US export du jour: Korean entrepreneurs

By Felix Salmon
November 30, 2011
Max Chafkin reports:


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South Korea, by rights, should be an entrepreneurial paradise. It’s rich, and growing fast, and well-educated, and urban, and open, and has the best IT infrastructure in the world. But it’s also very conservative, as Max Chafkin reports:

Jiho Kang, who is chief technology officer of a start-up in California and CEO of another one in Seoul, says that when he started a company after high school, his father, a college professor, kicked him out of the house…

To many South Koreans, being an entrepreneur—that is to say, going against the system that made the country rich—is seen as rebellious or even deviant. “Let’s say you’re working at Samsung and one day you say, ‘This isn’t for me’ and start a company,” says Won-ki Lim, a reporter for the Korea Economic Daily. “I don’t know how Americans think about that, but in Korea, a lot of people will think you of you as a traitor.” …

The penalty for failure is even more onerous for female entrepreneurs. When Ji Young Park founded her first company, in 1998, her bank not only required her to personally guarantee the company’s loans—a typical request for a male founder—it also demanded guarantees from her husband, her parents, and her husband’s parents. Park persevered—her current business, Com2uS, is a $25 million developer of cell-phone games—but her case is extremely rare. According to the Global Entrepreneurship Monitor, South Korea has fewer female entrepreneurs, on a per-capita basis, than Saudi Arabia, Iran, or Pakistan.

Markets, however, tend to find a way around such obstacles. And in the case of Korea, it’s a very interesting one: Korea is, essentially, importing its entrepreneurs from the US. Ambitious Koreans who are born or educated in America are going back to Korea — where the opportunity space for entrepreneurs is much less crowded than it is here — and making large, swift fortunes.

In the grand scheme of things, this has to be positive: good for Korea, certainly, and good for the world. But is it good for America that many bright Koreans are setting up shop over there rather than over here? Chafkin hints that it isn’t — that Korea’s gain is America’s loss. But I’m willing to let this one slide, especially on a day when US immigration policy seems likely to become just a tiny bit more sensible.

The US has always been the biggest importer of entrepreneurs on the planet. It’s perfectly OK if we export some as well. After all, a strong and economically vibrant Korea is very much in the US national interest.

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