A Battle for the 'Seoul' of South Korea's Economy (Page 2 of 2)

Moving Korea toward more innovative production will require two major changes, perhaps so enormous they should be called cultural. First, Korean education needs to emphasize creativity and free-thinking more. Far too much pre-college training focuses on the rote recitation of answers with little underlying comprehension. Math and science may be conducive to this kind of learning, but it is disastrous when applied to the humanities and social sciences. It encourages an intense “copying culture” in which the instructor’s thoughts are treated like ideal answers to open-ended questions and parroted back. This is the single most challenging part of my job as a professor in South Korea.  Ask any foreigner instructor in Asia what her biggest challenge is, and she is likely to say plagiarism. Plagiarism extends to the highest levels of Korean academia and is the biggest reason why Korea still lacks a globally ranked university. Its therefore hardly surprising that Apple accused Samsung of plagiarism.

More generally, Korea needs to develop much greater respect for IPR. Mimicry may be the highest form of flattery, but in post-industrial economies, it is also increasingly a crime. Because industrial production is moving to BRIC-like countries, companies in wealthy states increasingly generate their revenue from innovative services and useful information. Because Korea has not yet fully moved into the information economy, the costs of e-piracy feel invisible. But there already has been one major casualty: gaming-obsessed, chaebol-friendly Korea lacks a major recognizable gaming label like Namco or Activision. Domestic downloading pirates profits away, and console gaming has flopped as consumers eschew paying full price in stores. (This is also what destroyed DVD and Blu-ray sales in Korea, damaging those creative industries as well. The Korean penchant to download almost everything will generate increasing trade friction, particularly under new free trade agreements (FTAs) with the U.S. and EU. And Asian firms that engage in egregious copyright infringement will increasingly become litigation targets, just as Napster was eventually shut down for copyright infringement.

The second big shift Korea needs to avoid more IPR litigation is greater decentralization of its economy. The extreme oligopolization of Korea’s economy by chaebol is destructive in many ways – it encourages rent-seeking, facilitates political corruption, generates a too-big-to-fail mentality, and inhibits a proper currency float. It also discourages innovation. Large firms that permanently and effortlessly dominate their markets become complacent, bloated winners with obvious incentives to keep competitors out and prevent changes that might damage secure revenue streams. A very obvious example is Microsoft, whose operating software monopoly led to the complacency that generated the awful Vista. Microsoft attempted to keep out competitors with gimmicks like purposefully making Windows difficult to use with non-Microsoft software.

Korea’s biggest companies are in a similar position, which is why innovation, even in Korea’s strongest sectors, rarely comes from Korean firms. Chaebol may perfect extant technologies, but they lag at pioneering innovations, largely because disruption does not benefit these gigantic established winners. Rising challengers shake-up markets with clever innovations, but the extreme concentration of Korea’s economy almost deliberately quashes local “animal spirits.” The cell phone industry is an excellent example. Dominated for years by KT and SK, the market was stagnant, with dull flip-phones whose primary innovations were gimmicky colors and lights, while the U.S. phone industry had already entered the smartphone era with products like Blackberry. When the iPhone hit and Koreans learned of it, Korea’s telecom oligopolists panicked. They pressed the Korean government to maintain a protectionist security standard to prevent the iPhone’s arrival for two years, while Samsung effectively reverse-engineered the iPhone to create a competitor. In the end Samsung’s reputation was tarnished and Korea’s consumers spent almost five years without smart phones that Westerners had long taken for granted.

Samsung-Apple is just the beginning of Korea’s troubles as it enters into the mature world of OECD competition, where information is frequently a copyrighted product. The media’s nationalist response that the lawsuits are anti-Korean protectionism ignores both the long history of Korean mercantilism and the importance of patent protection in modern economies. The piracy damage to Korea’s digital industries, like gaming and DVD, are a case in point. Koreans are no less creative than anyone else, but their education system and economic structure strongly encourage copying over innovation. If this does not change, expect more lawsuits.

Robert E. Kelly is an associate professor of international relations in the Department of Political Science and Diplomacy at Pusan National University in South Korea and Senior Analyst at Wikistrat consulting. More of his work may be found at his website, Asia Security Blog

March 17, 2013 at 14:50

I agree. As I've commented on the Facebook link, South Korea was ranked second for innovation by Bloomsberg in 2012. It is ridiculous to say the economy is built on piracy and copying. Absolutely ridiculous.

It is amazing how the issue of Samsung vs. Apple has clouded so many people's views of a whole country.

December 3, 2012 at 06:15

We understand that rounded corners are not the only thing that apple is suing samsung of infringing.
BUT, it is one of the accusations that apple is making, which is just f'ing absurd.

December 3, 2012 at 06:13

@ Ryan,
Dude your a retard, Hyundai was around before Honda was.

November 28, 2012 at 01:34

Jean Paul,
Are Asian cultures inferior or do they just have a massive head start?  I guess time will ultimately tell.

November 28, 2012 at 01:32

FYI, I am an American citizen.  South Korea is not "my" country.  I am commenting on a flawed and unfair article.  Again, you can't use academic practices to demonstrate business realities without formally connecting the two with supporting evidence.  That would be bad scholarship.  Do you not agree?

November 27, 2012 at 16:18

His is not a unique view and many others have seen similar issues.
If enough people view and say the same thing then when does it become the norm?
I understand your feelings as no one wants to see their nation criticized. Though in my experience as well, copying and using others knowledge as your own is seen as normal in South Korea.
Was it in this case? I guess we will never truly know as those who did it, will never say.

November 27, 2012 at 16:14

You are so ignorant.

November 26, 2012 at 14:13

rare to see a diplomat article written not much above a typical blog post's comments section in intelligence.
john chan is unfortunately doing a disservice as his correct stances couched in hypernationalistic pan-asian brotherhood terms comes off as childish. more ebooks are being written (and pirated) in "unoriginal" china than in "daring avant-garde" america

November 25, 2012 at 08:05

Not necessarily. If you take the example of two Korean tech companies, the founders/owners are highly associated with the product or company. Ahn Lab is synonymous with its founder Ahn, Cheol-soo and the first name that is associated with Samsung Electronics is Lee, Kun-hee. Not only that, Koreans tend to credit these men for the success of their enterprises.

Jean Paul
November 24, 2012 at 01:21

See that is the problem with a lot of these asian cultures, especially the korean and chinese cultures as they are very similar and close in proximity to eachother. They always say how hard they work and how lazy the west is, however what they do not understand is that their cultures are so strict, so overbearing and almost militaristic in nature.
Having such a monolithic oppressive culture suppresses creative thinking and only leads to a stressed out, over-worked, underpaid population. I really feel sorry for all these chinese posters, no wonder they are always so hostile, it is because of their culture. Until the asians can finally free themselves from this culture and accept the western culture as superior, they will always get stuck in the middle income trap.
Look at the per capita rate of nobel laureates among the various nations, the top 20 per capita is dominated by the west, so now we know that the "lazy" westerners are much better off, they work less and still have better education and technology as well. Here is the link for proof that asian culture is inferior in many ways http://en.wikipedia.org/wiki/List_of_countries_by_Nobel_laureates_per_capita

November 23, 2012 at 13:53

Prof. Jones,
Thank you for your thoughtful comments.  You have first hand experience in Korean post secondary education so there is no need for me to comment on your expertise.  However, because you may see a lot of plagiarism and copying in academia, is that enough evidence to say that Korean companies copy, at least as wholesale as the author says?

November 23, 2012 at 08:14

I would ignore most of the comments as many of them seem to be from Chinese posters who seem to either be paid to make complaints or feel inferior in some way and need to promote their hatred of anyone different to them.
There were a few good points by WangKong936, but other than those most were simply the same old issues you can read on Global Times or any other issue posted on here. The own goals by China seem to be the only posts that are very quiet in terms of Pro China posts.

Prof. Jones
November 22, 2012 at 22:51

What you are all missing is that myself, as a educator in Korea's Secondary Education… Can see these issues very easily. In teaching business my core class competency in which i have an MBA. Korean students seem unable to grasp the critical thinking and rehtorical themes that are needed. They continue the leader/follower model of learning and I would like to argue that when I have consulted with korean companies on how to improve productivity they run a 1950's style Iron fist managerial style. Long hours, I can't leave until my boss leaves. It's not uncommon for the husband, in a korean family not to see his children during the week. As he will leave at 7am for work, work until 8-9pm and then have "mandatory" dinners and drinking as it's cultural and then arrive home after midnight to do the process again the next day. This 12 hour work day in the office is seen as "hard-working" however it's "looking busy" not actually productive. When this is mentioned in my analysis that workers are "strung out" and "exhausted". I get the "my workers are strong" rhetoric and "they don't need a break"…  These are not business models that encourage creativity… I have seen it first hand, my korean professors slam the students with hours upon hours of busy work. Feeding the "rote learning and plagiarism" that is a problem.

I have seen direct, direct quotes from scholarly works, THANKS SAFEASSIGN,  taken as their own. When I show them that they have plagiarized they say, with bowed heads: "Professor, I am sorry."..and look at me as if it's okay and I should let it slide. Of course, I do not let it slide, and give them the score of a cheat. A big fat 0.00… At the end of the semester they come asking me why the passed with a C, and I say well you got a 0 on your essay or report. They say this is unacceptable and they demand that I make a compromise. Many, are shocked I would even think to do such a thing as hand out a 0 for copying. YES, this is the mentality of the secondary institutes. Copying is ok, as long as you get an A…

So, although this article misses a few areas and makes some rather rash judgements and he may not be a business expert, I can certainly see the points he brings up are logical and relevant to what will be facing Korea in the future. 


Share your thoughts

Your Name
Your Email
required, but not published
Your Comment

Sign up for our weekly newsletter
The Diplomat Brief