Read an Excerpt
INTRODUCTION
About a mile from Kyungbok Palace in northern Seoul, South
Korea’s frenetic capital, a narrow road winds up a hillside, past a
small police station, a school, and a children’s library. Near the top
of the road, a parking lot leads to a steep set of stone steps. At the
top of those steps you’ll fi nd an ornate pagoda that was originally
built in 1898 on the orders of Emperor Gojong, who once ruled over
the Korean peninsula. This place is called the Hwang Hak Jeong,
which means Yellow Crane Pavilion. It is a traditional Korean
archery range.
On a weekday afternoon in March 2009, Park Min-young, a law
professor at Dongguk University, stood on a platform below the
pavilion, gazing off toward a set of tall wooden targets 145 meters
away. The platform also offers a clear view of the surrounding city
landscape, including the central government complex, the U.S. Embassy,
the Dong-a-Ilbo newspaper building, and the endless rows of
high-rise apartment buildings that are home to Seoul’s 10 million
people. Standing alongside Park are a half dozen men and women,
all holding laminate bows in their left hands. Around their waists, a
bright-colored sash holds fi ve arrows.
Park, who is in his early fifties, has been doing archery since
he was about eight years old. His grandfathers did it. So did his
father and uncles. So do his sons. Korean archery, called kuk
kung, is different from other types of archery practiced around
the world. It utilizes a short bow (traditionally made out of oxhorn)
that bends significantly. The arrow (traditionally made out
of bamboo) travels a considerable 145 meters (compared to 70
meters in Olympic archery) and forms a bell-curve-like trajectory
(whereas most other archery styles create a straight linear trajectory).
The key to kuk kung, because of its idiosyncrasies, is
mental discipline. A kuk kung aficionado spends decades firing
millions of arrows at the distant target before earning the title
of master.
Park comes to the club about once every two weeks. When
he does, he always practices on his traditional horn bow with
bamboo arrows. Most of the others use newer laminate bows.
He plays for exercise and to get away from the hectic lifestyle
in Seoul. But most of all, he says, “We do this for our traditional
Korean spirit.”
Park’s voice is filled with pride as he talks about the rich history
of Korean archery. He knows that Koreans have excelled at
archery since before Korea was its own country. He knows that
the sport requires deep mental skill and a work ethic that Koreans
have long ago mastered. And he also knows that the Korean spirit,
exemplified in the success in both traditional and Olympic-style archery,
is the key to the economic success his country has seen in its
young existence.
Indeed, Korea’s work ethic and collective spirit have been the
backbone of the country’s economic growth since the 1960s. Forty
years of spectacular growth and transformation catapulted Korea
to the status of an industrial powerhouse and the fifteenth largest
economy in the world, according to 2008 World Bank data, despite
its small landmass.
That growth came from centralized planning, an emphasis on
exports, ambitious industrialization goals, and a dedicated, well-educated
labor force. Let’s call that initial growth trajectory Korea
1.0. It succeeded beyond the wildest dreams of President Park Chunghee
when he unleashed the economic juggernaut on the world in the
early 1960s. Korea 1.0 specialized in building cars and ships—big
brawny industries that took advantage of the country’s disciplined
work ethic and its low wages.
The work ethic is still there. But the low wages are gone. South
Korea now has a per capita income that is greater than $20,000
per person. That puts it in the league of the European countries
and within striking distance of Japan (where per capita income is
$38,000) and even opens up the door to competing with the United
States (where per capita income is $47,000).
The fundamental problem Korea faces today is how to continue
to progress and elevate worker income from $20,000 to $40,000
while competing against low-wage countries like China and India.
The rules of Korea 1.0 will no longer work for the next phase of the
country’s economic growth.
Despite the fact that most people still think of Korea 1.0 when
they think of Korea at all, Korea 2.0 is already here. The economy
is now dominated by new industries, such as entertainment, software,
and telecommunications equipment manufacturing. Such
businesses promise higher average wages, but they must be cultivated
slowly and carefully—they can’t be created from the edict
of a president in the way that Korea 1.0 conjured up its steel and
auto industries.
The culture and society of South Korea have also changed significantly
in the last ten years. The ethnic homogeneity of the country
has been replaced by a form of multiculturalism as more foreign
laborers and more executives and their spouses have made Korea
their home. In addition, women are moving into the workforce at a
growing rate, leaving behind their roles as homemakers, so the traditional
social structures are crumbling fast.
But Korea 2.0 is not entirely different from Korea 1.0 because the
country continues to maintain ties with the past. In Korea, history is
always a vital part of the present. That’s why we start this book with
an examination of how history has shaped, and continues to shape,
the country. The division of the peninsula into two countries—one
democratic and the other communist—has been one of the most
important aspects of South Korea’s past, and promises to be remain
critical to the country’s future.
Part two of the book deals with economics and trade. We delve
into the economic catastrophe of 1997–98 and then explore South
Korea’s relationship with Japan, China, and the United States. Then,
in part three, we also look at specific industries, such as the automobile
sector, and individual companies, such as LG and Samsung.
These chapters put the focus on a much smaller subject in order to
learn the larger lessons they can impart for understanding Korea
as a whole.
Part four of the book explores modern Korean society, including
its obsession with golf, what it is like to work for a Korean firm, and
how Confucianism dominates the cultural landscape of the country.
Business moves at an incredible pace, but it requires a social
finesse and patience in relationship building that Westerners may
find confounding.
The book concludes with a look at the future. The first chapter in
part five deals with the future of North Korea—an extremely important
issue for the entire peninsula—and lays out four hypothetical
courses for the communist country. The final chapter of the book
explains what further leaps must be made to arrive at Korea 3.0,
which we define as the complete development of the economy to
the point where Koreans stand on an equal economic footing with
the United States.
