,794 in the U.S., according to the OECD.
South Korea's productivity, however, ranks below all but some former Soviet bloc countries among OECD members.
The KTO's Mr. Lee says he's trying to persuade South Koreans that vacation can recharge batteries and spur creativity. In interviews in the Korean media, he preaches the "three joys" of vacation—the joy of planning one, of being on one and of remembering it later.
South Koreans often miss that formula, Mr. Lee says. "They go when the opportunity arises, usually very spontaneously. And because they didn't prepare well, they have a lot of stress and usually have to pay more. And when they get back, instead of having nice memories, they feel tired and stressed out and think, 'Never again.' "
The government's focus on the vacation problem began when President Lee Myung-bak brought up the survey to cabinet members last July. Later, the culture minister began urging people to use their full vacation time, and the president appointed Mr. Lee, the naturalized German, to head the KTO.
But noncompliance can be found even at the core of the government's efforts. The official at the Ministry of Public Administration and Security who wrote and issued the 16-day vacation requirement last month was Kim Jin-soo, a director in the ministry's personnel management office. Mr. Kim says he took no time off last year.
When he and his staff got together to organize vacation days after his directive, others took time in January. Mr. Kim scheduled his day off for Feb. 1, a Monday, planning to use the three-day weekend to visit his hometown about three hours from Seoul. But then, Mr. Kim says, "Something came up so I couldn't go."
His sister, Kim Jung-ja, who planned to host him, says she wasn't surprised.
"Our mother passed away three years ago, and he couldn't visit often while she was alive, either," she says. "I think he is like the busiest person in the whole world."
So the author of the government's vacation policy deferred his planned time off to the big Lunar New Year holiday last month.
Contacted after the holiday, Mr. Kim said 43% of his ministry's staff added two extra days to the long weekend. He wasn't among them.
"There are so many things to take care of" at work, he said. "I am thinking about taking vacation in March."
http://www.careerjournal.com/article/SB10001424052748703382904575059120514572794.html ◦
Sunday, February 28, 2010
Monday, February 22, 2010
Is Korean Tech Losing Its Mojo?
How Korea, a onetime digital trendsetter, became a laggard in an era of smartphones—and amazing apps
By Moon Ihlwan
Seoul—For more than a year, Bae Jae Hyun wondered why her friends were so excited about the iPhone. She was happy with her Korean-made handset and puzzled by the desire for a phone that wasn't even available in the country. But when the iPhone arrived in Korea in November, it didn't take long for Bae to change her mind and buy one. "I now understand why they were so obsessed with it," says the 22-year-old student.
In December, Koreans bought some 200,000 iPhones—the best month ever in Korea for any handset model. In a country where domestic giants Samsung (005930:KS) and LG (066570:KS) together control 80% of the cell-phone market, that's quite a coup for Apple (AAPL). "The iPhone is so much better than any Korean phone I've ever seen," says Kim Ho Heok, a schoolmate of Bae.
The iPhone's popularity is a sign that Korea may be losing its edge in the international market, despite its reputation as the epicenter of digital cool. The country still rules in hardware, but it is stumbling in software. Samsung and LG, the No. 2 and No. 3 global handset makers, together manufactured nearly a third of the world's mobile phones last year, but their share of the smartphone market was just 4%. That's important because smartphones offer greater profits than traditional handsets, and they are increasingly popular with customers. The Koreans have rolled out models featuring touchscreens, high-resolution cameras, and TV. But they're often clunkier to use than rivals from Apple and Research in Motion (RIMM), maker of the BlackBerry.
Korea's software shortcomings are of growing concern to the country's political and business leadership. On Feb. 4, President Lee Myung Bak convened a special Cabinet meeting to address the issue. Ministers were told the country accounts for only 1.8% of the world market for software of all kinds, even though it dominates sales of memory chips, liquid-crystal displays, and flat-screen TVs. While Samsung sold 227 million handsets last year—10 times as many as Apple—its earnings were lower because its profit margins are much slimmer. "The government had been preparing to shift our focus to software from hardware for about a year, but the iPhone sensation provided a wake-up call," says Lee Sang Jin, who oversees the software division at the Ministry of Knowledge Economy, known until two years ago as the Ministry of Commerce, Industry & Energy.
"The Policy Backfired"
Seoul, which has long played a big role in guiding important industries, has launched a state-funded program to nurture software startups. The Ministry of Knowledge Economy is budgeting some $880 million to back software companies over the next three years. It aims to double the number of Korean software engineers to 300,000 in 2013 from 2008 and triple software exports to $15 billion.
A previous government attempt to boost the software industry was something of a dud. Seoul in 2005 required handset makers and content providers offering products or services in the country to use a Korean technology for Internet access instead of the programs used in most other countries. The rule was rescinded last year, but it clearly slowed the foreigners: The iPhone hit Korea more than two years after its U.S. debut. The downside is that Korean software writers were left with programs that worked only in their home market. As a result, they received scant exposure to the rigors of the global marketplace. "The policy backfired for Korea by stopping competition for innovation," says Chung Tai Myoung, an engineering professor at Sungkyunkwan University.
Software Successes
Samsung and LG say they intend to expand their smartphone lineups and offer more applications to run on them. "We have tremendously strengthened our software, which has been our weak spot," says J.K. Shin, president of Samsung's handset business. On Feb. 14, Samsung unveiled a software platform called bada ("sea" in Korean) to let outside developers create programs for its devices. And LG last December set up a unit with more than 800 programmers focused only on smartphones. This year the company expects to introduce about a dozen models using Google's (GOOG) Android operating system. "We are trying to offer more than the iPhone," says Skott Ahn, LG's mobile phone chief.
Despite the government's software worries, Korea has had some notable successes. Lineage, an online fantasy game made by Seoul-based NCsoft, has a cult-like following across Asia. Social networking service Cyworld, which was launched earlier than Facebook, is dominant in Korea. After eight years of offering Korean-language search, Google has just 2% of the market, compared with 64% held by Naver, headquartered in a Seoul suburb. And Qualcomm (QCOM) on Feb. 1 announced plans for a research center in Seoul to work on multimedia applications. "We see great potential in Korea," Qualcomm Chairman Paul E. Jacobs said at the time.
Yet when it comes to smartphones—perhaps the most important new sector in the technology business—young Koreans don't expect much from homegrown alternatives to Apple or BlackBerry. "I don't think I'll want a Korean phone in the next few years," says Yoon Ju Hwan, a 30-year-old fund manager who bought an iPhone in December. "We simply don't have the capabilities to create the kinds of things Apple does."
http://www.businessweek.com/magazine/content/10_09/b4168024781121.htm
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Friday, January 29, 2010
2010 Korea-America Student Conference
For more information, check out:
http://iscdc.org/index.php?option=com_content&task=view&id=42&Itemid=70
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http://iscdc.org/index.php?option=com_content&task=view&id=42&Itemid=70
Wednesday, January 27, 2010
Move to halt South Korea's education arms race
In a good many Korean schools it is perfectly acceptable for students to fall asleep at their desks and snooze through an entire morning of lessons. In some, it is actively encouraged.
This latitude is born not of negligence but of concern. For the state-school teachers know exactly where the children’s chronic fatigue was nurtured: in the madness of a parental arms race that has made a fetish of private cramming schools and pushed mainstream education close to dysfunction.
What the country needs — urgently, say some — is essay questions.
South Korean education is what happens when meritocracies and one-upmanship go berserk. Two monsters loom over the exhausted children of Seoul and the country’s other big cities.
On one side is a country straining to compete at a national level with the Asian titans of China and Japan: it is an economy where good jobs are getting more scarce and where educational accomplishment translates closely to social heft and long-term financial success.
On the other is an army of parents and grandparents with the cash and ambition to buy their descendants any small advantage in the great educational struggle. Children’s evenings and weekends are viewed as a resource to be tapped to breaking point; sleep is viewed — in the most extreme quarters — as weakness.
The undoubted beneficiaries of this arms race are the hagwons – private education institutes that prepare all ages of Korean children for the cavalry charge of exams that thunder down on them from the day they enter elementary school to the time they sit university entrance tests. South Korean parents spend fortunes sending their children to these schools, which has created a separate arms race. Parents send children to good hagwons to improve their chances of getting into even better hagwons that will in turn improve their chances of getting into better private schools and colleges.
Britain engaged in passionate national debate over whether to extend licensing laws to keep pubs open beyond 11pm. In Korea, a similar swell of emotion surrounded the question of whether hagwons should be allowed to stay open beyond 10pm. The late-opening proponents won; defenders of sleep lost.
Revolution may be around the corner, however, and it is starting to terrify parents everywhere. Beyond the punishing demands on children, one of the perceived flaws with Korean education is the rigid nature of the examinations: almost every subject is tested via questions that demand prodigious memorising and binary right/wrong answers.
The Seoul Metropolitan Office of Education has announced that it plans to make essay-style questions mandatory. It has two reasons for switching to this policy. The first is the belief that essays questions will prod Korean education out of its emphasis on rote learning. Essays, said a senior official, are needed to “create innovative minds” and test students’ ability to formulate arguments.
For a country eager to secure its future as a cutting-edge producer of electronics, biotechnology and engineering, that argument reflects national concerns that the country must do something to preserve its technological cushion.
The second, more tantalising, theory is that essays could break the spell of the hagwons. Essays are intrinsically harder to train for, definitely harder for hagwon teachers to predict and specifically outside the current teaching expertise of the cram schools. If the theory is correct, essays could be the secret of a good night’s sleep.
http://www.timesonline.co.uk/tol/news/world/world_agenda/article7002822.ece#cid=OTC-RSS&attr=797093 ◦
This latitude is born not of negligence but of concern. For the state-school teachers know exactly where the children’s chronic fatigue was nurtured: in the madness of a parental arms race that has made a fetish of private cramming schools and pushed mainstream education close to dysfunction.
What the country needs — urgently, say some — is essay questions.
South Korean education is what happens when meritocracies and one-upmanship go berserk. Two monsters loom over the exhausted children of Seoul and the country’s other big cities.
On one side is a country straining to compete at a national level with the Asian titans of China and Japan: it is an economy where good jobs are getting more scarce and where educational accomplishment translates closely to social heft and long-term financial success.
On the other is an army of parents and grandparents with the cash and ambition to buy their descendants any small advantage in the great educational struggle. Children’s evenings and weekends are viewed as a resource to be tapped to breaking point; sleep is viewed — in the most extreme quarters — as weakness.
The undoubted beneficiaries of this arms race are the hagwons – private education institutes that prepare all ages of Korean children for the cavalry charge of exams that thunder down on them from the day they enter elementary school to the time they sit university entrance tests. South Korean parents spend fortunes sending their children to these schools, which has created a separate arms race. Parents send children to good hagwons to improve their chances of getting into even better hagwons that will in turn improve their chances of getting into better private schools and colleges.
Britain engaged in passionate national debate over whether to extend licensing laws to keep pubs open beyond 11pm. In Korea, a similar swell of emotion surrounded the question of whether hagwons should be allowed to stay open beyond 10pm. The late-opening proponents won; defenders of sleep lost.
Revolution may be around the corner, however, and it is starting to terrify parents everywhere. Beyond the punishing demands on children, one of the perceived flaws with Korean education is the rigid nature of the examinations: almost every subject is tested via questions that demand prodigious memorising and binary right/wrong answers.
The Seoul Metropolitan Office of Education has announced that it plans to make essay-style questions mandatory. It has two reasons for switching to this policy. The first is the belief that essays questions will prod Korean education out of its emphasis on rote learning. Essays, said a senior official, are needed to “create innovative minds” and test students’ ability to formulate arguments.
For a country eager to secure its future as a cutting-edge producer of electronics, biotechnology and engineering, that argument reflects national concerns that the country must do something to preserve its technological cushion.
The second, more tantalising, theory is that essays could break the spell of the hagwons. Essays are intrinsically harder to train for, definitely harder for hagwon teachers to predict and specifically outside the current teaching expertise of the cram schools. If the theory is correct, essays could be the secret of a good night’s sleep.
http://www.timesonline.co.uk/tol/news/world/world_agenda/article7002822.ece#cid=OTC-RSS&attr=797093 ◦
Monday, January 18, 2010
Korean Food and Culture in New York City
Located on 32nd Street between Fifth Avenue and Broadway, New York`s "Korea Way" is the center for Korean cuisine, shopping and culture.
Though only one block long, the street adjacent to such tourist attractions as Madison Square Center, Herald Square and the Empire State Building features almost every aspect of modern-day Korean life, from Korean banks to "noraebang."
Until about 10 years ago, the street at the center of midtown Manhattan was not even as globalized as Seoul`s Itaewon area, as this bustling street didn`t attract many non-Korean New Yorkers. Recently, though, the street has been changing as an increasing number of ethnic non-Koreans are frequenting due to heightened interest in Korean culture, especially the food.
In fact, quite a few of Wall Street`s young financiers have their hangouts in "K-town." Walking along the street in the evening, it is easy to spot all sorts of folks in Korean restaurants chatting with their friends over glasses of Korean liquor.
"About half of our customers are non-Koreans. Although Chinese and Japanese customers account for much of the foreign customers still, I see more and more Americans come here recently," said Cho Min-chul, the manager of Gahm Mi Ok Korean restaurant at the entrance of the Korea Way.
Cho, who has been working for the well-known "seolleongtang" place for the past four years, said such changes are thanks to the continuous efforts by the Korean community in the Big Apple to make the country`s culture better known in the world`s hub for business, fashion, and the arts.
Every year, the association of Korean residents in New York City hosts the "Korean Parade and Festival," featuring floats, marching bands, Korean traditional dances and costume parades.
Cho said that there are other reasons. "Korean restaurants are known for quick service and good food. And they open until very late," he said.
Sometimes, quick service leaves customers with an impression that Korean food is slightly overpriced. "The food was great but I wish it was cheaper," said an American customer who introduced herself as Elizabeth, after finishing a bowl of bibimbap at the restaurant.
Though Gahm Mi Ok is best-known for seolleongtang among the city`s Koreans, Westerners rarely order the Korean delicacy. "It seems like they (Westerners) don`t like the idea of pouring a bowl of rice into the soup at all, with an exception of Russians who have similar recipes," Cho said.
Instead, a dish like bibimbap is much more popular among Americans who come to the restaurant. "I love it. It is yummy with good nutritional balance," said Elizabeth, a professional model who lives in New York`s Chinatown.
If Korean pop culture has contributed much to the increased popularity of Korean cuisine in Japan, it was Korean companies and business figures that have been behind the rapidly enhanced interest in Korean restaurants in Manhattan.
"There are almost no global companies based in New York that have no connection with a Korean company," said David Oh, general manager of Bann Korean restaurant, which is on the West 50th Street, near Broadway`s theater district.
At first sight, the restaurant looked different from other restaurants on the Korean street. With somewhat artful, vintage-style decor, it looks as if it was the kind of place where diners want to ask for a menu to see if it was within their lunch budget.
Inside, the hall is fairly open, tall and generally spacious. Each dining table is equipped with a grill, but, unlike that of many Korean barbeque places in Seoul, it is designed not to produce smoke while preparing "bulgogi" and other barbeque dishes, offering a more pleasant environment to eat and unwind.
"Many Americans are not accustomed to the self-preparing concept of Korean grills, so we ask beforehand if they want us to cook meat or if they want to do it themselves in the Korean style," Oh said.
Choi Young-sook, the owner of the restaurant, also runs three "Woo Lae Oak" Korean restaurants in the United States.
Opened first in the Los Angeles Korea town in the late `80s, Woo Lae Oak has taken the lead in enhancing the image of Korean restaurants by purusing a more refined atmosphere and service.
Among the customers of Woo Lae Oak`s New York branch located in SoHo, the stylish lower Manhattan neighborhood, are Hollywood celebrities including Tom Cruise and Keanu Reeves, as well as Rupert Murdoch, President and Chairman of News Corporation, who used to live near the restaurant.
When opening Bann, Choi intended to make Korean cuisine more accessible to New Yorkers, and thus came up with the name meaning "steamed rice," which is easy to pronounce and remember.
"I was shocked to hear a loyal customer of Woo Lae Oak in L.A. pronounce the name wrong," Choi told reporters when she visited Seoul last October.
Despite the comparatively short history, Bann is not far behind Woo Lae Oak restaurants in popularity. Although the former targets more of ethnic Korean customers, about 70 percent of its customers are non-Koreans.
Oh said that a large portion of the customers at the five-year-old Bann are either those who have reservations at nearby Broadway theaters for evening shows or high-salaried professionals from law firms and financial institutes around it.
"Pop stars such as Mariah Carey and Beyonce once came to have dinner here. But whoever comes here, we treat them the same as our famous customers," said Oh, who was also involved in Woo Lae Oak `s SoHo project as manager.
Oh left Seoul to settle in New York in 1976. He said that he was disappointed to see there were no Korean restaurant in SoHo, a thriving magnet for young expats, tourists and locals in search of a good party and the latest fashion trend. "There were Thai restaurants and sushi bars but no Korean restaurants, and as a food enthusiast, I took it serious enough to join the project," he said.
Besides Bann and Woo Lae Oak, more and more Korean restaurants have opened up in Manhattan, outside Korea town yet the future does not seem to be very optimistic.
"Running a Korean restaurant outside Korea town is not easy because one has to satisfy two very conflicting tastes at the same time. While Americans prefer Korean dishes with a mild taste and smell, Koreans like to have Korean food with maximum authenticity," he said.
Considering Korea`s overall position in the global business scene, Korean food is not very well-positioned in North America yet. According to a recent survey by Accenture, an Ireland-based global management consulting firm, Korean food ranked eighth in popularity among the food of 11 different countries (in China, on the other hand, Korean food was the most favored foreign cuisine in the same survey).
"Korean restaurants need to focus more on promoting the healthiness of Korean cuisine, giving up on the value for money approach," Oh said. "There are also things Korean restaurants in New York should work together for, such as unifying the spelling of the names of Korean foods on each of their menus."
(danlee@heraldm.com)
By Lee Yong-sung/Korea Herald correspondent
http://www.koreaherald.co.kr/NEWKHSITE/data/html_dir/2010/01/19/201001190047.asp
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Saturday, January 16, 2010
Can South Korea become a respected global power?
Selling South Korea
Lee Myung-bak wants to move his country to the center of the world.
By B. J. Lee NEWSWEEK
Published Jan 16, 2010
From the magazine issue dated Jan 25, 2010
For the first time in modern history, South Korea is laying claim to lead the club of rich nations. South Korea became the first member of the Organization for Economic Cooperation and Development—the group of 30 wealthy nations—to emerge from the global recession when it recorded 0.4 percent growth in the third quarter of last year. This year the OECD expects South Korea's GDP to expand by 4.4 percent, the highest growth rate of any of its members.
Now President Lee Myung-bak wants to turn the end of the economic crisis into an opportunity. He knows the crash has accelerated the decline of American might, as well as the rise of China and other emerging powers, and he aims to exploit the gap between them. His goal is to transform South Korea from a successful but self-involved economic power into a respected global soft power with the clout to mediate between rich and poor nations on global issues such as climate change and financial regulation. In particular, Lee is pushing to revive momentum on a global free-trade deal—stalled in large part due to hostility from poor nations—while defending the poor by pushing for more international supervision of the global financial system. At the same time, he is trying to establish South Korea as a leader in the fight against global warming by agreeing that the country will cut emissions by 30 percent by 2020—one of the most aggressive targets in the world—even though it is not obligated to do so because it is still considered a developing nation under the Kyoto Protocol. To many in South Korea, the selection of Seoul as the site of the November 2010 summit of the G20—the group of 20 leading economic powers—was an acknowledgment of how well it has managed the current economic and environmental crises. "The old order is being dismantled and replaced by the new order," Lee said from the Blue House in a televised New Year's speech. "We have to make our vision the world's vision."
Lee is one of only two former CEOs to lead a major trading power—Italy's Silvio Berlusconi is the other—and he runs South Korea like the just-do-it boss he was at Hyundai, where staff called him "the Bulldozer." At Hyundai he led a company known for fearless forays into foreign markets, whether it was building huge bridges in Malaysia or selling cars with stunning success in the crowded U.S. market. Now he is trying to make South Korean culture—still on the defensive after a long history of colonial occupations—as cosmopolitan as Hyundai's culture. He's pushing for greater use of English and generally trying to open up South Korea to the world. In his first big political job, as mayor of Seoul, he created a huge ruckus when he ripped up the downtown to expose a boarded-up stream—but it is now a major draw for commerce and tourism. Lee's grand domestic ambition as president is a multibillion-dollar plan to refurbish South Korea's four major rivers despite protests from environmentalists and opposition members. Lee believes the project will boost local economies by creating jobs and promoting tourism and commerce. Lee's popularity ratings, after an early plummet driven by a decision to allow U.S. imports of beef, are now at more than 50 percent as voters warm to his vision of newly developed South Korea as a model nation to be emulated by many developing countries.
South Korea's successful management of the economic crisis surely helps. Early on, the country was battered like the rest of the world. The South Korean won dropped 30 percent in the first three months of the crisis, the stock market dropped by half, and foreign investors left in droves. But unlike most other rich nations, South Korea had recent experience with a major financial meltdown. Many of its current leaders are veterans of the Asian crisis that crippled the country's economy in 1998, and they knew how to manage a free fall. Lee's team immediately moved to save threatened banks and companies by setting up $200 billion in various funds to guarantee payment of their debts and for other forms of emergency aid. They struck currency-swap deals with major economies like the U.S. to secure dwindling reserves of foreign currency and front-loaded public spending so that 65 percent of the country's $250 billion budget was spent during the first half of 2009, ensuring that the money got into the economy rapidly—but without adding new debts. A government focus on protecting jobs kept consumer sentiment relatively high, and the Bank of Korea cut interest rates by 3.25 percentage points to 2 percent, a historic low.
All the while, Lee worked relentlessly to quiet calls for protectionism at home and abroad, at a time when many other leaders, including Barack Obama and Hu Jintao, were beginning to succumb. Lee's administration is pushing for a slew of free-trade agreements with the U.S., the European Union, Peru, Colombia, Canada, Australia, and even China and Japan, if possible, says Abraham Kim, a Korea analyst at the political-risk consultancy Eurasia Group. Lee also lobbied hard at the Pittsburgh meeting of the G20 last year to have Seoul selected as the site of the next summit this autumn, an event he hopes to organize as a coming-out party. "He is trying to use the crisis to enhance the reputation of South Korea and help it to be widely recognized as a developed-world state," says Kim. "This is partly a nationalism thing, but more importantly, they are trying to get out from under Japan's and China's shadow. South Korea needs to find its niche for its long-term competitive survival."
South Korea was further protected from the crisis because its economy was built on pillars other than the collapsing financial-services industry. Decades of government efforts to nurture globally competitive conglomerates through massive infusion of capital had helped build export machines like Samsung, Hyundai, and LG. As the crisis unfolded, the weakening currency allowed these companies to expand global market share, especially against key Japanese and other rich-world competitors. As a result, South Korea registered a record trade surplus of $41 billion last year, surpassing that of Japan for the first time. South Korean companies and banks were also ready to compete because the crisis of the 1990s had forced them to improve corporate governance, get their finances in order, and invest heavily in new technology. "We just had to dust off the old measures we used a decade ago and use them again," says Vice Finance Minister Hur Kyung-wook.
In short, the South Korean model is a more mature cousin of China's—a hybrid economy, part free market, part state-controlled—but with more freedom for the market and for political dissent. Now Lee is positioning South Korea within Asia as a dynamic alternative to both China's mighty command economy and Japan's no-growth economy. In Southeast Asia, South Korea has long been admired for completing an economic miracle in just one generation, moving its 48 million people out of poverty and entering the ranks of fully industrialized nations, with average per capita income that surpassed $20,000 in 2007. And, unlike China, South Korea has achieved economic and political growth at the same time, with an increasingly well-established multiparty democracy that respects free speech and election results. South Korea, says U.S. Ambassador Kathleen Stephens, is "the best example in the post–World War II era of a country that has overcome enormous obstacles to achieve this kind of success."
Many Southeast Asian nations, alarmed by the harsh sides of the China model, look to South Korea as an alternative. Vietnam is sending civil servants there, studying how in the 1970s and '80s Seoul used massive government support, such as cheap loans, to develop strategic industries like steel and petrochemicals as the backbone of its export economy. As part of Vietnam's effort to develop capital markets, it also now runs a stock exchange in Hanoi, built with the help of the Korea Exchange. Officials from Vietnam, Cambodia, Indonesia, and Uzbekistan regularly visit South Korea to join training programs that teach economic and business management. "Developing countries are eager to learn South Korea's economic model because of its relevance to them," says Euh Yoon-dae, a Korea University economist currently heading a presidential committee to promote the national brand. "Our open economic system is more appealing to them than, say, that of China."
Surrounded by bigger powers—China, Russia, and Japan—South Korea needs to carve out a global role for itself to "ensure its prosperity and security," says David Straub, a Korea expert at Stanford University. So, in his first year in office, Lee made a point of systematically reaching out to foreign leaders in the United States and other major powers. The following year he headed to Europe. This year, Straub says, Lee is expected to target Africa. At the same time, he is upping South Korea's profile abroad, posting 3,000 volunteers from its version of the Peace Corps to Asia and Africa, where they will focus on public health and childhood education, with plans to increase that number to 20,000 by 2013. Last year South Korea officially became the first former recipient of international aid to graduate to the donor ranks, sending $1 billion to dozens of poor countries, and it plans to triple that sum within five years. Likewise, the number of troops it commits to U.N. peacekeeping operations will jump from 400 in 2009 to 1,000 this year and will work in roughly 10 nations, including Lebanon and Pakistan.
Lee has big plans for Brand South Korea, too. At Hyundai, he turned what had been a small contractor into a global manufacturing powerhouse. He speaks English, unlike his predecessor as president, and he is comfortable playing national pitchman. Just after Christmas, following six rounds of telephone calls with United Arab Emirates President Khalifa bin Zayed Al Nahyan and a last-minute visit to the country, Lee helped South Korea beat out a French and a joint U.S.-Japan consortium to win its biggest foreign contract ever: a $40 billion nuclear-power-plant contract in the U.A.E. While Hyundai and Samsung have overcome the perception abroad that "made in South Korea" still means poorly made, many other South Korean brands have not. According to a survey by Simon Anholt, a British expert on national branding, the country ranks 33rd in global branding power, although its economic size ranks 13th in the world. What's more, more than half of U.S. college students believe Hyundai and Samsung are Japanese brands. "Our job is to narrow the perception gap between the national and corporate brands," says Euh, the head of the branding committee.
Lee plans to build on that success at the G20 summit. He has already distinguished himself from his predecessors by embracing foreign investment and free trade, rather than focusing on rigid ideology, and he intends to use the meeting to showcase the rewards of that strategy. Lee's hope is that he can send a message to smaller, poorer countries, particularly in Asia, that South Korea's less insular, more global approach can be a model they can follow, too. Of course, as his opponents are quick to point out, the fate of his country will not change because the leaders of 20 advanced nations get together for a few days. But Lee says it is part of a larger effort to move his country "away from the periphery of Asia," as he put it recently, "and into the center of the world."
http://www.newsweek.com/id/231129 ◦
Tuesday, January 12, 2010
Seoul was ranked third on the NYT list of 31 places to go
Seoul was ranked third on the New York Times list of 31 places to go this year behind Sri Lanka and Argentina's Patagonia Wine Country.
The nation's capital was the sole East Asian city among the top 10 in the daily's annual picks for travel destinations.
"Forget Tokyo. Design aficionados are now heading to Seoul," the daily said. "They have been drawn by the Korean capital's glammed-up cafes and restaurants, immaculate art galleries and monumental fashion palaces like the sprawling outpost of Milan's 10 Corso Como and the widely noted Ann Demeulemeester store - an avant-garde Chia Pet covered in vegetation."
Seoul has emerged in recent years as a serious player in the design industry.
In 2007, it was appointed World Design Capital of 2010 by the International Council of Societies Design Alliance - a city promotion project that recognizes and awards accomplishments made by cities around the world in the field of design.
Other East Asian cities selected on the list were Shanghai at 12th and Shenzhen at 20th.
서울, NYT 선정 '올해 가봐야 할 명소' 3위
서울이 뉴욕타임즈가 꼽은 올해 가봐야 할 31개의 장소 중 스리랑카와 아르헨티나의 파타고니아 포도밭에 이어 3위를 차지했다. 동아시아 도시 중 10위 안에 여행지로 이름을 올린 것은 서울이 유일하다. 뉴욕타임즈는 또 “도쿄는 잊어라. 디자인 마니아들이 서울로 향하고 있다”고 전하면서, “이들은 한국의 수도에 있는 황홀한 카페와 레스토랑, 흠잡을 데 없는 미술관, 기념비적인 패션 매장에 끌리고 있다"고 보도했다.
http://www.koreaherald.co.kr/NEWKHSITE/data/html_dir/2010/01/12/201001120076.asp ◦
The nation's capital was the sole East Asian city among the top 10 in the daily's annual picks for travel destinations.
"Forget Tokyo. Design aficionados are now heading to Seoul," the daily said. "They have been drawn by the Korean capital's glammed-up cafes and restaurants, immaculate art galleries and monumental fashion palaces like the sprawling outpost of Milan's 10 Corso Como and the widely noted Ann Demeulemeester store - an avant-garde Chia Pet covered in vegetation."
Seoul has emerged in recent years as a serious player in the design industry.
In 2007, it was appointed World Design Capital of 2010 by the International Council of Societies Design Alliance - a city promotion project that recognizes and awards accomplishments made by cities around the world in the field of design.
Other East Asian cities selected on the list were Shanghai at 12th and Shenzhen at 20th.
서울, NYT 선정 '올해 가봐야 할 명소' 3위
서울이 뉴욕타임즈가 꼽은 올해 가봐야 할 31개의 장소 중 스리랑카와 아르헨티나의 파타고니아 포도밭에 이어 3위를 차지했다. 동아시아 도시 중 10위 안에 여행지로 이름을 올린 것은 서울이 유일하다. 뉴욕타임즈는 또 “도쿄는 잊어라. 디자인 마니아들이 서울로 향하고 있다”고 전하면서, “이들은 한국의 수도에 있는 황홀한 카페와 레스토랑, 흠잡을 데 없는 미술관, 기념비적인 패션 매장에 끌리고 있다"고 보도했다.
http://www.koreaherald.co.kr/NEWKHSITE/data/html_dir/2010/01/12/201001120076.asp ◦
Tuesday, January 05, 2010
Record snowfall blankets Seoul, South Korea
Buildings and houses are covered with snow in Seoul, South Korea, Tuesday, Jan. 5, 2010. Seoul residents slogged through the heaviest snowfall in modern Korean history after a winter storm dumped more than 28 centimeters (11 inches) Monday, forcing airports to cancel flights and paralyzing traffic in South Korea's bustling capital.http://tinyurl.com/y85spk3 ◦
Monday, January 04, 2010
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