Korean Entrepreneurship: The Foundation of the Korean Economy

The claim that Roh had won through fraud fell flat in the face of the opposition split. In the end, it was the procedure, not the personalities that was important. There had been for the first time a peaceful transfer of power through a reasonably democratic election. Until now, democracy had been imitated. Now its form was in place. This change helped lead to what Sunhyuk Kim calls policy advocacy. In the past, its [civil society] purpose was to challenge, oppose, and even overthrow the authoritarian regimes.

Often pundits decry oversight as being essentially and necessarily evil. However, this is to misunderstand what governmental oversight is. First, it does not mean central planning. It means that the key players in an economy know that they are accountable to the polity at large. Likewise, the key players also have assurances of predictability and stability, to the degree that such a thing can be assured.

This allows them to make decisions with the notion that taking chances for future earnings, looking for new opportunities, and marketing new ideas is something that is plausible. Likewise, having oversight benefits all players in an economy because it does not allow any single or small group of actors to manipulate the market.

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One of the things that we will note from the effects of the East Asian economic crisis is that it showed South Korean leaders the need to open up the market to various forms of competition while simultaneously showing the desirability of having more transparency in the market place. Transparency is impossible without oversight. There is still significant evidence that South Korea suffers from a great deal of corruption both in business and in government. For example, the Berlin based Transparency Index placed Korea forty-third out of countries in terms of transparency in business and twenty-fifth out of 30 OECD countries.

Likewise, nearly half of Koreans think that corruption will worsen. Also, there is an added sensibility to many in Asia in that opening markets might smack of imperialism in new clothing. Domestic players fear that outsiders might come in and dominate the markets and squeeze out domestic workers, business, and that the benefits of such efforts will be transported elsewhere. In South Korea this fear is particularly strong as it has struggled for the entire twentieth century to assert its identity as a strong sovereign nation.

Despite the fear of foreign domination, there are several ways to deal with ensuring that a local economy benefits from opening its markets: For example, domestic firms work in partnership with foreign firms, a certain number of qualified domestic workers will be required to be hired, a certain amount of profit could be required to be reinvested in the local economy, and so forth.

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A state can seek to specialize in a variety of ways. In South Korea, for example, the idea that the state should be a high-tech player was decided by the government in the mid s. This decision has given South Korea a comparative advantage over other states in that South Koreans now are educated and have the capacity to be players in the technology market of today. In conjunction with reform policies that also opened the market in the mids we should expect that this would be an area of entrepreneurial growth for South Korea.

However, by having policies in place that allow for firms to fail, reorganize, and move into new markets and opportunities, the workforce and market become more nimble. Again, policies set in place in the mid s in South Korea have made this a reality. In fact, when South Korea was authoritarian, workers had far less rights, were less mobile, and had to concede to the demands of firms at almost every turn. Generally raucous and violent riots during the s and early s were the only way to gain any headway with large chaebols, and even these were not usually successful.

While far from perfect, open markets with governmental oversight seem to provide more freedom and flexibility for both workers and firms. The fact that workers have more opportunities to move because they are more skilled and educated gives firms an incentive to treat workers fairly. Likewise, the fact that chaebols do not receive inordinate protection from the state and can dominate markets with little effort means that they will have to find ways to stay competitive in the market.

There are still aspects of South Korean political life that could stultify growing EC. First, Cold War politics still plays a strong hand in South Korea in a way that most countries cannot and were never able to understand. Simply put, the political realities of a potential failure of the North Korean regime could be a catastrophe for the South. Also, given the fact that both North and South still see the Korean peninsula, at the end of the day, as something that should be a unified political entity, also plays into the political calculus of both sides.

Resources must be committed to the ready defense of South Korea, and yet, for entrepreneurial conditions to really thrive, extreme militarism and authoritarianism should be discouraged. South Korea must walk a fine line. There are also other remnants of Cold War politics that play into the political game in South Korea.

The fact that the United States stepped into the Korean War conflict as the lead state in the UN effort to turn back the forces of North Korea is something that resulted in the U. To this day there are some 30, U. Koreans have ambivalent feelings about the presence of the United States in their country Cumings, ; Oberdorfer, An innocent traveler may wonder, then, why has it not happened?

When asked this, Koreans of north and south tend to blame others—foreign powers, political leaders. It appears that the answer to discovering this meaning, at least in the South, has to do with how Koreans perceive their country. Those who are older tend to be nostalgic for a unified Korea and those who are younger tend to desire reunification only if it makes Korea stronger in the long run, but are hesitant to undertake the obligations necessary for such reunification to take place without the semblance of some promise of success.

Older people still remember the Americans coming to the aid of South Korea during the Korean War and then sticking by it during the reconstruction period. Younger people take the presence of U. A Brief Overview of Korean History In order for us to understand the current conditions of South Korea, it is useful to look at some of the relevant movements and events of the recent past. If one considers the difficulties that the people of Korea have suffered, it is hard to imagine how they have managed to make themselves into such an amazing success story.

Chung writes, Economic development is a complicated and multifaceted process involving the entire spectrum of human life and its economic, political, social, technological, and cultural environments. To achieve rapid and sustained economic growth, a developing country must overcome many obstacles, which result from a complex set of internal and external forces. Economic development, therefore, involves the right mixture of all the necessary ingredients: Economic development also entails the transformation of a society over a long period of time, which enables a society to overcome its obstacles and achieve economic progress.

Not only has South Korea met this challenge, but it far exceeded the goal. Kim, For the purposes of this rather brief discussion, we will examine the development of South Korea from the time of its colonization by Japan. South Korea was officially annexed by Japan from August to August The government of Japan during the Meiji restoration sought to expand its territorial holdings, and the Korean peninsula seemed to be a logical extension of this desire, as both Japan and China had long-held interests in Korea.

Initially, the Meiji government — sought the independence of Korea so as to eliminate Chinese claims on the peninsula see Meyer, Once Japan had removed the threat of Russia in the beginning of the twentieth century and had made inroads in its interests in China, it faced no serious competition for its interests in Korea pp. It was during this period that the South Korean economy began to modernize as it became an integral part of the Japanese empire Chung, , p. Eventually, the Japanese government used a variety of means to gain control over the land, the people, and attempted to eradicate a culture.

The Japanese government seized land for nonpayment of taxes, established hegemony over commerce and finance, and used the Korean people and its resources for the benefit of Japan pp. In general, Japanese rule in Korea was considered harsh and oppressive. They often imprisoned, killed, or tortured Koreans who did not comply with their wishes. The annexation period had a lasting effect on Korean-Japanese-U. For example, one of the primary reasons why Kim Jung-Il came to power and was in a position to make himself a favorite of the Soviet Union was due to his role as a guerrilla fighter against the Japanese.

Likewise, the Koreans long saw the U. With no opposition in sight, Japan occupied Korea in and annexed it outright as a Japanese possession in Unfortunately for Korea, the end of World War II and the Japanese occupation of the peninsula was not the end of its troubles. Though much of the economy was modernized and governmental institutions were strengthened during Japanese occupation, much of that benefit was lost.

The pain of these decisions would be felt in the most violent and harsh manner at the outbreak of the Korean War on June 25, The Cold War, in many ways, forced South Korea to play a role in the geopolitical struggle that did not encourage democracy. The United States was content with fostering authoritarian conditions during the Cold War.

We must remember that the United States occupied southern Korea in , and it established a military government that was, ironically enough, based in the former executive mansion of Japanese governors. On September 8, , General John R.

Hodge warned as early as of an attack from the North, but by then Korea was already entangled in the realities of the Cold War. The American command was too poorly equipped to move Korea into anything resembling a democracy as no one knew anything of Korean history, the language, or culture. As Bruce Cummings writes, The problem was that Korean society had no base for either a liberal or a democratic party as Americans understood it; the vast majority of the population were poor peasants, and a tiny minority held most of the wealth: Despite various measures and attempts from the United States and from the Syngman Rhee government, the Russians excluded UNCURK from moving into North Korea to monitor the political situation and thwarted attempts at reunification in A closer reading of the Korean War makes one realize the stakes that the various powers had in Korea.

In fact, Mao Tse-Dung saw the Korean war as an important test for the fledgling Chinese Communist nation, and those who fought against the imperialist Americans were seen as heroes. In my opinion, we should not. In short, this left the South Korean government unprepared for militarily, institutionally, and for the invasion commenced by North Korean troops in June of , socially. The result of the three years of war, which had much ebb and flow, was that the demarcation of the North and South stayed where it had been when the war began, at the 38th Parallel.

However, the devastation that resulted from the war was virtually incomprehensible. Poverty and hunger abounded. The entire infrastructure was devastated, and the economy was in a shambles. The first president elected in the postcolonial era was Syngman Rhee, who established the First Republic of Korea. He was a staunch ally of the United States. He was an ardent anticommunist and led South Korea through the war, though his efficacy is in question see Brazinsky, He eventually resigned in after pressure from a disputed election.

His strong-handed ruling style was one that would dominate Korean politics until the s. He helped to centralize both the political and economic planning that characterized Korean politics through this time. Continued political unrest and mounting financial difficulties lead to the fall of the Second Republic of Korea.

The overthrow of the Second Republic by a military coup lead by Park Chung-hee was a seminal event in the modernization of South Korean politics and its economy see B. Despite promising that military leaders would not run for election, Park did so and was elected president in Among the reforms that Park lead through strong authoritarianism was the normalization of relations with Japan, the solidification of what has come to be known as developmental policies for the economy, and granting more powers to chaebols to help in the creation of government policy.

He also quashed protests concerning his strongarmed ruling tactics, declaring national emergencies several times, such as in , , and In effect, he dismantled any pretensions of democracy and jailed hundreds of dissidents. He was eventually assassinated in , which led to the dissolution of the Fourth Republic. This period of time was marked by increased dissatisfaction of the polity at large with authoritarian rule. Eventually Chun Doo-whan took power in a military coup and declared martial law Armstrong, Kwangju was the hometown of a well-known dissident, Kim Dae-Jung. Various groups in the city of Kwangju demanded his release from prison and soon the entire city was caught up in the spirit of protest.

Eventually the military moved in, and nearly two hundred people were killed during the brutal suppression of the demonstrations. The Chun regime, or the Fifth Republic, was marked by similar policies of its immediate predecessor. The government continued with its ardent anticommunist policies; suppression of leftist groups, student organizations, and labor unions; state-run developmental policies; close ties with the United States; and promotion of an export-driven economy, lead by the economic power of the chaebols.

Eventually Chun decided that he would step down and thought to turn power over to one of his close colleagues and collaborators in the military coup of , Roh Tae-woo. Eventually, public outcry led to elections in that Roh won, probably because of the opposition split of Kim Dae-jung and Kim Young-sam. Since South Korea has experienced several peaceful elections and transitions of power.

In Kim Young-sam was elected president, and this marked the first time that a civilian had risen to the office of president in over thirty years. Later, both Chun and Roh were indicted and found guilty of massive corruption while in office. Both were later pardoned. Kim Dae-jung, a well-known dissident and political outsider in many ways, assumed the presidency in Unfortunately, corruption still seemed to be a problem for those in power.

Roh Moo-hyun was elected to the presidency in Charges of corruption dogged him throughout his term in office. Eventually, he would be formally investigated and he committed suicide in May of The realities of the Cold War were also used by the various regimes, particularly the Park Chung-hee regime, to oppress the citizens of South Korea. He ruled with an iron fist and acted in such a way that he always moved national political interests, which may have been identical with the political realities of his regime. Various policies were enacted to protect Korean markets until the early s, further strengthening the chaebol dominance of the domestic work place, and Korean political and economic life resembled something of an iron triangle—business, politics, and various other players sought to insulate the status quo from change see Y.

What I hoped to show through the very brief encounter with Korean political life is that democracy and the very conditions that might allow for an entrepreneurial spirit were hard fought. We would be remiss if we did not discuss, albeit briefly, the idea of the developmental state as it was practiced in Korean politics and business. Many attribute the rise of the Korean miracle—its rise from ashes after the Korean War to become an economic powerhouse—to the ability of the state to implement strong developmental policies.

This developmental policy included highly coordinated efforts by the Korean government and business elites to move the Korean economy forward Minns, The sacrifice of democratization and social freedoms were justified by the need to strengthen the economy Song, Interestingly enough, there are many who take examples such as South Korea, and then use the idea that authoritarianism might be a road toward economic success.

It is loosely the model that the U. South Korean economic growth was used by many to justify developmental policies that were backed by authoritarian regimes. It may not always be the case that long-term success can be sustained by authoritarian regimes. It seems that in the long term, governments that legislate and support ideas such as transparency, education, citizen participation, economies that benefit local workers, and the like are much more likely to have markets that are stable and productive over the long haul.

The authoritarian tactics used in South Korea would not have been, and have not been, tolerable in other places Farrell, South Korea, one might argue, is currently in the midst of making these changes so that it will not slide back into authoritarian rule at any point in time and will continue to be a desirable place to do business B. Conclusion It is always difficult to predict how a country will do in the future. South Korea seems to have shorn up its civic policy in a way that should be desirable for those who consider themselves to be entrepreneurs.

There is increased civil freedom. The market in Korea is slowly opening up. Foreign businesses are allowed to set up shop now more than at any time in the past. South Korea is trying to flex its muscles, to some small degree, in the international community, particularly with regard to economic planning, policy, and development. Perhaps the most significant change in South Korea is that authoritarian regimes seem to be a thing of the past.

The result of the changes is that South Korea has one of the most technologically advanced and educated polities in the world. It now seems as if its government and economic policies are catching up. Civil Society, Democracy, and the State. Nation Building in South Korea: Koreans, Americans, and the Making of Democracy. The University of North Carolina Press. Korea under Siege, — Capital Formation and Economic Transformation. South Korea in the Fast Lane: Economic Development and Capital Formation.

South Korea and the United States. University Press of the Pacific. This Kind of War: The Classical Korean War History.

America and the Korean War. The History of Korea. The Political Economy of East Asia: The Making of Modern Japan. Johns Hopkins University Press. The Four Asian Tigers: Economic Development and the Global Political Economy. The Politics of Democratization in Korea: The Role of Civil Society. University of Pittsburgh Press.

The Shaping of Modernity in the Republic of Korea. Homa and Sekey Books. A History of Korea. Political Institutions and Well-Being in the World, — The Rise of the Korean Economy. The East Asian Miracle: Economic Growth and Public Policy. Shim Introduction Over the centuries, researchers, especially from Western academia, have studied business entrepreneurs extensively.

They have analyzed their purposes in action, in risk taking, and in growth. Business entrepreneurs and the conditions they thrive in have been thoroughly studied, including how their purpose and talents have been nurtured by Western value systems of capitalistic individualism, their social environment, government policies, and a wide range of business institutions. The conceptualization of entrepreneurship, however, is a product of reified or inertial values, customs, and the social environment in which the entrepreneurs are living.

With this view, we need to pay more attention to entrepreneurs from the other side of the world i. By the s, both Asian countries boasted living standards that rivaled those in the West , p. It seems that China and Japan will be the second and third largest economies in , and some have predicted that China will overtake the United States in This chapter attempts to portray some of the political and cultural understandings that created a push-and-pull relationship between the political leader President Park Chung-Hee — and the first generation of entrepreneurs in making choices and taking action during the early economic development and industrialization of South Korea.

The chapter is organized as follows: Value Systems and Entrepreneurship Confucian cultural values such as self-reliance, respect for hierarchy, and devotion to education are often recognized as the key to the economic success of the original Asian Tigers—Japan, Korea, Taiwan, Hong Kong, and Singapore—which are all countries steeped in Confucian values Schuman, At the same time, we also recognize that each of these countries transformed those Confucian values differently based on their interpretation of their political and cultural systems in response to their needs.

For example, in Korea, credit needs to be given to President Park and his ability to articulate the meaningful common threads that both citizens and entrepreneurs could identify as common goals that needed to be accomplished. The system of politics—the government-led economic development model of partnering between political strongmen and entrepreneurs— should not be discounted Schuman, Korea was no exception in following this path and adopted the Asian model of capitalism with a government- and export-led economic development model.

We can see, however, that Korea designed a unique economic development plan and was open to adapting policies. Just as culture and environment differentiate the practice and process of doing business, so too the opportunities to become an entrepreneur often differ in collectivistic and individualistic societies and also differ with relation to the time in which the entrepreneur lived.

But, as Western capitalism and individualism matured in Korean society, we see a gradual tendency among entrepreneurs to move from market-driven personal motivation to efforts toward the collective good of the nation. Especially after the economic crisis and in the process of the IMF bailout implementation, there were fundamental business paradigm shifts, such as from lifetime employment to performance-based employment, from working for a big chaebol to a job with personal control and freedom, independence, and self-ownership.

The fast-growing and changing technology of recent years also opened doors for young entrepreneurs to tap into this evolving market to explore their innovative ideas Interview: Creative entrepreneurs from the younger generation have risen as a new prestigious social class while also enjoying freedom in their career choices Shim, Kim, and Martin, As a consequence, we can identify common traits in these young Korean entrepreneurs that Western scholars have recognized in entrepreneurs, such as creating values in the marketplace, creativity, and innovation.

There are different evaluations of President Park Chung-Hee, and some see him as a dictator, leader, or general. No Korean wants to recall the dark age of military dictatorship, but ironically, they remember Park as a symbol of a strong leader who saved the country from poverty with vision, hope, and sacrifice with his dictatorship Hong, ; Schuman, Park is remembered for his ideology of leadership, his firm conviction and his unswerving will and commitment to achievement, and eventually for managing the Republic of Korea as a corporation, Korea Inc.

Hong, ; Schuman, The collar of his undershirt was worn out, and his shirt even had several small holes, and he wore his belt until the belt hole became so big that even a pencil could go through the hole Hong, , p. It will also be interesting to consider how pre-entrepreneurs who are now chaebol leaders and citizens perceived and responded to his leadership and authority in a cultural context. Chu Young Lee , making Korea one of the poorest countries on earth. It had no natural resources, and while 80 percent of the Korean economy depended on agriculture and their main food supply was rice, 75 percent of the land was mountainous and unsuitable for farming.

As a consequence, Koreans have suffered from a shortage of food for centuries. The season from February to June, when barley thrashing comes to an end, saw a great number of farmer families subsist on grass and tree bark.

Korean Entrepreneurship: The Foundation of the Korean Economy

They lived at a starvation level, and newspapers frequently reported family suicides with large headlines. The 36 years of Japanese colonization in the early twentieth century followed by the Korean War also took away any opportunity the Koreans might have had for self-sufficiency. Park understood the pains of the spring famine as much as anyone as he came from a poor farmer family, and he understood that the nation had to respond to these urgent needs and develop a society with a policy of equal welfare.

He believed that the government had to initiate concrete economic plans and actions as well as lead a modernization process with spiritual aspects The Maeil Kyungje Shinmun, Originally an average annual growth rate of 7. However, since the first Five-Year Plan was designed by military personnel who had participated in the coup with Park, the execution was not as smooth as they had planned.

Park acknowledged that he and his administration with its military background had limited knowledge about economic development. SHIM Park had earlier formulated economic modernization plans, but he realized that he lacked knowledge on how to execute them. Lee was in Japan when the military coup of May 16, , took place. Soon after Park took power, the Supreme Council for National Reconstruction announced a set of regulations aimed at cracking down on illicit wealth, and Lee was on a list of 11 people who had accumulated illicit wealth The Maeil Kyungje Shinmun, , p.

Eventually Lee decided to return to Korea and announced that he would turn in all of his accumulated wealth to the country. Soon after Park and Lee met, Lee submitted his plan for industrial development. He advised the president that the only way Korea could survive and develop a new economy was to borrow money from advanced countries such as the United States and Germany.

In November of , a group of businessmen headed by Lee Byung-Chul went to America to meet businessmen willing to provide loans for projects, such as factorybuilding. But American businessmen were hesitant to invest in Korea because they saw that there was little chance of Korea repaying the loans. These two foreign funds made it possible for Korea Inc. The main goal of the first Five-Year Economic Development Plan was to establish the basic infrastructure of industrialization and to manufacture exportable products. The establishment of the Wool-san Industrial Complex was the first project Park had planned to achieve this goal.

In early , the government announced the blueprint of the Wool-san Industrial Complex, focusing on constructing a steel mill, electric plants, refineries, fertilizer plants, and the production of heavy machinery. When the American investors arrived in Wool-san, they noticed there was nothing but empty sand fields and barley farms even though they had heard that the complex had already had a foundation-laying ceremony early in General Van Fleet persuaded the American businessmen to invest in Korea because of the reputation Koreans had for hard work, endurance, and sincerity.

Delegations of Koreans emphasized the benefit of the Wool-san location, which was close to large cities that would provide an ample workforce and close to harbors that made shipping easy.

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Exports as the Lifeline Korea not only had a long history of suffering from poverty, but also had been mostly destroyed during the Korean War. After the war it had been divided along ideological lines into South and North with Western democracy and communism, respectively. Park was a dictator but showed that he had the welfare of the Korean people in mind through his commitment to his policies and his management skills The Maeil Kyungje Shinmun, , p.

Park and his followers cabinet members and businessmen believed that developing an export industry was the only way that Korea could get out of poverty and become an independent nation. The problem was that Korea was, at that time, one of the poorest countries in the world, and it was not an easy task to get two thirds of the votes from the GATT member countries, which was a requirement to becoming a GATT member. The Korean delegations stayed in a very inexpensive hotel for five months to persuade and negotiate with members of the GATT.

However, the Korean government was so poor that the task force team did not even have enough money to buy three meals a day, and it was not possible to approach the GATT members freely to establish networks without any money. Finally, the task force team asked the Korean government to send them money to develop social connections with the GATT members.

SHIM force team—Korea was that poor. Funding had to be made available for the manufacture of export goods, but Korea could not even sustain itself even for a day without foreign assistance. The situation and capacity of the Korean business industries was no better than the government situation. Until the May 16 coup in , there was no accurate census data to provide relevant information to establish plans and directions.

In , two years after the May 16 coup, the government held the first industry census since Korea was liberated from Japanese colonization after World War II. According to the census data, there were 18, manufacturing businesses, and among them, manufacturers were relatively defined as big businesses, and 18, were categorized as medium and small businesses.

However, the capacity and sales volume even of those businesses that were defined as big businesses were not as competitive as the medium and small businesses in advanced countries Hong, , p. To use the limited resources efficiently to achieve the collective common goal of a self-sufficient national economy The Maeil Kyungje Shinmun, , p. Here are some stories in which we can witness how strong Park was as a leader and how his followers and the citizens contributed to the modernization of Korea, especially through exports.

On May 11, , Park appointed Park Choong-Hoon as the minister of commerce, but his actual responsibility was to serve as the executive director of enhancing and exercising export strategy. At his appointment ceremony, Park Choong-Hoon asked the president to be his commander in his assignment of enhancing the export industry and requested his support and encouragement. President Park in response asked his newly appointed minister of commerce what his export goal in dollars would be Hong, , pp. They met not only the goal but also showed The number also helped to achieve the goal of the first Five-Year Economic Development Plan two years earlier than planned.

Government ministers and businessmen not only followed his orders as executives for Korea Inc. Other contributors who were dedicated to the export-focus economy were young girls who worked at Gu-ro, an industrial complex located in a suburb of Seoul. In , Park developed nine industrial complexes in or near Seoul, including Gu-ro, Bu-pyung, and Ju-an, to accelerate exports. Most of the workers in the assembly lines were young women, 15 or 16 years old, who had received only an elementary-school education. They came from farm families who had never received a formal education.

They were some of the poorest people in Korea at that time. These young women used to live in shacks with five or six other workers and worked 13 to 14 hours a day. The major products of these factories were radios, wigs, nail cutters, lightbulbs, and textiles. They then devoted themselves with this new spirit to the projects and plans President Park and his administration had planned. For example, 3, nurses and miners volunteered to work in Germany to earn foreign dollars. To repay the debt the German government asked Park if Korea could send nurses and miners to work for them.

Most Germans avoided working in the mines, and they were also short of nurses. Beginning in for 15 years after that, Korea sent 79, miners and over 10, nurses to Germany. Most of the miners who went to Germany were not professional miners, and many of them were college graduates. But 65 miners, 44 nurses, and 8 technicians lost their lives and were not able to return to their homeland and to their families. In , President Park received a request from President Johnson to build a hospital in Vietnam and then to send tae-kwon-do instructors, and finally, to send soldiers to help the Americans who were facing difficulties in the war.

He also knew his country was dependent on American aidas the one of the major resources for economic development, so it was impossible for him to say no. During the eight years and eight months that Korean soldiers were stationed in Vietnam, Korean companies, including Hyundai, Dai-rim construction, Kyung-nam enterprise, San-whan enterprise, Hanjin, and Boo-heung, were also willing to take risks to get business opportunities in Vietnam.

For example, from , the U. Army needed to build a base in Harbour City where their army supplies were docked, but most foreign companies from America, Australia, France, and Singapore were making difficult progress due to the dangers of the war. Hyundai took the job and finished it within an unexpectedly short time with only one ship.

All of the Korean companies and enterprises who were actively working as construction companies and as suppliers for the U. With that money, Korea was able to develop their defense forces and the heavy chemical industries. But most of all, it was an opportunity for the modernization of Korean companies in terms of quality and resource management to meet the demands of the U.

During the Park era from to , exports were stressed as the way to economic self-reliance. Jo Anne Lee; Interview: As a result, Korean businesses, in general, have long been reluctant to outsource Interview: Lee Sang-Hyun , and they have difficulty in compromising Interview: When loans were not available from banks, the businesses often expected government subsidies, which were considered free money, or they sought private loans, which in most cases had interest rates two or three times higher than the bank rates. From the beginning of economic modernization in the s and s, the government relied on foreign loans for economic development, which the government then allocated to the governmentplanned industries and to selected businessmen to carry out their projects.

But there was no adequate process for the repayment of such loans. The government also distributed funds to banks so they could provide loans to certain businesses for their specific purposes or plans, but the borrowers paid little attention to their capacity for repayment. In , the KOCCA Korea Culture and Contents Agency was established to develop and promote the culture industry and to assist it in responding to the rise of communication devices and the importance of the role of media products in promoting culture and lifestyles in the new globalization era.

As a result, we saw the rise of young entrepreneurs who opened doors in social media enterprises, such as Cyworld, which opened in and grew at an unbelievable rate so that in February they were able to attract 13 million members Shim, Kim, and Martin, , p. KOCCA soon started to provide free-of-charge domestic and overseas training programs for professionals working in the media industry, especially, movies, television, music, games, and the mobile industries.

The agency selected participants for the programs. As a consequence, when Koreans face economic difficulties, business owners and entrepreneurs often expect the government to lead economic development and look for government funding to initiate new businesses Interview: Philosophy of Self-Help p. The start up of the Sae-ma-ul Undong The New Community Movement and the administration reform drive since reflected his belief in the importance of self awareness and in the philosophy of self-help.

Park as president and CEO believed in the need to press and guide people into a spiritual revolution, and he tried to translate the spirit of the May 16, , revolution into action through Sa-ma-ul Undong. SHIM on the community and national level. Park addressed a conference of provincial governors in March Another statement that he made underlining his commitment to a spiritual revolution and social justice can be found in an admonition addressed primarily to students and opposition circles bent on demonstrations and to public officials accused of irregularities.

There still remains much to be cleared and renovated. We should not stop halfway and relapse into the old state. The battle against irregularities should be carried on until they are completely uprooted. Park, Originally, regional community development was initiated by advanced countries acknowledging the need for community development in the economic development of third world countries. The UN is the leading organization worldwide involved in this movement. England had earlier developed this type of program for the improvement of local economies in their colonies in Africa.

Before the UN adopted these programs, the Ford Foundation in America supported such programs passionately, and America used this concept for local communities of Native American Indians and African Americans. In , a local community-development program was adopted in Korea at the suggestion of United States Operations Mission USOM , focusing on the economic development of farming villages, but the result was not significant because it was designed without considering local ways of thinking and the cultural background Kim, Y.

As a result, there was a shift of the population to the large cities, especially to the capital city, making it difficult to identify potential leaders, change agents, or other related human resources from the farming areas. The common purpose of local community-development programs is to help the community identify local human resources and the availability of local and outside financial resources that they might utilize for improving the standard of living and also for developing innovative thinking and leadership.

Since the common goal of the local group is to improve the local economic status, locals should have enough human resources and also be able to identify financial resources or receive financial support from international and national government funds distributed to the local community. This program was also designed to satisfy the needs or the purposes of financial providers, so the local community had to achieve financial independence in order to pursue the next projects and not continue to depend on financial support from outsiders.

Hence, community development involves understanding the local cultures and social systems if its ultimate goal is economic independence of the local community. Korea had just become independent in from 36 years of Japanese colonization, and the country was ruined completely during the three years of the Korean War up until Korea was known as the most Confucian country in Asia until the late twentieth century, and Confucian values of authoritarianism, hard work, accepting the inequality of power distribution, sacrificing the self for the collective good, and respecting seniority were widely accepted Pye, ; Shim, Kim, and Martin, Traditionally, three farming villages formed one local community, the local community leader was elected by seniority, and the people did not complain about providing group labor Kim, Y.

However, in certain places where the traditional community-leader system was practiced, the local government made new laws in which those who did not participate in community projects would be fined. Korea is now no longer under a centralized political system, but a provincial system in which the citizens enjoy their independence from the central government and their competition with other provinces. SHIM the other However, it is also interesting to note that people throughout the nation accepted Park as a figure with the Confucian notions of power and authority, and followed his orders.

The nature of power differs profoundly from culture to culture Pye, ; Shim, Kim, and Martin, Of all social phenomena, power is one of the most sensitive to cultural nuances; its potentialities and its limitations are always constrained by time and place. Until late in the twentieth century, in accordance with the notion of power as something achieved and thus deserved, it was believed in Confucian societies that the government should be ruled not so much by laws as by superior men, defined by certain personal status and often by certain features of personality , who then defined and expanded their roles as political rulers, and whom the people accepted as political leaders and identified them with the state system Pye, ; Shim, Kim, and Martin, The sae-ma-ul movement was first proposed in April to carry out in earnest a movement to develop rural villages into new communities.

As years passed, the movement grew to cover every nook and corner of the country. In the initial years, the movement placed priority on the development of farming and fishing villages, but later, it gradually spread to urban areas and industrial plants and at the same time was being sublimated into a spiritual movement. This can be evaluated as an epoch-making national movement The Maeil Kyungje Shinmun, , p. Chung Ju-Young and His Vision All start-up businessmen can not be entrepreneurs, and all business owners do not engage in entrepreneurship.

Entrepreneurs create values in the marketplace or in society with creativity and innovation. Entrepreneurs are not satisfied with the current status or products they see in the markets and have a strong desire to create and to renew the values of the products and markets and, ultimately, to provide satisfaction to consumers or to society as a whole.

Many scholars have defined entrepreneurs as sharing common traits of character: Entrepreneurs see opportunities where others do not, and take action to make opportunities for new businesses by creating new infrastructures and identifying possible resources that are required in the process of achieving their goals. They have a strong belief in themselves, are self-disciplined, and enjoy their desire for creation and innovation that will lead to creative destruction Chung, D. Here is the story of Chung Ju-Young, who was selected by The Times, November , as one of the most distinguished entrepreneurs in Asia for the past 60 years.

He had six brothers and two sisters. He ran away from home four times, the first time when he was 16, with the dream of getting out of poverty and getting away from the responsibilities of being the first son. When he was 19 years old he ran away for the fourth and final time, and he worked as a dock worker and construction site laborer until he started his own business with a rice delivery store when he was He learned Chinese from his grandfather, but the only formal education he received was in elementary school.

SHIM by Confucian education by his grandfather and by his parents who were diligent and hardworking. After the Korean War, he educated himself through his business experiences in construction projects with the U. Army and in running an auto repair shop.

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He saw opportunities to expand his vision and technical skills. Then, from , his eyes opened and he aggressively bid on overseas construction projects. He became directly involved, first, in purchasing and developing construction equipment and materials, then, in directing construction projects like a general in wartime.

He determined to complete every project undertaken before the deadline to save construction costs and to develop creditability for his company. Like other Korean conglomerates, Hyundai has always been owned by the Chung family. Looking back on the Korean economic system, the founders of the big businesses that became conglomerates were the pioneers of entrepreneurship in Korea. They saw business opportunities and used the traditional values of the family system as means to achieve them while working with the authorities. In the early Republic of Korea, especially, the relationship between business owners and employees was that of a collective family group who shared the same destiny.

As a consequence, the traditional Confucian practice of authoritarianism was accepted as normal, and ownership and management were not clearly separated. Chung, as a person with a Confucian education, believed that his responsibility as the first son was in pursuing and protecting the prosperity of the family Kim, Y. However, unlike most Koreans who had lived with a dream of getting scholarly status, he chose to chase his dream as a businessman in order to fulfill his family responsibilities.

It was not hard to notice the fundamental qualities of an entrepreneur in Chung Chung, D. First, he refused to work for someone else; he wanted independence. He believed that no one else could advise him or provide him with business opportunities. He considered it dangerous to believe that any external power would help him for personal and business success. From an early age he labored as a dock worker, construction laborer, and rice deliverer. But he always thanked his parents for the lessons of diligence he learned from them, and he believed that it was this inheritance that helped get to where he did Chung, D.

Second, he had visions about markets and the ability to create new markets. There is a difference between one who has a vision and one who takes action on the vision. He had the drive to take risks to follow his vision and create new markets. He said that a business grows by creativity, not by power or external help Chung, D.

His company did major construction projects for the army and constructed runways for the air force, and then was the first Korean construction company to get bids from nations outside of Korea, such as Thailand, Vietnam, Guam, Alaska, Australia, Indonesia, and Papua New Guinea, from the late s. Another action Chung initiated was when he visited the Yokohama and Kobe shipbuilding yards and Kawasaki heavy industries in Japan. He realized that Korea needed to build shipyards in order to expand overseas construction, and he had them made.

He became the founder of Korean heavy industries. Third, he had a strong sense of responsibility in keeping his promises and respecting contracts even when he lost money because of inflation and unexpected construction costs. He believed that time was gold, meeting the deadline he promised to clients was critical, and that self and businessdiscipline was essential. During his waking hours, he believed that time should be used for production, and he was the first person to arrive at the construction sites for the projects he directed. Fourth, he had a philosophy on the value and use of money.

His mother and his wife used to deliver simple homemade lunches to the construction workers until the late s. He told his top managers to play tennis rather than golf in consideration of the cost of golf. Skip to content Skip to search. Home All editions This edition , English, Book edition: Korean entrepreneurship [electronic resource]: Youn-ja Shim Theresa Y. Physical Description 1 online resource xvi, p. Language English View all editions Prev Next edition 1 of 4.

Check copyright status Cite this Title Korean entrepreneurship: Also Titled Palgrave connect. Other Authors Shim, T. Medium [electronic resource] Content Types text Carrier Types online resource Physical Description 1 online resource xvi, p.

Subjects International economic relations. Entrepreneurship -- Korea, South. Entrepreneurship -- Korea South -- History. Business enterprises -- Korea South -- History. Korea South Summary This edited book describes the growth of entrepreneurship in a country that has recently become an economic powerhouse but is still often ignored by scholars and popular press - South Korea. In this collection of essays, scholars describe entrepreneurship in South Korea, highlighting the favorable political and cultural values conducive to its development.

Several authors examine individual and group enterprises from President Chung Hee Park's era to today's savvy information science technocrats. Other authors investigate the characteristics of entrepreneurial family firms across three East Asian countries, i. Chapters exploring the impact of the new media and globalization on Korean entrepreneurs conclude the book.

Entrepreneurial Opportunities in Cyberspace: Notes Description based on print version record. Includes bibliographical references and index. Electronic version is available via Palgrave Connect. Title from title screen viewed on Jan. Access may be restricted to users at subscribing institutions. Other Form Print version Korean entrepreneurship. View online Borrow Buy Freely available Google at http: With access conditions Palgrave Connect at http: Other links Ebook Library at http: Set up My libraries How do I set up "My libraries"?