The Story of One “Vision”
Korea has established itself as an emerging Knowledge Economy powerhouse in a remarkably short period of time. Yet, many believe its experience has limited relevance to other countries. Success of such transitions in Asian countries, the conventional wisdom claims, rests solely upon peculiar arrangements allowing governments to authoritatively impose “progressive” top-down policies on businesses and society at large. Korea ’s transition towards knowledge-based economy is not such a story.
The Bright Side of Crisis
Beginning of Korea ’s interest in knowledge economy can be traced to … Mexico. Its financial crisis of 1995 was just an unfortunate event in a remote country for some, and a strong wake up call for others. Is a similar crisis possible in Korea? - asked the Maeil Business Newspaper (MBN), one of the major media groups in the country. “Very much so” – was the answer from its joint report with Booz Allen & Hamilton, Vision Korea Report, Revitalizing the Korean Economy Towards the 21st Century. The report was published in October 1997, coinciding with the crisis it was warning against.
The report identified several key challenges: (i) wide-ranging systemic impediments, particularly in the financial and labor markets; (ii) a managerial and technical knowledge gap; and (iii) the need for a strategic response to the tightening competitive nutcracker – being caught between China’s low costs and Japan’s technical excellence. While the government response to crisis was focused mainly on effectively addressing immediate systemic issues, such as strengthening anti-corruption and competition policies, the Vision called for a strategic shift – for Korea to become knowledge-based and globally connected economy.