President Park Geun-hye has proposed “creative economy” as the core national agenda to revitalize the economy, viewing creativity and innovation as the key driving forces for the nation’s future growth.
“Simply put, creative economy is to make innovation easier in every industry,” said Lee Min-hwa, a professor at Korea Advanced Institute of Science and Technology and the author of “Creative Economy,” in a recent interview with The Korea Herald.
“The term creative economy is not new, but the policy model that Korea is pursuing is indeed the first of its kind in the world. Some countries, including the United Kingdom and Japan, already pursued creative economy policies, but have limited them to some industries. The Korean version of creative economy differs from these existing initiatives and ideas in that it aims to apply creativity to every industry,” Lee said.
The United Kingdom defined creative industries as those which have their origin in individual creativity, skill and talent, and which have a potential for wealth and job creation. The U.K. government has fostered creative industries since 1997 in a bid to improve the national brand and revitalize the economy. The Department for Culture, Media and Sport was created in 1998 to carry out creative industry policies.
In 2010, Japan announced its Cool Japan Strategy to boost new growth engines and creative industries by 2020. Under the plan, the culture industry was picked as a leading strategy to reach the target. The country began supporting the culture industries including animation, content, food, fashion and tourism to bring about lucrative business and to expand cultural added value.
In Australia, through the report “Creative Nation” issued in 1994, the government formally developed a cultural policy and viewed culture as a vital creative industry. In 2006, it set up the Department of Industry, Tourism and Resources and has fostered high-speed communications, mobile and media infrastructure for better access to culture.
“Unlike other countries, Korea is approaching creative economy as a paradigm shift of the whole nation, and as an expanded concept of converging science technology, culture and ICT,” the professor said. He pointed to the Ministry of Science, ICT and Future Planning founded under Park’s government as a control tower for the transition to a creative economy.
Role of technology in transition
In his view about how technology can take the initiative in creating a creative economy, Lee said, “Today’s technology development enables people to realize their creative ideas faster and to better access the market.”
|Lee Min-hwa. (Park Hae-mook/The Korea Herald)|
“We have recently seen a multitude of technologies simplifying the development of software, semiconductor, construction and so on,” he said, pointing to software as an example. In the past, it required hundreds of personnel and considerable funds to develop software. Now, open-source software makes the development much easier and faster. In architecture, building information modeling ― a digital representation of physical and functional characteristics of a facility ― saves architects’ time and money.
“3-D printing technologies are another good example. Something you would see in a factory decades ago is now being realized in the office with personal computers,” the professor said.
Technology development also helps companies easily outsource their subtasks and focus on core competency.
“When I ran a medical device company a long time ago, employees had to spend most of their time on developing sub-technologies like medical monitors and keyboards instead of focusing on our core products, ultrasonic diagnosis technologies. There were no makers of the sub-technologies at the time. It was so inefficient,” he said.
Technology not only helps individuals realize their ideas easily but also removes obstacles to market access. In the past, it was very expensive for start-up companies to bring their innovative products to the global market. Now, with the emergence of online platforms, they have easier access. “Angry Birds” would not have been successful without iTunes, and nor would Psy’s “Gangnam Style” without YouTube.
Within a year of Apple’s App Store opening, 65,000 different apps were launched, and the number of application downloads exceeded 1.5 billion. The platform enabled a slew of individual developers to pour into commercializing their ideas.
“Of course, this is not only limited to software. Amazon and Alibaba are good examples of platforms where goods are traded from business to consumer and business to business. This also helps to mass-produce multiple products,” he said.
Future objectives, obstacles
The crucial element in bringing about a creative economy, he emphasizes, is the creation of a fair ecosystem. Without it, small companies may lack the motivation to realize their creativity. Behind the success of Silicon Valley stands the Federal Trade Commission, which plays a vital role in maintaining order in the U.S.’ creative market system.
“Strong regulation prevents companies from even thinking about unfair business practices. Sadly, Korea’s Fair Trade Commission has not done much to foster a fair market. If the FTC functions properly, the creative economy wouldn’t be ambiguous,” he said.
He also said that the promotion of mergers and acquisitions is vital for promoting the virtuous cycle of an ecosystem that is friendly toward start-up companies. When individuals start their own business with innovative ideas and external funds, investment should be recouped in good time. Otherwise they will suffer financial difficulties and likely end up being so-called zombie firms, he said.
In Korea, most start-ups reap their venture capital through initial public offerings. However, many analysts say that M&As are more beneficial in raising business value than an IPO which requires more money and time. The success of M&As may motivate more young entrepreneurs to put ideas into action through start-ups.
Technology development has largely contributed to Korea’s economic growth for decades and now serves as a core means for realizing a creative economy. However, technology development and industry policy are not enough to lead the new paradigm of creative economy, Lee said.
“For creativity to pervade into all industries, innovation should lead to growth, and the fruits of growth should be fairly distributed. This cycle will promote innovation again. For Korea to move from a fast-follower to a first-mover economy, the economy should be rooted in sustainable innovation.”
By Shin Ji-hye (email@example.com)