World Economy

S. Korea Needs Creative Reset

S. Korea Needs Creative ResetS. Korea Needs Creative Reset

The sorry state of world economics has a growing number of economists writing eulogies for the globalization model. Hans-Paul Burkner, president and CEO of the Boston Consulting Group, disagrees, to put it mildly.

The German-born financial expert claimed it will be critical for developed economies to continue to commit in encouraging migration and the flow of goods, services and capital in face of daunting economic challenges, Money reported.

South Korea has enjoyed rapid economic growth in the past decades, thanks to export-oriented industrialization strategies that produced a magnitude of change that took a whole century for Western economies. Now it must find ways to avoid the structural problems being suffered now in Europe and Japan, Burkner said.

The financial crisis triggered by the collapse of Lehman Brothers in 2008 has exposed the structural flaws in rich nations, such as increasingly top-heavy population structures and declining productivity. However, Burkner believes this also accelerated the transfer of economic and political power to emerging markets, or in his words, ‘’the East and the South,’’ a rebalancing that has so far defined globalization.

Korea is already one of the fastest aging societies on the planet and its ineptitude in fostering a strong consumer economy to balance its strength in exports continues to sting. It’s also critical for Korean leaders in government and companies to discard their outdated brand of unilateral leadership and embrace diversity in ideas and decision-making processes.

‘’Korea needs to recognize that the country needs a reset,’’ Burkner, 60, said in a recent interview with The Korea Times.

‘’Historically, a top-down direction setting and systems to enforce acceptance and adherence to such leadership was the prevailing mindset. This was the case in both the political and corporate domains. It certainly was an effective way to bring Korea from poverty to the economic power it is today,’’ he continued.

‘’Today Korea is a $20,000-plus gross domestic product (GDP) per capita economy. People will no longer be willing to accept one right way of doing things. Leadership in government and at companies needs to become more diversified and participative. Rules and laws need to be applied to everyone in the same way. Creativity needs to be fostered, beginning through the education system. People need to be exposed to a more diverse set of issues and beliefs.’’

The global economy has been battered by a heady mix of negatives, highlighted by the financial turmoil in Europe, faltering recovery in the United States and a lethargic China, and concerns continue to rise as the slowdown spreads around the world.