US export du jour: Korean entrepreneurs

By Felix Salmon
November 30, 2011
Max Chafkin reports:


" data-share-img="" data-share="twitter,facebook,linkedin,reddit,google" data-share-count="true">

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.

6 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

I suspect the author’s perspective on the “lack of entrepreneurs” in Korea is skewed by his focus on dot.coms and inability to speak korean. There are plenty of small companies in Korea, what is lacking is mid-sized ones.

As for leaving Samsung, the reason they will see you as crazy is because you will have had to fought tooth and nail to get in and there are alot of social goodies that come with being a mid-level person in such a company that you will need to be very very successful to overcome as a CEO.

Posted by Danny_Black | Report as abusive

Felix,

You could not be more wrong with your support of the “sensible” immigration policy. It’s an epic fail brought to you by the “Commerce” [aka Big Business] dept.

Jobs “requiring” H1 visas don’t pay anything resembling a competitive salary because it’s modern day indentured servitude. What you’ll find is that any company that can get an H1 will pay them significantly less and work them more.. because the threat is “We’ll throw you back to (India/China/Vietnam)!” You have to work for that company for 4 years (or more depending on position) at the ridiculously low salary they “offer,” because it’s not just an at-will job, it’s a contract.

Why hire an American when they can low-ball some foreign kid with no friends in that city to work 80 hours a week and never complain?

And don’t be confused about the quality of work: Even if it’s just IT, “outsourced” code regularly has to be redone in the US by the few older Americans who have the skills.. at twice the cost because the foreigners didn’t comment and did a shoddy job. This bill surely does, however, increase the potential profits of multinationals because now they don’t have to pay things like a “competitive salary” to those positions any more.

The only way the US could actually decrease the unemployment rate of engineers and scientists in the US is by eliminating the H1 visa entirely.

Posted by Unsympathetic | Report as abusive

Felix,

You are indeed right about South Korea has the best IT infrastructure in the world and also very conservative. There is some information that requires further recent information on Korean entrepreneurs. I am now in middle of my 20s and university graduate in London and hold a graduate program offer as an analyst with one of a prominent investment banks in the World. I have the following concerns for your post.

Some of your evidences are not up to date at all in regard to a public perception on starting up the new company is no loner held as going against the system. The point I am making here is that younger generations do not regard starting up a new company goes against system. I have seen at least 5 to 6 friends of mines who have graduated from Stanford, Yale and Harvard had come together under my former internship at KPMG Korea and expressed a great deal of interest in starting up their countries in both US and Korea. We commonly share the viewpoint that when we are born as Korean, there will be definitely need to work for Korea at certain point of time.

Cultural aspect has not clearly taken into account. Your concept of importing and exporting the entrepreneurs between US and Korea is also despicable as you do have clear comprehension of how SMEs are evolving and competes one of the toughest market in developed nations where US has better environment and policies for entrepreneurs and for the new start ups by also taking into account the size of economy between two countries.

If your argument is held to be true “ The US has always been the biggest importer of entrepreneurs on the planet. It is perfectly ok if we export some as well”, what is happening with the US economy with failing SMEs and worsening economic national account figures? I clearly do not see correlation between number of entrepreneurs export to foreign nations and productivity in your country. So, I guess this proves that Korean’s gain is America’s loss might not be true

Posted by MINDGAME | Report as abusive

Felix,

You are indeed right about South Korea has the best IT infrastructure in the world and also very conservative. There is some parts that requires further recent information on Korean entrepreneurs. I am now in middle of my 20s and university graduate in London and hold a graduate program offer as an analyst with one of a prominent investment banks in the World. I have the following concerns for your post.

Some of your evidences are not up to date at all in regard to a public perception on starting up the new company is no loner held as going against the system. The point I am making here is that younger generations do not regard starting up a new company goes against system. I have seen at least 5 to 6 friends of mines who have graduated from Stanford, Yale and Harvard had come together under my former internship at KPMG Korea and expressed a great deal of interest in starting up businesses in both US and Korea. We commonly share the viewpoint that when we are born as Korean, there will be definitely need to work for Korea at certain point of time.

Cultural aspect has not clearly taken into account. Your concept of importing and exporting the entrepreneurs between US and Korea is also despicable as you do have clear comprehension of how SMEs are evolving and competes one of the toughest market in developed nations where US has better environment and policies for entrepreneurs and for the new start ups by also taking into account the size of economy between two countries.

If your argument is held to be true “ The US has always been the biggest importer of entrepreneurs on the planet. It is perfectly ok if we export some as well”, what is happening with the US economy with failing SMEs and worsening economic national account figures? I clearly do not see correlation between number of entrepreneurs export to foreign nations and productivity in your country. So, I guess this proves that Korean’s gain is America’s loss might not be true

Posted by MIND_GAME | Report as abusive

“It’s perfectly OK if we export some as well.”

We? Is Salmon an American citizen? But I suppose all the colonies treat the imperial capital as home.

Posted by billyjoerob | Report as abusive

Good article and right to the point. I am not sure if this is actually the best place to ask but do you guys have any thoughts on where to hire some professional writers? Thanks

Posted by traduceri daneza | Report as abusive