Remember back in the day, everyone was hooked on to Gangnam style! Yeah that was 2012. But, Korean pop culture was famous even before Gangnam Style. Since 1999, South Korea had a seen huge growth potential through their cultural economy. Throughout the 2000’s South Korea experienced something known as the “Korean Wave.” The Korean Wave or the “Hallyu” was one of the major reasons behind South Korea’s cultural and economic growth. So, how did “Hallyu” help in helping South Korea’s economy?
It all started in 1990 when the South Korean government removed the ban on South Korean travelers for international travel. This made way for a number of Koreans to explore the western world, mainly to the US and European countries. Many pursued their education in these countries and others started their careers in esteemed companies in the Europe and the US before returning to Korea during the late 1990s. Also, one thing to notice here is that during the late 1990’s East Asian countries had suffered from a severe financial shock, which had left them with serious image problems. Many global stakeholders at that time believed Korea was in bad shape, so the country lost foreign direct investments, lacked tourism, and faced global skepticism.
But, as we all know every cloud has a silver lining. During the early 2000’s Korean economy was on the rise. Many brands like Samsung gave birth to an enhanced push for internationalization as its owners sought new growth outside Korea. Global companies like LG, Hyundai also increased their operation scale and started gaining world attention.
Throughout the 2000s, pop singers BoA and Rain had turned heads everywhere. So did wildly popular soap operas like “Winter Sonata,” which morphed actor Bae Yong-Joon in becoming Asia’s superstar. They sparked tourism crazes as Japanese, Chinese and Singaporeans landed in Busan, Jeju and Seoul. But, Psy’s ubiquitous “Gangnam Style” pushed a Seoul neighborhood into the global spotlight. And that when we come back to the first line of this article. You see, Gangnam style was the beginning of K-pop songs which reached the western world. That’s when South Korea got immense attention in the music industry.
In the recent annual 2019 ranking by Interbrand of the world’s top 100 brands, Samsung was listed as the 6th brand in the world with brand value of USD 61.1 billion. LG has transformed itself from a manufacturer of cheap products to a brand of repute. Hyundai, which was once the source of jokes in the US industry due to its horrible quality, is now touted as one of best quality cars in the market and is competing head on with the Japanese giants Toyota and Nissan. One of the major reasons behind the rise of these companies was the rise of K-pop.
In short, the Korean wave was a huge success. According to the Korea Foundation for International Cultural Exchange, the Korean wave contributed USD 9.5 billion to the Korean economy in 2018. In 2019 alone, total Korean wave related tourist spend is USD 1.1 billion and that Hallyu-related tourism made up 55.3% of all inbound tourism. In 2019, Korea earned USD 21.5 billion from tourism, attracting a total of 17.5 million tourists. With South Korea’s international tourist growth forecasted at an annualized rate of 3.3% to hit around 1.8 billion by 2030.
But, the underlying thing to notice here is that South Korea has improved its image. It has been provided with an excellent opportunity to showcase its diverse culture, people, its unique entertainment products, exotic locales and its own Pan-Asian superstars to the rest of the world. This thereby creates a very strong brand named Korea.
If you enjoyed reading this post, a like would be awesome. Comment below your thoughts on the Korean Wave and let me hear your stories too. If you are new here, do drop a follow. Check out my previous post here. You can now follow me on twitter as well. Stay tuned for more posts by The Antique Economist. This post is the 2nd article of my new blog series: Economics Behind. This series will talk about various things we may or may not notice and find an economic connection to it. Hope y’all like it. 🙂