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Written by Dilara Bogut
Noise in the nations capital last week was not coming from the usual buzzing of busy traffic and construction, but rather from the humming of entrepreneurial innovation.
Convened at the 6th Annual GW October Conference at the George Washington University School of Business (“GWSB”) on Friday, October 16, 2015, an international delegation of policy makers, entrepreneurial practitioners, academicians, and MBA candidates met to discuss the role and future of entrepreneurial eco-systems in South Korea.
It comes with no coincidence that a few blocks down the street, South Korean President Park Geun-hye made her official visit to the White House for a meeting with President Barack Obama – marking this the South Korean leader’s second official visit to Washington, D.C. since becoming president in 2013.
While the two heads of state met to discuss issues related to South Korean and United States economy, security, and world issues; commitment to a U.S.-South Korean alliance was ratified even further as presentations and discussions on small and medium-size business development and Korean management ensued a few blocks down at the GWSB.
GWSB’s primary partner for the conference, the International Council for Small Business (“ICSB”), is the first international membership institution of its kind, founded in 1955, to promote the growth and development of small business worldwide. The organization, which brings together educators, researchers, policy makers, and practitioners around the world, has aimed and successfully delivered on sharing knowledge and expertise in this field.
Standing before a diverse audience, Mr. Donald Manzullo, President and CEO of the Korea Economic Institute (“KEI”) led the Friday afternoon plenary session to explore the programs, prioritization methods, and key indicators used by leaders in the South Korean eco-system.
“At one time, knowledge was discovered. Now, it is invented.” Dr. Manzullo’s statement resonated the importance of innovation and technology for the future of the country. South Korea has already developed 160 programs aimed at small business. Drawing in from his previous capacity as U.S. Member of Congress between 1993 and 2013 and Chairman of the Small Business Committee for the U.S. House of Representatives, Mr. Manzullo stressed the importance of government’s involvement in designing strategies to assist small and medium size businesses.
To compliment Mr. Manzullo’s statement, ICSB President Dr. Ki-Chan Kim, a South Korean national, painted a picture of South Korea’s evolvement from a country with GDP per capita of $80 in 1964 and a primary export of wigs to a country that boasts a GDP per capita of $26,205 in 2013 and a primary export of petroleum products. Tying into Mr. Manzullo’s statement that knowledge is now invented, Dr. Kim revealed the question that had formed in everyone’s mind – How could it be that a country without any natural resources – yet alone any petroleum – claim that petroleum products are its primary export?
The answer is interesting. Korea is an R&D paradox. It possesses high creativity but not as high productivity. This is Korean management, or K-Management. It is a country that has transformed itself at a remarkable level whereby special kinds of conglomerate firms that are purely unique to South Korea, called chaebols, dominate the economy and the world.
Dr. Yoon-Shik Park, Professor of International Business at GWSB and Board Member of the KEI further elaborated on chaebol dominance and their extraordinary role in developing the modern day Korean business ecosystem that everyone had convened to discuss that day.
“To reach economies of scale,” Dr. Danny Leipziger, Professor of International Business and Managing Director of The Growth Dialogue, explained, “you need size.”
“There is no great virtue in remaining small. The issue with scale is productivity.”
The focus for small and medium-size business development should not be focused on promoting gazelles, or high-growth companies that are able to increase its revenues by at least 20% annually for four years or more, but should rather be focused on government policies to remove barriers to entry.
As members of the panel went on to voice their opinions of what South Korea would look like 25 years from today, the air grew heavier as business and entrepreneurial innovation precipitated in the lecture hall and GWSB once again demonstrated its pivotal role in establishing itself as a preeminent business school focused on innovation and business ethics.
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