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China, Japan, South Korea's lost golden generation China, Japan, South Korea's lost golden generation
by Joseph Gatt
2019-06-16 07:20:34
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President Park Chung Hee of South Korea (1961-1979) would spend every morning of every day, including weekends, discussing the economy with his advisors, and no stone was left unturned. He would then spend the afternoon discussing security with his advisors, and no stone would be left unturned. He would then spend evenings planning for the short-term, medium-term and long-term. And in the morning he would check the results of the previous work day with his advisers.

His daughter, Park Geun Hye, wasted excessive amounts of time screening resumes to hire her personal trainer, or screening resumes to hire her makeup artist, and excessive amounts of time on decorating the Blue House and choosing the presidential car. Park Geun Hye did not want to be bothered with the economy or with security, and her advisers were hesitant to see her as she never showed the slightest interest in what her advisers had to say. Park was notorious for asking for reports that she never read, and for other wasteful bureaucratic moves such as asking her advisers for daily work reports, which she would constantly return and complain that the format was not being respected (in Korean “bangshiki teulyeosso, tashi he”.

asiagener1_400This was the South Korean presidency. But at the business level, in China, Japan and South Korea, you had a golden generation of businessmen in the 1970s and 1980s all the way to the 1990s who had a clear vision for where their business was going. In the 1970s China, Japan and South Korea competed for being world leaders in textile, in the 1980s world leaders in shipbuilding, chemicals and steel and in the 1990s in electronics.

But the golden generation was getting old or passing away, and their children were more concerned with hiring drivers and decorating their homes than in helping their business move forward. China, Japan and South Korea ran out of business ideas to a certain extent.

In 2000, global business was no longer electronics and textiles and chemicals, but retail, software and internet technology. Conglomerates in Western Europe and North America merged or bought each other up for more efficiency, but Japanese, Chinese and Korean conglomerates were not very interested in mergers and acquisitions.

While the golden generation of the 1970s and 1980s consulted a great deal, their children did not want to consult on business or cultural issues. Consultants in China, Japan and Korea were wasting their time and money as East Asian conglomerates do not hire consultants.

Korea, China and Japan also has few or no immigrants. The idea is if you have Mexican immigrants in the US for example, some of them are going to be criminals, but some of them are also going to help conglomerates make business deals with Mexico. In an era of globalization, East Asian conglomerates did not consult with experts, nor did they consult with locals when doing business overseas.

While Korea, China and Japan had a big name in the 2000s, starting 2010, a series of failed deals between East Asian nations and many of the world's nations meant many nations no longer trusted China, Japan and Korea when it came to business.

Furthermore, East Asian nations resorted to a business model where they would survey the economies of Europe and North America, copy local products and try to sell them. Problem is, East Asian nations were always one or two steps behind when it came to their products.

When East Asian economies started hitting alarming levels, nearing recessions, East Asian economies resorted to threats to Europe and North America, and threats among each other. That is East Asian leaders refused to admit that the reason they were failing was because their CEOs were more worried about home decoration and the brand of car they were driving than by keeping profits up. And when profits didn't go up, they “lost face” and tried to “save face” by threatening competing economies.

Another problem with East Asian economies is that shareholders have very little say in business policy. They attend meetings, keep quiet, and agree to most of what they are told. There's also a huge gap between business goals and what is actually being done within the business.

So East Asia needs to bring back its golden generation, the parents' generation, that generation which worried about getting business done.

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