Korea as Number One | Prestowitz
Talk of the Day -- South Korea no longer sees Taiwan as rival - CNA ENGLISH NEWS
One thing I might add is that Koreans do not see China as a rival either. Like Taiwan, Chinese do not have what it takes to challenge Koreans in high-value market segment.
Korea as Number One
Posted By Clyde Prestowitz Thursday, June 7, 2012 - 9:01 PM
In 1979, Harvard professor Ezra Vogel's book, Japan As Number One, became a runaway best seller in both Japan and the United States. After a swing through Asia the past two weeks, it's clear to me that Ezra needs to do a rewrite with a new title: Korea as Number One.
The South Koreans have long been confident that anything the Japanese can do, they can do better, but now they're proving it. In the 1970s-80s, the likes of Sony, Panasonic, Sharp, Toshiba, Hitache, NEC, and Fujitsu killed off RCA, Motorola, and the rest of the American consumer electronics industry and came close to killing off Intel and closing down the U.S. semiconductor industry from which Silicon Valley takes its name. Yet, today, it's the Japanese who are on the ropes as the likes of Samsung, LG, and Hynix have seized the high ground. Whereas Sony used to be the king of TV, now it's Samsung. Developed initially in the United States in response to military needs, the market for flat panel electronic displays was quickly taken over by the Japanese who out-invested the American producers and whose dominance of television and then of VCR production gave them an in-house source of demand for mass production and its related economies of scale.
Well, in the past month, both of Japan's main chip makers (Elpida and Renasas) have declared bankruptcy while leading flat panel maker Sharp is selling off pieces of itself to Taiwan's HonHai. Rudely pushing the Japanese aside are South Korea's Samsung, LG, and Hynix. Nor, is it only and electronics phenomenon. In the auto industry South Korea's Hyundai/Kia Motors is gobbling up market share in the U.S., European, Chinese, Indian, and Southeast Asian markets at the expense of the Japanese producers. The same goes for shipbuilding and even soap operas where the Korean shows are even all the rage in Japan. Perhaps most telling is the fact that South Korea's GDP per capita is now about 90 percent of Japan's and appears to be on track to surpass Japan's in the next couple of years.
To achieve all this, the Koreans have used a well known, tried and true formula. For starters, they have worked like crazy, saved like crazy, and invested like crazy. At the same time, like the Japanese, they have rejected American ideas and advice about specializing only in what they do best and trading for the rest. Rather, they have concentrated on developing world class capabilities where before they had none. They did this by protecting and subsidizing in various ways new, infant industries like steel, consumer electronics, and semiconductors. But they also knew their own market was not big enough to yield the necessary economies of scale. So they have had to focus on exports and become competitive in global markets by keeping their currency, the won, somewhat under-valued and by often selling abroad at prices below their own domestic prices. The most successful Korean companies are either those like steel maker Posco that was founded with government investment or those like Samsung that are giant family dominated conglomerates with extensive special relationships with the government and monopoly or quasi -monopoly positions in many interlocking industries and technologies.
This is, of course, the classic Japanese formula. It is the formula Lee Kuan Yew of Singapore had in mind when the advised his countrymen to "look East" for a model to imitate for their own development. It really works, and the Koreans are again proving that anything that works for the Japanese can be made to work better by Koreans.
Talk of the Day -- South Korea no longer sees Taiwan as rival - CNA ENGLISH NEWS
Talk of the Day -- South Korea no longer sees Taiwan as rival
2012/05/29 19:37:31
South Korean media have reported that from June, the country's per capita GDP will surpass US$20,000 and its population will exceed 50 million, making it the seventh full member of the "20-50 Club" of developed countries.
While Taiwanese still think of South Korea as a member of four "Asian Dragons," South Koreans have long given up the idea that they need to compete with the other Asian Dragons -- Taiwan, Singapore and Hong Kong.
South Korea is now competing with Japan and Europe, and Taiwan is no longer even on its list of rivals, according to the United Daily News, a major Taiwanese daily.
Below are excerpts from the daily's reports on South Korea's advancement and Taiwan's response to the latest developments:
South Korea's per capita GDP surpassed Taiwan's in 2004. In 2011, it was US$22,480, compared with Taiwan's US$20,139. The International Monetary Fund forecast that the average South Korean annual income will top US$30,000 in 2016. A longer term forecast puts it at US$65,000 by 2050.
Taiwanese love to see South Koreans as an economic rival. However, a visit to Seoul will tell you that South Koreans have long quit mentioning the term "Asia's Four Dragons," as they no longer see Taiwan as a rival but are competing with Japan.
Regarding Taiwan, South Korean academics were interested only when reporters from this newspaper talked about the Economic Cooperation Framework Agreement (ECFA) between Taiwan and China.
One South Korean expert on industry said that Taiwan and South Korea went on different paths in the wake of the 1998 Asian financial crisis, with Taiwan focusing on contract manufacturing while South Korea concentrated on developing its own brands.
Although the expert made remarks that the economies of Taiwan and South Korea supplement each other, he was actually hinting that Taiwan and South Korean cooperation will follow the mode of the economic relationship between Taiwan and Japan.
In Taiwan, Economic Planning and Development Minister Yiin Chii-ming said Taiwan does not have to follow the same path as South Korea.
One thing I might add is that Koreans do not see China as a rival either. Like Taiwan, Chinese do not have what it takes to challenge Koreans in high-value market segment.
