What is Korea’s national brand?

By Peter Petri

We still have a month or so left to enter the Essay Contest on Korea’s National Image. The idea is to come up with a “national vision, image, brand or slogan” for the Republic of Korea. It should not be hard to beat their current one: “A member of the 21st century global community whose contribution and cultural influence continue to increase.” Winners get a Korean laptop, tablet or digital camera. (I guess they won’t get a Korean cell-phone because everyone already has one.)

Country brands are in these days. There is even a company that publishes a Country Brand Index based on five dimensions: value system, quality of life, business environment, heritage and tourism (see rankings at the bottom).

Why is Korea looking for help from us? Well, Korea ranks 42nd, way below its GDP rank (15th) and even per capita GDP rank (34th). Embarrassingly, it ranks below many smaller and economically less important countries, even in Asia. So in 2009 President Lee established a Presidential Council on Nation Branding headed by the president of a prestigious university.

Korea does have a distinctive brand, but I see it as different from the soft, smiling one, with beautiful temples, as on the website. To me Korea is the toughest, most strategic, most “can do” country in the world. It pulled itself up by its bootstraps from poverty and devastation following a half century of Japanese rule and the brutal Korean War into the ranks of high income countries, mostly in one generation. In that time it also transitioned from a hard military dictatorship to a vibrant, if harshly competitive, democracy.

Korean economic strategies included an early focus on labor-intensive manufactures, then a large effort to replicate Japan’s conglomerates (chaebol in Korean), and dramatic drives to capture some of the most competitive industrial markets in the world, including ships, steel, memory chips, automobiles and consumer electronics. Within three decades Korea went from low-end imitator to high-end innovator–although a San Diego court recently told us that this is not quite true yet for Samsung. Remarkably, Korea has also become East Asia’s Hollywood, producing music, movies, television shows and rock stars that beautifully blend traditional and contemporary culture, as for example in this video.

The strategy forward appears to be similar and is based on two pillars. The first is to transition to “industries of the future.” Industrial policy is hard because no one, and especially not governments, can foresee future technologies (the generals certainly didn’t plan the rock stars part). Decades of World Bank experts visiting Korea—including me at times—advised Korea to forget about targeting industries and concentrate on fundamentals, such as good laws and banks, high quality education, and efficient transport, energy and communications. Korea did all that, but also “picked winners,” often successfully.

The second pillar is a remarkable trade policy that has concluded, or will soon conclude, free trade agreements with virtually every trade partner that matters, including the European Union, the United States, Southeast Asia, India, and lots of others. Korea’s big, competitive neighbors are next on the list: negotiations are underway with China and Japan. Korea may become the first major trading economy to face virtually no barriers to its exports!

President Lee is now making large bets on green technologies and software. I am still cautious about betting on specific industries, but Korea as a whole is a safe bet. Investment rates are high, Korean students always rank at the top in science and math, and internet penetration is higher than in the United States. Their trade policy will work. And whenever the government finds something that doesn’t work, it rapidly finds a solution. One can imagine a national brand based on a combination of Mohammed Ali, Deng Xiaoping and Steve Jobs (tae kwon do masters with PhDs?), but I think the contest judges have something warmer and fuzzier in mind.

Country Brand Index values, 2011

Top 10

Bottom 10

Asia-Pacific

1

Canada 104 Senegal

3

New Zealand

2

Switzerland 105 Ukraine

4

Japan

3

New Zealand 106 Paraguay

5

Australia

4

Japan 107 Bangladesh

16

Singapore

5

Australia 108 Nigeria

18

Maldives

6

United States 109 El Salvador

26

Thailand

7

Sweden 110 Libya

29

India

8

Finland 111 Iran

42

South Korea

9

France 112 Zimbabwe

43

Malaysia

10

Italy 113 Pakistan

45

Fiji

59

Vietnam

61

Nepal

65

China

76

Indonesia

78

Philippines

80

Laos

83

Cambodia

107

Bangladesh

111

Iran

113

Pakistan

Source: FutureBrand, Country Brand Index 2011-2012.

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