Going Krazy for Korea

Such structural reforms are urgently needed for “K” to continue to shine.

Kim Won-bae

The author is the director of economic and industry news at the JoongAng Ilbo. It’s been some time that certain industries have adopted the prefix “K” before their names. It may sound like excessive patting oneself on the back, but it is actually paying off in some areas.

At the end of October, the Korean and Polish governments, Korea Hydro & Nuclear Power (KHNP), state-owned Polska Grupa Energetyczna, and Polish private power generation company Ze Pak signed an MOU and a letter of intent (LOI) to develop nuclear power plants in Poland. A nuclear power plant project promoted by the Polish government was won by Westinghouse, but a private-centered project could be won by Korea. Poland took a two-track approach.

But there will be many challenges before the deal is sealed. The Korean nuclear reactor was developed based on the technology of Combustion Engineering (CE) of the United States, which was acquired by Westinghouse in 2000. Based on this, Westinghouse filed a lawsuit against KHNP, arguing the technology could not be exported without permission. KHNP claims it will not be a major obstacle.

Westinghouse is said to lack construction capability because it has not built a nuclear power plant for a while. Last May, Westinghouse signed a strategic agreement with Hyundai Engineering & Construction to enter the global nuclear plant market. Korea has the ability to build nuclear power plants much cheaper than the United States. If the Yoon Suk-yeol government and succeeding administrations consider nuclear plants as strategic and promote consistent support measures, it will bring good results.

Next is defense. The Ukraine war is unfortunate, but the demand for weapons has skyrocketed. Poland, a member of NATO, has decided to buy a large number of weapons from Korea.

On October 19, Hanwha Defense and Hyundai Rotem held an event in Changwon, South Gyeongsang to release K9 self-propelled howitzers and K2 tanks to be sent to Poland. The basic contract was signed in July and the implementation contract in August, but the release ceremony was held in just two months.

Korea is the only country in the Western world that can supply new tanks and self-propelled guns right away, and that is why Poland chose Korea. Korean weapons are also considered to have excellent performance for the price.

The success factor of K-pop is also similar. Famous music critic Kim Young-dae wrote last year, “The lineage of American boy bands has virtually been cut off … It is K-pop that has dug into this gap.” It can be interpreted that as groups like New Kids on the Block no longer emerge in the U.S., K-pop groups filled the gap. While the Japanese pop music industry is obsessed with copyright, Korean entertainment agencies targeted the world by posting free videos on YouTube.

The American Music Awards, a popular music award in the U.S., created a K-pop category this year. It shows the growing influence. Kim, the music critic, said, “In essence, K-pop does not shake the foundation of the Anglo-American pop industry itself, but it is now likely to be a subject of close watch, as Korean artists show commercial power in various awards and charts in a more powerful way than Western pop stars” It is in the same context that Westinghouse is filing a lawsuit against its rival KHNP.

Korea has already produced global companies in several manufacturing sectors. The newly spotlighted defense and nuclear plants are not just manufacturing industries. They can only succeed when backed by the status of the country and government support. Popular music must overcome language and cultural barriers.

Of course, the achievements of defense, nuclear plants and K-pop were not attained overnight. After accumulating its competitiveness by imitating the technology and culture of America, Japan and Europe, the potential of K-pop finally exploded. Even if there is a vacancy in a K-pop group, not everyone can fill it. Only those who are prepared can take it.

But it is no longer possible to make hit products just by following other successes. An education system that fosters creative talent should function efficiently, and companies should be allowed to do business free from excessive regulations. Such structural reforms are urgently needed for “K” to continue to shine.