New York: Oxford University Press, 2016. xviii, 281 pp. (Tables, figures.) US$65.00, cloth. ISBN 978-0-19-022879-8.
Korea has achieved compressed growth, going over the past six decades from one of the poorest countries in the world to one of the world’s top 15 countries in terms of GDP. Although many studies have attempted to explain the driving forces behind Korea’s economic success, this book deals with the topic comprehensively and systematically.
The book interests by its twin approach to analyzing Korea’s economy. In part I, the author takes a traditional approach to describe the fundamental elements in the foundation of Korea’s economic development (e.g., human resources, capital resources, and total factor productivity). From part II, the author introduces a new framework for examining the past, present, and future of the Korean economy, the so-called ABCD model (agility, benchmarking, convergence, dedication). This innovative model consists of four factors and eight subfactors. The first factor in the model, agility, refers to speed (or pali pali in Korean) and precision and is cited by many observers as the most defining characteristic of Korean culture. A culture of agility provides a valuable contribution to consumers and a nation’s economic development.
The second factor, benchmarking, consists of learning and best practice. Here the author suggests that by benchmarking advanced companies’ technologies, Korean firms could increase their own competitiveness with smaller investments in time and money than is required to invent independent technologies.
The third factor, convergence, refers to mixing and synergy creation through related-industry diversification, which helps Korea sustain prosperity. And the final factor, dedication, is a laudable cultural element of the Korean people, who work diligently and in a goal-oriented manner. Simply speaking, Korean firms and employees work very long and hard to accomplish their goals.
The adoption of the ABCD model makes it possible to chronologically analyze, from a time series perspective, Korea’s past, present, and future. The author looks at Korea’s economy from a bird’s eye view, taking a holistic approach to the Korean economic landscape. Yet he also includes a microscopic perspective, allowing him to scrutinize Korea’s cases horizontally and vertically. The model also analyzes many cases by comparison across different groups of countries (such as developed and developing countries) and firms (for example, newly emerging companies and their matured counterparts), which makes the book comprehensive as well as systematic.
In explaining the factors of economic development at a national level, the existing approaches deal with tangible factors such as capital, labour, technology, and natural resources. The ABCD model, on the other hand, focuses on intangible factors and subfactors. In particular, although a country lacks competitiveness in tangible factors, the author emphasizes how to gain intangible competitive advantages through an ABCD strategy. This is one of the positive messages in the book. In addition, when inspecting the implementation of ABCD strategies toward internationalization, this book offers multiple real-world examples as well as facts about Korea relative to international cases at both the national and firm levels. This approach makes the book theoretical as well as practical and can provide insight into other developing countries.
After reviewing the past strengths of Korea through the ABCD approach, in part III, the author addresses three significant challenges (e.g., an unproductive service sector, underdeveloped sociopolitical system, and aging population) facing present-day Korea. The author seems to consider these challenges as byproducts or side effects (or anti-products) of Korea’s rapid economic growth; by using the ABCD approach, he also suggests strategic guidelines to solve these problems and upgrade Korea’s competitive advantage. His suggestions are reasonable and agreeable.
Regarding the unproductive service sector, I propose that more attention should be paid to the fact that Korea’s recent economic slowdowns stem from structural problems, not only limited to the service sector, but in the labour market, small and medium-sized enterprises, and other areas. In order to solve these problems, the study recommends broad structural reforms. The second challenge, an underdeveloped sociopolitical system, is related to a lack of social cohesion that stems from factors such as high inequality, restrictions in upward social mobility, high levels of corruption, among others. While many challenges are addressed, environmental issues are noticeably absent: the greenhouse gas emissions rate in Korea, for example, is relatively high in comparison to other OECD countries. The United Nations’ Sustainable Development Goals of 2015 also identify these environmental issues as high priority items that need to be addressed going forward.
I enjoyed reading this book and would recommend it to policy-makers in developing and developed countries interested in learning about Korea’s economic successes, as well as to the general public. It is encouraging that Korea has transitioned from aid recipient to aid donor, as signaled by its joining the OECD’s Development Assistance Committee in 2009. This book can be a knowledge-sharing work to aid developing countries. The ABCD model is a novel approach for investigating an economy at the macro and micro levels, as in the author’s study of Korea’s miraculous growth. This study may also prove useful for researchers or businesspeople seeking to enhance national and corporate competitiveness, as it is rich in content and practical lessons.
Wankeun Oh
Hankuk University of Foreign Studies, Seoul, South Korea
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