A few weeks ago, somebody asked me the secret to South Korea’s success. Not being an economist, I couldn’t give an authoritative answer, so I replied by saying simply that Korea invests in its people. An increasingly skilled and talented workforce has allowed Korea to become a leading nation in a range of economic endeavors.
Continued growth, however, is not guaranteed. Nations throughout history have risen and fallen in response to economic and technological paradigm shifts. The same holds true for regions and cities. During the first half of the 20th century, Detroit boomed as the capital of the US automobile industry, but began to decline rapidly in the 1960s as the US automobile industry lost its competitive edge.
Japan, which long served as a model for Korea’s development, boomed after World War II as it exported consumer goods to a growing middle class in Europe and North America. Japanese cars, cameras and electronics were everywhere. By the mid-1980s, it was on the verge of overtaking the US as the largest economy in the world. The boom stopped in the 1990s when Japan failed to adapt to the rise of the internet. The rise of Korea, Taiwan and later China made it difficult for Japan to compete in many industries that it had once led.
Korea may be at a similar inflection point. Korea was the overwhelming leader in shipbuilding but has fallen behind China in recent years. Manufacturing is leaving Korea for competitors such as Vietnam.
To avoid the hollowing out that ravaged Detroit, Korea will need to develop new, more advanced industries to maintain its edge. To do so, it needs to identify something the world needs. What could that be?
As worries about climate change have become mainstream, political pressure is building. Meanwhile, the increasing severity of fine dust in Korea has increased pressure on the government to find a solution. Though more resistant to public pressure, China is searching for ways to reduce pollution after years of rapid economic growth. There is, clearly, plenty of demand for renewable energy technologies that will help move the world away from its dependence on fossil fuel.
At present, Korea is comparatively weak in renewable energy technology. This helps to explain why only 2.6 percent of electricity production in 2016 came from renewable sources. Korea ranked No. 9 in the world in electricity production, but all the other producers in the top 10 derived at least 10 percent of their electricity from renewable sources.
Solar energy is the fastest-growing type of renewable energy, and China is leading the way. Of the top 10 producers of solar panels, six are Chinese and only one is Korean. The four largest producers are Chinese, and China produces nearly 60 percent of the world’s solar panels.
Wind energy is another growing renewable, but no Korean company ranks among the top 10 turbine producers. Vestas, the leading company, is based in Denmark, and other European companies are major players in the market, but three Chinese companies rank in the top 10.
Korea also lags behind China in electric car production. China accounts for over half of global production. Korea has moved up to No. 5 in the world, but China still produces 10 times as many electric cars as Korea. However, Korea is a leading producer of batteries for electric cars.
In 2008, the new administration of former President Lee Myung-bak began pushing for “green growth” to promote national competitiveness in environmentally friendly industries. The push waned after former President Park Geun-hye moved into the Blue House in 2013. Lee has joined the disgraced presidents’ club, but the idea of promoting “green growth” was a good one.
Demand for renewable energy technology is booming and Korea should be a major player as it has been in other lucrative industries, such as shipbuilding and automobiles. Currently, China is dominant with Europe, North America and Japan showing strength in selected areas. The boom is rapidly creating jobs. The US government, for example, has reported that the two fastest-growing professions are solar panel installer and wind turbine service technician.
As part of its fight against fine dust, the government could set the goal of generating 10 percent of its energy from renewable sources within five years. It should also fund education and training programs in renewable energy technology.
Korea is good at rallying around ambitious goals. Putting that energy to work now could turn the country into a renewable energy powerhouse in no time.
Robert J. Fouser
Robert J. Fouser, a former associate professor of Korean language education at Seoul National University, writes on Korea from Pawtucket, Rhode Island. He can be reached at email@example.com -- Ed.