South Korea emerged from a fratricidal war in 1953, but the bloodshed is a distant memory today. In just a few decades, the Asian country has become a leader in the global digital market.
In South Korea, “Gangnam” isn’t just a choreography acclaimed by millions of YouTube viewers globally (with a total of 65 million views, to be exact). Located southeast of Seoul, the Gangnam District and its broad avenues lined with sparkling skyscrapers is the nerve center of the country’s futuristic ambitions. The district is home to a sprawling network of digital startups and high-tech incubators whose mission is to create the smart city of the future. In this regard, Seoul ought to make Silicon Valley green with envy, with virtual shops displayed at bus stops, an ultra-fast 4G network that even works in the subway, free wifi at 10,000 stations throughout the city, and a mind-blowing number of surveillance cameras.
Within this urban sprawl, the majestic Han River that cuts the city in two is the only thing capable of slowing down the South Korean capital’s frenetic pace. 70% of the country is covered in mountains, leaving little space for its 50 million citizens. Over two decades of public investment, South Korea – and especially Seoul and Songdo – has become a looking glass into the future for US digital tycoons, despite its significantly smaller domestic market. South Korea’s remarkable trajectory must have been unimaginable just 50 years ago, when its GDP was the same as Morocco’s. It’s the result of a political strategy the country has no intention of abandoning any time soon.
“The Korean government is confident that in the near future, virtual reality will shape all the big markets – from the mobile industry to the military, as well as gaming, education, medicine and sport,” says KwangYun Wohn, a professor at the head of the National Council on Science and Technology Research. “Throughout this process, many South Korean companies will play a key role. We have enormous potential to become a world leader in virtual reality.” It’s a sector in which the country plans to invest $320 million over the next four years.
But how did South Korea forge itself a place in the most revolutionary sector of the 21st century?
The miracle of the Han River
“The miracle of the Han River” is the name for the extraordinary economic leap the small country, wedged between two neighboring industrial giants – China and Japan – made in just 30 years. When it emerged from Japan rule in 1948, Korea seemed ill prepared to stand on its own. Deprived of abundant natural resources, the territory was also split, with an industrial north under the Soviet Union’s watch and an agricultural south closely monitored by the United States. From 1950 to 1953, infighting tore the country apart, leading to the definitive break between North and South Korea.
The new country had to rebuild itself and attempt to put Japan’s humiliating half-a-century rule behind it. “With an economy the size of Kenya’s and a GDP per capita equivalent to Ghana’s, the state at that time was extremely poor,” said Jimmyn Parc, a professor at Sciences Po and a researcher at Seoul National University. “Before the 15th century, Japan had for a long time been less developed than China and Korea. Later, it benefited from technological exchanges, but for a long time, we were the master, and they were the student. During the occupation, this balance of power was reversed.” It was under the dictatorship of Park Chung Hee, who remained in power from 1963 to 1979, that the foundations of the country’s economic modernization were laid. He also established a frenetic workpace, and urged South Koreans to work hard to make up for lost times.
South Korea then started to be seen as an emerging country by its neighbors, and in the 1980s, Park Chung Hee’s lesson truly sank in: hard work pays off. The philosophy stuck, even after the country’s democratic transition in 1986. “There is a 19th century book written by members of the Italian Embassy that describes South Koreans as lazy people, without any motivation to work. That’s the opposite of what we hear today!” Park says.
In 1995, the government launched a 10-year plan to build high-speed infrastructures and training programs to teach Koreans what the Internet could do for them. At the same time, the deregulation of service providers rapidly made telecommunications inexpensive and accessible to all. “Nevertheless,” says Jimmyn Parc, “the construction of these Internet infrastructures is often wrongly associated with the entry of South Korea into the digital race. In fact, the government did not invest in web technologies at the time. Samsung and LG have been successful in these areas, but the state has not pushed them hard.”
Samsung was created in 1938 by Lee Byung-Chu. Back then, it was a fresh pasta factory. Later, it began refining sugar, before finally opting to expand to electronics in the 1960s. Samsung’s noodle aspirations are a distant memory today: the group is now one of the world’s leading manufacturers of mobile phones and the most important private player in South Korea’s economic boom. Closely followed by LG, the firm has become emblematic of South Korea’s arrival to the digital age. “LG and Samsung have learned a lot from the United States and Japan, and they’ve made their name by copying Motorola, for example. For a developed country, innovation is synonymous with creation and novelty. For a developing country, benchmarking is enough because it has neither the time nor the means to invent.”
Professor Hwy-Chang Moon summarizes how the Han River miracle came to pass in his book Strategy for Korea’s Economic Success. He says it came down to four key elements: agility and extreme speed; benchmarking; hard work; and convergence. The last one “corresponds to the idea that previously a new product contained a new technology,” Park explains. “Now, the strength of companies lies in their ability to integrate and mix multiple technologies in a single product.” It’s a process that benefits Samsung, whose diversification was initially seen in a negative light, but is now a source of success.
South Korea has thus become an Asian power to reckon with, after quickly recovering from an economic crisis. Within the first two decades of the 21st century, its digital sector evolved from being part of a thriving private sector to becoming a pillar of the country’s economy.
Virtual reality and augmented reality
On February 5, 2013, President Park Geun-Hye delivered her inaugural address before a huge and organized crowd gathered in front of Gukhoe – the South Korean National Assembly. Colorful fanfares and military parades succeed each other to welcome the newly elected executive. Dignified and proud in a military jacket, the first woman to lead the country outlined her plans for South Korea.
“A creative economy is defined by the convergence of science and technology with industry, the merging of culture with industry, and the emergence of creativity in the boundaries that were once blocked by barriers. It goes beyond the rudimentary expansion of existing markets, creating new markets and new jobs by building on convergence. At the heart of the creative economy lies scientific technology and the information technology industry, areas that I prioritize.”
Her plan was to focus production on the service and virtual industries. Digital has undeniably become South Korea’s strength, and the state has been capitalizing on that since 2010. In 2014, the Ministry of Science announced that it would invest about 1.3 billion euros in mobile infrastructure by 2020 in order to launch a 5G network next decade. 5G promises to be a thousand times faster than 4G, which is itself already twice as fast in Korea than in the United States.
To do this, South Korea is devoting a substantial part of its GDP to research and development – 4.3%, more than Germany, the United Kingdom or even the United States. Its objective is to become a leader of the fourth industrial revolution: “a huge revolution led by ‘hyperconnectivity’ based on the Internet of Things, a ‘superintelligence’ based on big data, artificial intelligence, augmented reality and virtual reality,” says KwangYun Wohn. “To this end, Korea is making a huge effort to develop policies and strategies that generate phenomenal change in different aspects of the national system such as the economy, culture or social security.“
On February 10, 2017, the excitement was palpable on Digital Media City’s high-tech grounds, west of Seoul. A hall was full with people who had come to celebrate the inauguration of KoVAC (Korea Virtual Reality – Augmented Reality Complex). A few men on stage waited patiently for the signal to begin. A female voice, followed by the rest of the assembled people, started to count down: 3, 2, 1 … Confetti cannons were launched and fountains came to life to thunderous applause: the Korean cradle of virtual reality was born. It was a government initiative, who a year prior had announced it wanted to make virtual reality a “growth engine.” KoVAC is divided between startup offices and labs and experimentation areas. A total of 2,200 experts are expected to work in the premises.
“Halfway through 2014, Samsung Electronics began collaborating with Oculus to develop HMD mobiles,” says KwangYun Wohn. “I think that was the starting point when virtual reality became increasingly attractive to the general public in Korea. Since then, our hardware companies like Samsung and LG have launched various virtual reality devices on the global market, such as headphones and 360° cameras.” In terms of software, however, mainly small and medium-sized companies develop this type of product: Skonec Entertainment, d’strict, or SK Telecom, one of the main telephone operators in the country. “Although the interest in VR started with a small US company called Oculus, the South Korean industry has very positively received this device, and quickly caught up to other countries’ progress.”
“With virtual reality, South Korea would also like to spread ‘hallyu’ content to the rest of the world – that is, Korean pop culture – through music and TV shows,” says Wohn. The country’s small population and its two competing neighbors are Korea’s main obstacles. Its limited market, however, is what’s pushed it to cross borders and to adapt to a foreign clientele. Exporting cultural content is the new challenge facing the country.
“We are introducing virtual reality systems to the market, even imperfect ones, and then we are developing more innovative systems by offsetting weak points and merging related technologies based on market feedback.”
Local response is the first sign of success or failure when new products are launched on the market. Korean are shockingly receptive to new technologies and have enthusiastically embraced the quickly changing digital landscape.
“The country of the quiet morning” is a misnomer: “Palli! Palli!” – “Quickly! Quickly!” is South Korea’s catchphrase. “If you compare with France, everything is extremely fast in Korea. Speed is very important when it comes to planes, trains, subways … everything is on time. Punctuality is essential and Koreans are not very patient,” says Jimmyn Park. “In Paris, it took me a month to install my Internet at home. In Seoul, it’s done in less than a day!” Is it national impatience that has shaken up technological development? South Korea boasts the highest acceptance rate in the world when it comes to accepting new technologies. With 18.9 million subscribers to fiber optics (out of 51.25 million inhabitants, as opposed to only 2.65 million in France) and 70% of the population owning smartphones, South Koreans are an audience of early-adopters.
“The Japanese occupation between 1919 and 1945 played a fundamental role in this respect,” says Jimmyn Parc. “To this day, we still carry a sense of shame which may explain why, unlike France who can glorify its history, our country associates the past with the bad and the new with the good. I think that largely explains why new technologies are so easily accepted in South Korea. The country has been able to bring about a radical change in lifestyles, making digital developments one of the pillars of education for younger generations.”
In the streets, on the subway, and in restaurants throughout Seoul, Kakao Talk’s bright yellow logo could be seen on everyone’s phone two years ahead of WhatsApp’s green icon or Facebook Messenger’s blue one. Local, popular apps don’t buy into Silicon Valley’s minimalist designs, which might explain why they haven’t appealed to foreign audiences. The capital’s promise of constant, ultra-connectivity allows for frantic and immediate consumption. Since 2011, Tescos has installed advertising posters that act as virtual shops at bus stops: a customer scans a product’s QR code and orders it automatically. There are vending machines for just about anything – including socks – and restaurant tables each have a bell – to end any wait time.
In Seoul, the digital world even hopes to dispel dark thoughts in a country where suicide is the leading cause of death among 10-40 year olds. Straddling the Han River to connect Mapo-gu to Yeongdeungpo-gu, the Mapo Bridge is one of the most famous sites in the South Korean capital, as well as one of the most popular places for Koreans to take their life. Since 2012, the bridge has become an emblem of the fight against suicide. As you cross it, brightly colored signs read “I love you,” “We are with you,” and even “Do not leave us” to ease distress and loneliness. A message from… Samsung Life Insurance.
Digital saturation is, indeed, beginning to worry the government. 20% of South Korean teenagers suffer from digital addiction. Government-sponsored 12-day “digital detoxification camps” now propose to cure these youths. In the beautiful South Korean mountains, smartphone addicts come to cleanse their minds, exercise and relearn to socialize in reality, without their devices. “I have established relationships on the Internet, but I have distanced myself from my real friends,” says one of these young people, who hopes to build a healthier relationship with his smartphone.
It’s a challenge that must be addressed, but it won’t stop the country in its race to digital supremacy. If it has not yet beaten the US giants in terms of innovation, South Korea is nevertheless far from its benchmarking beginnings. It also enjoys its ability to change its citizens’ lives, while remaining aware of the limits of its home market and its need to adapt to other countries. But all over the world, we fight over the new Samsung Star Was vacuum cleaner, which was perhaps first imagined in Gangnam District.