Look Out for the K Wave!
October 22nd, 2012
What’s the most-watched YouTube video in years? Psy’s Gangnam Style rap acompanied by his giddy-up dance moves. What’s the highest-rated flat-screen television? Consumer Reports says Samsung. What do they have in common? They are made in South Korea. This is a big deal.
Other counties have triumphed in manufacturing, notably, Japan in the 1980s. But very few countries have developed world-class technology side-by-side with world-class entertainment. Ask your kid about K-pop, Korean pop music. Ask a Japanese or Chinese citizen about K-TV. Korea exports soap operas throughout the world, and housewives and househusbands will watch them hour after hour. Call it the K-wave. It’s a $4 billion-dollar tidal wave of entertainment exports. And now that Korean music and television shows are booming, foreign tourists are flying and sailing to Seoul, packing hotels and restaurants, and leaving behind foreign currency.
Is there a magic potion that catapulted Korea from one of the poorest countries on earth — as poor as Haiti in 1960 — to its current triumphs? Nah, just hard work, low taxes, and parents who want their kids to get smart. I delivered a speech at The World Knowledge Forum in Seoul a few weeks ago, along with Malcolm Gladwell, Paul Krugman and other banner names. Thousands of Koreans paid to hear writers and intellectuals spar and share their newest ideas. Cass Sunstein, Tyler Cowen, Dean Karlan of Yale and I debated whether governments should target happiness levels. An eager audience asked sharp questions.
In Korea, parents understand that without education their kids are competing against the last peasant in Mongolia who yoked his yak to a plow. Koreans buy books — hardcover, paperbacks and the downloadable kind. (Even my novel The Castro Gene is printed in Korean!) Parents don’t leave education up to the bureaucrats; they personally kick in 2.8% of GDP for after-school programs and other enrichment. When I mentioned Sproglit, my forthcoming math education video game to Koreans, many immediately asked for ordering instructions.
And taxes don’t discourage work and investment. Korea takes just 26.6% of income in aggregate taxes, according to the OECD. Compare that to France at over 43%. French President Hollande’s new 75% millionaire’s tax is about as clever as asking Atlas Van Lines to drive trucks to the homes of successful people and load them up for a trip out of the country.
Korea’s got problems, of course. Don’t we all. Start-ups aren’t nearly as dynamic as in Silicon Valley, for example. More scary, South Korea has a crazy brother to the north, who would be dismissed as barbaric if he couldn’t boast of deadly missiles. It has no real rail or truck routes to China or Russia because of North Korea. And it’s battling Japan over rights to some small islands. So far that battle is merely verbal.
Still, South Korea teaches us some valuable lessons about how hard work and a culture that honors brains can gallop past its peers. Giddy-up.