I recently attended Kimex 2004, the Korea International Machinery Expo, in Changwon, Korea, a city about 30 miles west of Busan.
Given all the things I’ve written in Small Business Times about globalization and the effects of the China trade on US business, Korea gave me a lot to think about.
Korea is affected by Chinese pricing competition. Korea used to be a low-cost producer. Back in 1962, the per capita gross national income was about $87 U.S., and in 2003, it was $12,646. This is quite an increase and considerably above China’s quoted average per capita income in 2003 of around $750.
So Korea started out as a low-cost country but has moved up rapidly to the point where average incomes are surpassing some of the countries in the European Union.
How is Korea coping? To be honest, it is struggling, but its response to the onslaught is interesting.
Clearly, Kimex this year was noticeably different from the Kimex I attended just two years ago. The Korean companies that were exhibiting were clearly moving up the technology food chain. I saw sophisticated robotics this time. Everywhere I looked were companies that were not there two years ago dealing in higher-tech gear.
In just two years, the change was dramatic.
It is clear that Korea is trying to carve a niche for itself between the high-tech, high-quality and cost of Japan and the United States and the low-cost, lower-perceived quality of China.
At this time, that strategy seems to be working, but at some point, if they continue their growth in incomes, they will be going more head-to-head with the United States, Japan and the EU.
How will they make the transition? It is what I observed and read about the society that makes me admire a strategy in the works that will serve Korea and the world well in the 21st century.
First is education. Korea graduates more engineers and scientists per capita of population than any other country in the world. The broadness of this effort was even evident on the TV channels that I scanned through in my hotel room. Of the 30 to 40 cable channels available, at least one seemed to be devoted to math courses and at least one seemed to be devoted to English courses. There also were other language courses available and courses of other kinds. I wonder how many math or language courses are available on U.S. cable television?
When I talked to the interpreter assigned to help me in Korea, I found out he was a college student who had already served his time in the Korean military. He had been assigned during his tour of duty to be a liaison between the U.S. troops and the Korean law enforcement. His view of American youth was that they were sex-crazed and alcohol-addicted, and he told me of his almost constant duty of getting U.S. soldiers out of local jails.
He said that when he attended high school, his typical school day lasted until 10 or 11 o’clock in the evening. He told of classes lasting on some days until 7 p.m. and then having to go home to do the homework. There was no time for sports or outside activities. Korean high school students interested in college don’t take part in them.
Everywhere I went, I was impressed by the friendliness and outgoing nature of the Koreans and how hard they seemed to work. When I saw groups of uniformed students on their field trips to the same historical sites I was visiting, I was impressed by their exuberance, energy and yet courtesy to the adults around them. It was a sharp contrast to the groups of high school students I see from the United States that always seem to be so disaffected.
My travels around Korea were surprisingly simple for me, even though I did not speak Korean and after I left Kimex, I was totally on my own. It is a very beautiful country and has a rich, ancient history and culture. I’d recommend it for a vacation spot to anyone. The other nice feature is that prices for the tourist were very cheap by our standards.
One of the tours that I took was to a shipbuilding yard and an assembly line for merchant ships. The scale of the place defies my ability to describe it, and yet it was a smaller yard dedicated to the building of ships that could fit through the Panama Canal. There were other facilities dedicated to larger ships.
It blew my mind. A very high percentage of world merchant ships are built in Korea now. It’s interesting that at one time, shipbuilding was a U.S. strength, and now, the only ships we build are luxury yachts and military vessels.
Korea gave me a lot to think about. Unfortunately, when I compare where our two societies are going, I feel uncomfortable. All this talk of protectionism when what we need is a realization that our standard of living will only improve with improvements in productivity, and our future will only be bright if we educate the talent needed to be competitive in the world.
Joe Geck is a principal of Accelerated Solutions, a company focused on global success. Further information is available at http://www.global-intercultural-communication.com.
November 12, 2004, Small Business Times, Milwaukee, WI
