On Globalization of Korea
SNU Chancellor Chung points out coordination and reform on high-level education for successful globalization
Chancellor Chung Woon-chan of Seoul National University said globalization is a big trend sweeping the world from the 1990s, in association with such words as global standard, unlimited competition, transparent management, focus on profitability, market rule, and incentives, among others. The university chancellor made the remarks at the Breakfast Meeting for CEOs hosted by the Korean Standard Association on November 17 in Seoul. He spoke on "The Korean Economy amid the Waves of Globalization."He recalled that the impact from globalization on the economy was similar with the impact on people made by a large technology innovation such as computers and the Internet. Those who failed to learn how to use computers fell behind those who knew how to use them in terms of their standard of living. Korea failed to adjust its economy to the waves of globalization, not knowing the proper use of tacit knowledge in coping with the worldly trend.
The result is the foreign exchange crisis of 1978 with business firms and financial institutions failing to cope with the change in world business trends. They ignored the global standard in running their businesses with transparency and foreign companies began to withdraw their investments from Korea due to uncertainty, Chung said. In a word, a middle-level economy failed to adapt to globalization that developed in advanced countries, he stressed. Korean business firms felt the need to take on the new global trend for their survival and they had to pay dearly for the lesson. They emphasized global standard, profitability, unlimited competition, and market principle in managing their businesses. The result is they were able to improve financial conditions and financial institutions in particular had been able to reduce the amount of bad loans, the chancellor said.
The wide expansion of global standard has had its side effects in growing gap between the rich and the poor, with the demise of the middle class. A conservative trend set in the economy with businesses avoiding to make investments in fear of risks making the economy sluggish.
Korea has trouble in coping with globalization because it failed to import tacit knowledge that comes with the new global trend. The growing gap between the rich and poor and sluggish business investment are due to the lack of the tacit knowledge, he claimed. Advanced countries acknowledge competition is key to their economic progress, but they also are not stingy about giving the second chance to those who failed in competition. They have training facilities for those who want to find another job, help them find jobs and built social safety nets, which all come from the tacit knowledge on globalization.
He said incentives are important, but also equally important is coordination. The economy is complicated with its major players having incentives, requiring coordination. Its relationship can be compared to that of trees and forests. Korea needs a new mechanism to manage its economy, which is a long-term project, requiring a lot of pain. It may take from 10 to even 20 years to master globalization, a work that could be made easier through acquiring tacit knowledge, Chung stressed.
The university chancellor said the role of college education is critical in the age of globalization that needs creative people. But he said that higher education institutions are not yet ready to play its role required in the age because they have been focused on expanding their facilities only with serious side effects. There currently are 200 four-year universities and colleges, with junior colleges totaling 160 and 4.07 percent of total population enrolled in colleges and universities in Korea, the highest in the world. The quality of college education began to fall from the 1990s, along with the quality of research laboratories, the chancellor claimed. To stem the worsening situation, he recommended reducing the number of universities and colleges to upgrade their quality. The same thing can be said to graduate schools with tens of thousands of doctorate holders out of work . Those educational institutions should have their own strong particular areas of studies in tandem with their locations. nw

Chancellor Chung Woon-chan of Seoul National University delivers a speech at a meeting of the Korea Standard Association.