“The crowd should play a leading role in the nation’s efforts to turn the S. Korean economy into a bona fide creative one. And the formation of five types of platforms - finance, consumption & distribution, technology, education and health care services – should be given priority.”
Kim Soo-dong, Co-head of the Korea Association of Science and Technology (an association of 21 S. Korean science and technology institutes, which had played a pivotal role in setting up the Ministry of Science, ICT and Future Planning since the lead-up to the emergence of the Park Geun-hye government), has been working to a very tight schedule, often juggling several tasks at once. Kim’s moves to flesh out the government’s “creative economy” vision have recently kicked into high gear. Kim, who is busy serving as a standing advisor at HBL Law Firm (a Korean law firm located in Seoul), has been heading up the Korea Institute of Digital Finance’s efforts for crowdfunding-based financial platforms at 'Creative Korea 2013', a convention scheduled to be hosted by the Ministry of Science, ICT and Future Planning on December 12 through 15. To that end, he is also presiding over preparatory meetings for Creative Korea 2013.
“The creative economy we need now is not something that is maneuvered by the South Korean government, but something that is led by the crowd’s voluntary participation. Therefore, the government’s efforts to move forward with its creative economy agenda should be focused on creating a place for communication (e.g. SNS), where the crowd’s voluntary participation and smooth communication are naturally induced, rather than resorting to enforcing new laws or policies,” Kim told Korea IT Times on November 19.
Q: What does the creative economy envisioned by the South Korean government look like
Under the creative economy envisioned by the government, the crowd, not the government, companies or banks, take the lead in sorting out companies armed with unrivaled technologies and ideas and investment-worthy projects in areas of finance, consumption & distribution, technology education and health care services. I believe that building economic platforms, on which individuals network, voluntarily pool their money to finance efforts initiated by other people or organizations and eventually reap the fruits of their investments, is the centerpiece of the creative economy envisioned by the government.
Still, too much remains to be done to turn the Korean economy into a creative one. For instance, when an individual tries to get a bank loan, decisions on whether the individual is eligible for a bank loan, how much the individual can borrow and how much interest the individual should pay, are, in most cases, automatically made according to the individual’s creating rating set by credit rating agencies in connection with the bank the individual tries to get a loan from.
Viewing this procedure from slightly different angles got us thinking: why are inflexible, uniform yardsticks applied indiscriminately to evaluating each individual’s ability to pay back the debt by making timely interest payments Let me take another example. At first glance, large companies’ vying against mom-and-pop stores on a level playing field in honor of free economy principles can be viewed as a reasonable practice based on free market principles. However, such unlimited free market competition is not so much laissez faire as an abuse of free market principles.
Viewing competition between large companies and mom and pop stores as fair matches is like boxing matches arranged without regard for weight classes and like pitting a grown-up against a child in a boxing ring. Thus, for the sake of forging mutually reinforcing relations between large companies and SMEs and turning South Korea into a genuine welfare state, the Park Geun-hye government’s efforts for economic democratization should materialize to put in place reasonable rules and frames.
Q: Then, what does the nation has to do to push the creative economy agenda in the right direction
In areas of finance, consumption & distribution, technology, education and health care services, the crowd, not the government, companies or banks, should take the lead. In the process, the government’s job is to provide the public ample communication channels and to make sure that the main driving force behind the creative economy initiative is the public’s voluntary participation. One of the major props for the creative economy agenda is crowdfunding.
Lexically speaking, the term “crowdfunding” (alternately social funding), which refers to mass funding efforts through which large numbers of people can exploit social media to finance businesses or projects, is a portmanteau word - a combination of the words “crowd” and “funding.” However, in actual terms, crowdfunding can be defined as a new-concept investment service in which large numbers of people network and pool their money to finance companies or projects in hopes of ROI (return on investment).
In other words, crowdfunding is a system where the public, the main players in areas of finance, consumption & distribution, technology, education and health care services, use online blogs or SNS platforms to take their pick of desirable investment targets across varied industries (including culture, art, design, sports and science) and to share the results of their investments with their SNS buddies.
In addition, crowdfunding is in line with the Park Geun-hye government’s creative economy agenda, which aims to create a virtuous cycle (starting a business → business growth → ROI → reinvestment) in the Korean venture ecosystem. Crowdfunding is expected to continually promote the creation of start-ups in the absence of government support, boost job creation by fostering more young entrepreneurs and break the vicious cycle of a reduction in funding for newly-created venture firms resulting in a dent in the number of new start-ups. As a matter of fact, delivering her keynote speech at the National Assembly, President Park Geun-hye stressed that the materialization of the creative economy agenda requires efforts to resuscitate ailing venture firms through crowdfunding.
Q: Tell us about the five types of platforms - finance, consumption & distribution, technology, education and health care services
The five types of platforms aforementioned are the medium that will flesh out the creative economy agenda. The five types of platforms are an indispensible hub needed to help the public play a major role in pressing ahead with the creative economy agenda. The education platform is designed to nurture creative human resources by revitalizing creative education programs. In particular, the educational platform will assist underprivileged students in getting into prestigious universities overseas through varied routes, therefore giving them great opportunities to prove their worth on the international stage.
The platform for technology commercialization is designed to commercialize individuals’ creative technologies, knowledge and talents related to various industries (including culture, design, sports, etc.), thereby nurturing more young entrepreneurs. In other words, the platform for technology commercialization can be called a job promoter. And on the financial platform, crowdfunding is heavily leveraged to give the public the opportunity to discover new investment targets –i.e. SMEs and venture firms with great growth potential- and, at the same time, to provide businesses with new sources of capital and assistance.
As for the platform for consumer distribution, the current pricing system is led by large companies. Large companies single-handedly set prices on their products produced at farms or plants according to their pricing rules and then supply the products to stores. The platform for consumer distribution refers to a P2P-like system whereby both producers and consumers engage in making pricing decisions and products can be supplied to other consumers by consumers.
The platform for health care services is aimed at the construction of a solution for providing advanced medical cares with reasonable prices, which has been long-cherished by 8 million overseas Koreans, in addition to distributing a wide range of health benefits to Korean citizens. This should be achieved by utilizing extensive health care information, health care management system, medical technology and aesthetic technology. The health care service platform will also generate national wealth for creative economy if affiliated with beauty industry which has recently come under a spotlight.
In the end, these five types of platforms will allow the public to take the initiative in building a virtuous cycle (starting a business →business growth→ROI→ reinvestment) in the S. Korean venture ecosystem and will serve as an important symbol of the Park Geun-hye government’s creative economy agenda.
Q: Could you elaborate on the Creative Korea 2013 convention, slated for December, and on the roles of the newly-created Creative Economy Planning Committee
Creative Korea 2013 is scheduled to take place on December 12 through 15 at COEX Auditorium in southern Seoul. The convention which is aimed to unearth creative human talents deemed to lead the creative economy agenda and to give impetus to the creative economy agenda, is not a one-off event, but a periodic exhibition that highlights positive images of a creative economy driven by the private sector, continues to discover human talent and furnishes a variety of business opportunities. The exhibition hall of the convention will be divided largely into the following four themes: Ideas, Challenges, Growth and Co-prosperity.
The Creative Economy Planning Committee has been set up to help crowdfunding put down roots in Korean society and spearhead the formation of the five types of platforms. As I mentioned before, crowdfunding is a must in our efforts to usher the Korean economy into a creative one, so the Creative Economy Planning Committee’s pushes for the successful introduction of crowdfunding to South Korea will continue even after Creative Korea 2013.
