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Overhaul the Economic Structure of Korea
Interview
Overhaul the Economic Structure of Korea
  • By matthew
  • July 29, 2013, 09:13
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The corporate headquarters of several of the most well-known conglomerates, or chaebol, in Korea.
The corporate headquarters of several of the most well-known conglomerates, or chaebol, in Korea.

 

“The notion of a creative economy is to overhaul the economic structure of Korea, a structure that has lasted for the past 40 years, and thus will require consistent effort and active participation by the general public and all corporate entities,” said Vice Minister of Science, ICT and Future Planning (MSIP) Lee Sang-mok in a recent interview with BusinessKorea. He worked as Minister of Science and Technology, the predecessor of the MSIP, in the 1980s, and built his career in government agencies and research institutes in the field ever since.

You are one of the leaders in charge of planning and realizing a creative economy; one of the most important pursuits of the Park Geun-hye administration. Please give your thoughts on this crucial role.

Lee Sang-mok, Vice Minister of Science, ICT and Future Planning.​I am very proud of this position, but at the same time feel huge responsibility as a high-ranking official of the ministry in charge of an issue of such great interest. We have prepared action plans for a creative economy since the launch of the ministry and announced these plans on June 5 of this year. The idea is to switch Korea’s economic development paradigm from that of an imitation and fast-follower strategy to one of self-driven growth based on creativity.

It seems that opinions are split regarding the concept of a creative economy. What is the official definition?

A creative economy is not so much an academic notion as a strategic concept for the creation of new jobs and markets. Its goal is to combine the creative imagination of the people with advanced information, communications and scientific technologies in order to seek new economic opportunities while shoring up existing industries at the same time.

The government recently announced specific plans for the establishment of creative economic ecosystems. What details and tasks are to be handled first?

The plans are to create a virtuous cycle of business foundation, growth, investment collection and restart in which both individuals and businesses can turn brilliant ideas into business opportunities, as well as being free to have a second chance if they fail. To this end, we will provide more education and training for prospective entrepreneurs, as well as helping them with their efforts.

Those in the early stages of business will benefit more greatly from angel investment, income tax deduction, crowd funding and incubating services. These measures will help them take root in the business world.

In addition, during the growth stage, they will be given the investment and support they need through venture capital and private equity funds so that they can make successful inroads into overseas markets. The measures provided during this phase include the protection of intellectual property rights, advanced technological evaluation systems, and technology guarantee funds.

The key to a creative economic ecosystem lies in the safety net with which venture entrepreneurs can give take risks without having to worry about the failure. It is in this context that the Korea New Exchange (KONEX), a stock market dedicated to small businesses, was established, joint surety abolished, and various financing, consulting and M&A assistance supports were put to the anvil.

The ministry has promised that it will create whole new services based on Korea’s world-class Internet and information and communications technologies. Can you give us some examples of these?

Cloud computing, big data and Internet of Things have been selected recently as key future trends of the IT industry. A large number of global enterprises are moving nimbly in these emerging fields in an attempt to take the initiative.

Well aware of the significance of such new industries, the ministry announced plans for the promotion of new, Internet-based industries on June 5 of this year. The Internet sector has a great impact on all fields of society, ranging from the daily lives of people to welfare, culture, and security. The ministry will continue to do its utmost to prepare the industrial foundation and boost initial demand.

What are the policies and investment plans of the government in regards to enhancing R&D and innovation?

The government is planning to pursue a creative economy by means of R&D that benefits all people. It is going to make greater investments in basic sciences, small and start-up firms, as well as helping convergence industries, while at the same time strengthening its capabilities in sectors directly related to everyday life, such as disaster control, medical and healthcare, education and public services.

Among all things, the most important part of national innovation enhancement during an era of creative economy is creativity based on novel ideas and human resources not afraid of failing. In this vein, the ministry is working on new HR programs in tandem with the Ministry of Education so that more and more people can spread their wings and follow their dreams.

Specifically, the programs will help primary and secondary students become more interested in and get a better grasp of math, science and the arts in order to boost their creative power. Furthermore, the curricula of local colleges specializing in science technology will be renovated so as to facilitate more in-depth research activities and expedite the advent of a creative economy.

Private-sector investment is very important for a creative economy. What is the government planning to do to induce this?

A variety of private-public joint funds are scheduled to be raised, including the Future Creation Fund and the Young Entrepreneur Fund. The public sector is going to shoulder possible losses in those fields with high investment risks, and distribute profits on a preferential basis so as to mitigate burdens on the part of private-sector investors and thus encourage their participation. The government has also increased the size of angel investment matching funds.

Another tool is crowd funding, which can be defined as multiple investors financing certain ideas and technologies that are considered to be promising and profitable enough. This will make it easier for start-up firms to get the financial resources they need during the early stages.

Some skeptics are pointing out that the concept of a creative economy, one led by the government and based on science and ICT, will only disturb the national economic ecosystem. What do you say in regards to this?

I believe that the private sector should take a leading role in the quest for a creative economy, while the government acts as a supporter. We also focused on the revision of laws and regulations and infrastructure establishment in establishing action plans in order to help individuals and corporations fulfill a pivotal role.

I would like to emphasize that the concept is to shift the paradigm of economic development by utilizing science and ICT, two of Korea’s strong points. However, these two themselves do not limit the scope of a creative economy by any means.

As stated in the action plans, science and technology that form the foundation of a creative economy cover the overall economic, social, education and cultural elements required to establish an ecosystem. Pessimists’ remarks about the scope of a creative economy have missed the mark.