Korea commits to creativity

In my previous blog I talked about the speed of getting through Singapore’s Changi Airport – a record that South Korea managed to crush. Upon arrival at Incheon Airport – an hour’s drive from Seoul – it took just five minutes for me to retrieve my suitcase and get the all familiar stamp in my passport, ready to take a taxi to the city. President Obama arrived an hour after me from Japan en route to Malaysia, but he probably didn’t need a stamp…

Jeroen Plag Unlike other countries in Asia, Seoul is not known for its smog or air pollution. Yet, there was a pall hanging over the city. The reason became clear when I arrived and read the local English-language newspapers. The tragic Sewol ferry accident, which claimed the lives of mainly children, is the subject of national mourning across the country and in Seoul, where yellow ribbons have been strung everywhere as a sign of support for the families who lost their children. The prime minister resigned today following criticism of the slow rescue efforts, while a large-scale investigation is being conducted into the ferry owner and the cause of the accident. Reportedly, the owner was engaged in dodgy business dealings. There is speculation about the legitimacy of the permits to renovate the ferry, called ‘deachung daechung’ in Korean. While it is not uncommon to flout the rules in South Korea, people are now openly critical about the practice after the terrible accident. This was evident during a recent large-scale protest, which didn’t make the news or papers...

 

In this blog, published on 11 May on the website of ‘Het Financieele Dagblad’, Jeroen Plag, Head of Client Coverage Asia, Americas & UK for ING, writes about his recent visit to South Korea in the wake of the Sewol ferry disaster. He observes that South Korea struggles with creativity, which is a spearhead of President Park’s economic policy, as the focus of the economy until now has been on replication. Jeroen also talks about the country’s overseas trade focus, based on conversations with clients during his visit, and its creative initiatives to attract an inflow of Chinese shoppers and so-called driving licence tourists.

What makes this tragedy even more painful, according to the media, is the reason why so many children drowned. Apparently, when the ferry capsized they were told to put on a life jacket and wait for further instructions. These never came. Given their strong sense of hierarchy, the children did as they were told and followed the instructions of a superior, in this case the captain. My visit showed this is not unusual here, where processes with clear instructions are executed flawlessly. But an out-of-the-box brainstorm session about a strategic direction was far from easy.

 

Creativity is suppressed at school, where the focus is on rote-learning. That’s why it is a focus area of South Korea’s President Park’s economic policy. The country has made fantastic strides in production, with names like Hyundai and Samsung, but now needs to focus on creativity and the services industry. Export remains a driver of economic growth, but has become more challenging given the strength of the South Korean won. Nevertheless, my plane from Seoul to Shanghai was packed with Chinese bargain hunters carrying far too much hand luggage and flashing all kinds of luxury clothing and labels.

 

The South Korean focus on foreign markets, with Africa unsurprisingly a main target, also became clear from my conversations with several large internationally-operating South Korean construction companies. Among the new focus areas are Kazakhstan and Turkey but especially Uganda, Mozambique, Ghana and Gabon. A number of our clients see great potential here in infrastructure and oil and gas, compared to South America and the Middle East.

 

In South Korea itself there are also interesting developments. In addition to the inflow of Chinese shoppers mentioned above, other streams of tourists are flowing in, including those coming for the sole purpose of obtaining a driver’s licence. A recent article in The Financial Times reported that Chinese nationals can get a driver’s license in Korea with no waiting period and for half the price. There are presently 70,000 Chinese drivers with Korean licenses. Casinos are expected to open up another flow of tourists. As in Singapore, casinos were not welcome under former president MB Lee. Now, South East Asian investors have signed contracts to invest billions in building giant casinos or possible integrated resorts (!). A European toy manufacturer will soon begin constructing a large amusement park.

 

Departing from Incheon Airport for the next stop of this trip, to Delhi via Shanghai, my flight to Shanghai was delayed. As this would only leave me one hour to transfer to Delhi, it was looking pretty tight. The ground stewardess suggested I take an earlier flight that had also been delayed but hadn’t left yet, which meant I had to run to the gate! Whether my suitcase arrives in Delhi via Shanghai remains to be seen, but I did appreciate the creative solution…

 

Follow Jeroen on Twitter: @JeroenPlag

 

Initially published by Dutch daily 'Het Financieele Dagblad', with permission re-published by ING.