A step towards a new leap

On the first business day of 2018, CEOs of major companies have laid out their New Year’s Day address. “Radical changes in the paradigm of the IT industry such as artificial intelligence, self-driving, and big data are requiring new challenges,” said Samsung Electronics CEO Kim Ki-nam. “We should not be overconfident about last year’s best performance.” Hyundai Motor Chairman Chung Mong-koo ordered technology investment expansion, saying, “The car industry is changing fast as future technological innovation is accelerating and competition is getting fierce.” SK Chairman Chey Tae-won proposed “Deep Change 2.0,” which pursues to keep up the good work on what they have done well and become great in areas that they have not touched upon yet, while asking to pursue economic and social values together. The vocabularies that appeared the most in the New Year’s address by five major companies are innovation and change.

In terms of index, South Korea’s economic report card is not so bad. Export led by semiconductor was 613 trillion won in volume, marking the highest since 1956, when trade statistics started to be recorded. In this backdrop, the government had expected Korea to record 3.2 percent of economic growth last year. Nevertheless, corporations speak out crisis and request proactive change and innovation because they recognize the uncertainty over the Korean economy this year seriously. In 2018, barriers including the “3 increases,” i.e., increase in global interest rate, increase in oil price, and increase in the value of won, along with strengthened protectionism of the United States and China, as well as minimum wage rise and corporate income tax rate increase, are hindering business activities.

The Dong-A Ilbo is publishing a series called, “30,000 innovative entities will lead a 30,000-dollar Korea” as the new year’s project. It intends to seek the path the Korean economy needs to take by highlighting technologically innovative corporations being created in a breathless pace around the world and the role of governments supporting them.

“Let us make efforts together to enjoy a quality of life in accordance with gross national income per capita of 30,000 dollars that we will be able to accomplish this year,” said President Moon Jae-in at his New Year’s Day address in Cheong Wa Dae. However, improved quality of life that is in line with an income of 30,000 dollars cannot be realized with just a slogan. It is critical for the government to encourage private entities’ efforts to promote innovative growth.

Just because we enter an era of 30,000 dollars in GNI per capita does not mean that we can enter the 40,000 dollars range with just time. In 2008, South Korea recorded a GNI per capita of 32,000 dollars but at the same time witnessed the fall of Greece, which had to experience financial crisis as a result of ignoring structural reform of the industry and public reform. The future of South Korea reaching 30,000 dollars of GNI per capita depends on how much the government supports companies’ innovative growth during the period of the 4th industrial revolution.