As the “Asian miracle” continues to unfold, perhaps the most intriguing—and least understood—of the region’s fast-growing economies is South Korea. During the four decades following the Korean War, it evolved from one of the most abject states in the region to one of the most vibrant, a manufacturing powerhouse that has virtually eradicated poverty, malnutrition, and illiteracy. In a region of fast growth, since the 1960s Korea has increased its per capita GDP more quickly than any of its neighbors.
Despite these successes, the country remains largely unknown to outsiders. It attracts few foreign tourists, and English speakers are still rare. Geographically, Korea finds itself squeezed among three titans: China, Japan, and Russia—a position that confers great challenges and, potentially, great benefits. Economically, the country is poised at a critical juncture. While its mighty manufacturing engine powered it to great heights in the last century, to thrive in the new one it will need to develop an equally strong service sector. South Korea has already shown that it’s willing to invest; it spends a bigger percentage of its GDP on research and development than Germany, the United Kingdom, or the United States do (exhibit).
The essays that follow offer probing looks at these issues. Morgan Stanley’s Stephen S. Roach and Sharon Lamm and McKinsey’s Richard Dobbs and Roland Villinger offer separate takes on Korea’s economic challenges. Christopher Graves, CEO of Ogilvy Public Relations, provides a marketer’s view of the steps Korea could take to build a national “brand.” Shen Dingli, a professor at Fudan University, distills five strategies for continued prosperity. Bill Emmott, former editor-in-chief of the Economist, addresses the country’s geopolitical position, with a prescription for turning geography into an advantage.
Over the past year, as part of McKinsey’s work with an international advisory council to the president of South Korea, we convened more than two dozen renowned business leaders, academics, and policy makers to share their views on the country’s options for the future. The result was a book, Korea 2020: Global Perspectives for the Next Decade, published by Random House Korea. These five essays have been selected from that volume.