It's been all over the news lately – the Korean government has chosen 17 new growth engines to lead the Korean economy to a new boom. Some people see it as a hope for a new future; others see it as something that needs improvement, while still others ask: why is the Korean government meddling in the private sector in 17 different ways
This state-mandated growth engine idea might sound a little too state-centric to some. A free market economy is said by many people to be necessary for the healthy economic growth of a country. Those countries with extensive state control over industry, such as China and Soviet Russia, do not have very good track records when it comes to economic issues. Why, then, is Korea, which is just about as democratic and capitalist a country as they come, federally mandating the industries which will run the Korean economy in the future
Well, while Korea is a capitalist society, it has only been that way for the past fifty years. During those last fifty years, it has achieved astonishing growth, transforming from a mostly agricultural country to a leading shipbuilding and electronics exporter. Per capita income, as a leading indicator of Korea's growth, has gone from US$100 to US$20,000 during that time. And they have done it with close governmental oversight.
Ask anyone on the street in Korea about the economy and they'll tell you the same thing: Korea has no natural resources; the only resource is its people. Because of the uniform nature of the responses it sounds like something that has been drilled into high school students, or over and over again in public speeches. This is why mothers send their children to so many after-school study programs, while fathers work until 9 or 10 pm. That is why the country has focused on laborintensive manufactured goods as exports. While it is difficult to speculate on the origin of an idea, it probably began at the same time the centrally-planned industrialization of the country did, since the two ideas are related. Park Chung-hee, a controversial early leader of post-war Korea, is said to be responsible for the transformation of Korea into the industrialized nation it is today, and is probably responsible for the idea of people being Korea's only resource.
Korea's rapid, centrally-planned rise to industrialization by a charismatic and controversial figure who potentially indoctrinated the country with a strong tolerance for a centrally-planned economy is the same story that many developing nations have to tell in order to get where they are, and Korea is, or was, no different. As a developing nation it made extraordinary sacrifices to achieve what it has achieved. However, as a developing nation's economy matures, governmental influence usually lessens and fades into the background, providing simply a standardized stage and props for normal economic performance. Where does Korea lie
It seems that Korea still lies somewhere in the middle between industrialization and maturity. The growth of the Korean economy in the past ten years has slowed. Even before the economic crisis, unemployment for young people and the elderly was a problem. The government is said to have been looking for Korea's market to autonomously create new business sectors, but the growth of new com panies and industries has been disappointingly slow, too slow to keep up with employment needs. The Korean government has decided that the market still needs help to create new industries, so it will intentionally nurture new R&D, try to create initial-stage market growth, deregulate problem areas in bureaucracy, and even help train people to work in these new areas. That, in a nutshell, is what the 17 new growth engine plans are all about.
What's in the details
It's been said before, but bears repeating. The seventeen new national growth engines are divided into three categories -green technology, fusion industries, and high value-added industries. The green technology category contains new renewable energies, low-carbon energies, new LED applications, green transportation,
and one more category that has not been explicitly spelled out. The six fusion industries have not been plainly listed, but are reported to include things like IT fusion systems, robotics applications, and biomedicines. High value-added industries are the third category, which include things as diverse as the tourism industry, green financing, global educational services, global healthcare, and expositiontype events. A quick count will show that while there are technically seventeen growth engines, a few are a little sketchy and four are absent completely from official government reports.
However, the fact that they are not explicitly defined will not stop the government from throwing money at them. The government has set aside 6.3 trillion won (US$4.6 billion) for R&D projects over the next four years, while increasing research funding for original technologies to 700 billion won (US$510 million) in 2012.
The vague nature of the 17 new growth engines has also not prevented the government from making predictions about their expected value, which they project at 700 trillion won (US$510 billion) by 2018. Also, exports are predicted to increase 18 percent annually, and the new growth engines will create 3.5 million new jobs in the next ten years.
Where does it end
There's nothing that warms the heart quite like governmental promises. If the predictions of the new growth engines come true, in 2018 Korea will be a country with a robotic workforce that maintains its wind farm arrays and solar panel fields while people go zipping by in their zero-emissions cars on their way to their high-technology jobs. LEDs will be the preferred lighting style, with an almost infinite selection of tasteful arrangements for any occasion. Hospitals and educational institutions will be the finest in the world, and millions of people will come to Korea to tour the world's most sciencefictionalized nation, to visit the Robot World in Incheon, or to have a convention on one of Korea's many first-rate convention and hotel complexes. IT will be even more a daily part of people's lives than it is now, with a converged device that communicates in any way people would like.But in 2018, will the government allow the private sector to follow its own path and forge its own innovations Will an industry trained for, by then, 70 years to receive direction and funding from the state be able to support itself Only time can tell.