Korean Wave Boots Economic Growth

Introduction:

Korean Wave or hallyu refers to the growing popularity of Korean entertainment, culture, dramas and music in other countries, particularly in East and Southeast Asia. China and Japan were first exposed to South Korean dramas in 1990s. However, Korean dramas also became popular in Middle Eastern countries, such as Iran. With the exports of Korean dramas, Kpop music sprung up.

The Korean government took full advantage of such culture phenomenon and utilize its media industries to expand exports of Korean dramas and pop music. This expansion has greatly contributed to South Korea’s economy.

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Korean wave seems to have entered a golden age. Such culture phenomenon not only benefits to tourism and exports of related products, but also help improve Korea’s national image. Korean governments are spending a lot of money in developing such business. In 2013, the South Korean government budget related to Korean Wave increased by 27.3%, equivalent to $68.7 million. Thanks to Korean Wave, improved national image leads to increasing exports, and therefore leads to the growth of manufacturing industry.

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Hallyu definitely has positive influences on the economy of South Korea. According to analysis conducted by Hyuandai Research Institute, when exports of culture products increase by 1%, exports of all consumer goods increase by 0.03%. Economic effects of Korean Wave-related business, including production, added value and employment, reach $4.87 billion per year.

When it comes to China, it is reported that the Korean Wave started in China sometime around 1997 when the drama What is Love All About provoked great reactions among Chinese audience after its broadcast. Since then, Korean television dramas have taken airtime on television channels with faster and faster speed. With the development of Internet, more and more Korean drama resources could be watched online. Because of high popularity, Chinese video websites give a long price for popular Korean dramas. More and more people in China are willing to pay the copyright.

Korean stars have made a big impact on the consumer culture, including food, fashion, make-up trends and even plastic surgery. Overseas fans travel to Korea to buy those products. The economic effect of the Hallyu was estimated to be $11.6 billion in 2014, an analysis by Korea Trade-investment Promotion Agency and the Korea Foundation for International Culture Exchange. And the cosmetics industry enjoyed the biggest growth, increase by 57%, as tourist from other countries vising Korea boosted sales. Tourism also left positive effect on employment since the industry created 24,520 jobs.

There is no doubt that Hallyu greatly stimulate exports. Exports of culture content and consumer goods increased by 8.4% in 2014, which was $6.16 billion. The increase is 2.3% higher than the country’s total export growth in 2013, indicating that Korean Wave led in overall exports.

As Hallyu moves towards the future, it will have a greater role in South Korea’s economy.

 

Reference:

http://www.elon.edu/docs/e-web/academics/communications/research/vol2no1/09suejin.pdf

http://blogs.transparent.com/korean/the-korean-wave/

http://businesskorea.co.kr/english/news/lifestyle/5623-hallyu-splash-economic-effects-korean-wave-underwhelming-past-15-years

http://koreajoongangdaily.joins.com/news/article/Article.aspx?aid=3003773

 

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5 Responses to Korean Wave Boots Economic Growth

  1. Sike Dong says:

    Interesting article about Hallyu. As a Chinese, I understand how popular such Korean Wave is in China and this trend is expanding to the whole world now. I think Korea may be the only country that exports its culture so successfully. Moreover, its driving effect is terrific.This wave improves Korea’s traveling, food and even cosmetic industries. Actually, I am curious about this wave. Since we all know behind this success is the high expenditure. An entertainment company need to expense a lot to train a new star, but the current entertainment industry upgrade rapidly. This means the competition would be cruel and sometime fans are picky. How can this wave continue to succeed? Will Korea Wave be replaced by others in the future just like Japan before?If so, how the Korea’s economy would be and what the effects are on Korea’s trading?

  2. Ziyu Zhou says:

    The first time I heard about Hallyu is… in the middle school I think. From my Mom. She was crazy with Korea drama and so do lots of Chinese people. Until now I still dared not touch any Korea drama in case of addicting in them. But the Hallyu is not just including drama, music or stars, but also including publisher, cartoon, video games, advertisements and others. From 1990 since the success of drama in the worldwide, Korea insure the strategy of “cultural based country plan” and the government established the specific culture department to support the development of cultural creative industry.

    At that time, China just got out of the planning economy and went the first step of market economy. Why a small country could have stable status in the world, China and Chinese government really need to consider the meaning of Hallyu. From a report of Korea Import and Export Bank, every $100 increase in Korea cultural creative industry could generate $412 in Korea’s exports. The impacts of Hallyu create unbelievable profit in various industries. Even though China has long history and advantages of culture and innovation in the past time, now the culture impact of China, especially for the economic part, still weaker than that of Korea. Korea culture could be popular in China for 20 years, indicates that the demand of China is large but the domestic culture product could not satisfy this demand. We need to figure out how to push the Chinese cultural connect with the world demand and how to stimulate the innovation of culture in the right way.

  3. Angela wu says:

    Indeed the Koreans did a great job in promoting this Hallyu trend. Many of my friends are very interested in learning Korean as a result of their addiction to Korean pop culture. Although most of the fans for Korean pop cultures are either Asian Americans or International Students but I do see more and more people of other ethnicities gaining interest in Kpop. In my opinion, Brandeis University is another great example of the successful spread of Hallyu. in 2011 when I first arrived in Brandeis in pursuit for my undergraduate degrees, Korean language was not available as a language course. But, if I recall correctly, by the time of my senior year the first Korean language class was established due to high demand for Korean culture studies.

    However, it is still highly uncertain how long will this trend continue. We’ve seen similar trends in the past with Hollywood movies provoking a fascination with American culture and Japanese Animes stimulate wide spread interest in Japanese culture and products. My concern is that if this Hallyu trend stops, would the Korean Economy be strong enough to continue its growth and development or would it be catastrophic to the Korean export industry.

  4. zhuanghm says:

    The soft power of South Korean is rising dramatically. It seems that at least one of culture products from South Korean such as songs, TV dramas or movies will hit the world market every year. It is partly because of government support. The Asian financial crisis of 1997 revealed a weakness in Korea’s reliance on big conglomerates, and Kim Dae-jung, the president, responded by pushing the development of the IT and content (film, pop and video-games) industries. Now, the culture industry has formed its own business model including their training and selection of stars, their promotion strategies and so on. Also, their creativity on variety programs has brought a large revenue by selling the patents.

    On the contrary, Chinese government has stressed many times to rise the culture soft power. However, it is apparent that the imports of culture in China is far more than exports. The influence of Chinese culture is still limited, especially in the movie and entertainment field. The culture industry needs to manufacture and coordinate the upstream and downstream. it is critical to cultivate talents to make innovation and forget about copy and imitation.

  5. Kaiyue Wang says:

    I remember my first exposure to Hallyu was at the beginning of 2000, when the Korean drama “Autumn in My Heart” was introduced to China. Since then, various kinds of Korean elements have been influencing our life, including music, make-up, clothing and food. The commercial appeal of movie stars and k-pop is even huger than most of the politicians today. The young generation regard those stars as “idol” and are willing to pay a significant portion of salaries in order to support their idols. Korean government and entertainment companies have clearly seen the business opportunities and formed a product line, which absorbs capital from all over the world.

    In addition to the accurate control of consumers’ mentality, the success of Hallyu is also attributed to good relationship between South Korea and other countries. In my mother’s generation, Japanese drama was extremely popular. However, when the relationship between Japan and China became intense in the late 1980s, China restricted the cultural imports from Japan and began to seek new partners.

    We cannot deny that South Korea has one of the most advanced entertainment industry in the world. Many countries like China are trying to copy the success of Korean Wave and develop their own popularity, but people will finally get tired of the same business model. Therefore, innovation is needed.

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