SEOUL, South Korea — In a country dominated by sprawling conglomerates like Samsung and Hyundai, young graduates typically covet a ticket to corporate power and affluence.
From day one, Korean schoolchildren cram late into the night, preparing for rigorous exams in English, math and science. Competition is fierce to enter a top university, and then to land a stable white-collar job as a “Samsung Man” or “Hyundai Man,” in Korean parlance.
In September, some 100,000 ambitious youngsters took the annual “Samsung SAT,” the test that the mega-corporation uses to select its first round of applicants.
The big companies treat their salarymen — and at senior levels, the vast majority are men — as family. Unwavering loyalty is expected in return. The ambiance is conservative, militaristic and risk-averse. There are no Mark Zuckerbergs wearing their hoodies to board meetings.
Now, a small but growing crowd of free spirits is taking a leap that, until recently, would have been unthinkable. They are leaving behind stable corporate jobs and making big bets on their own startups.
“Working in a big company doesn’t guarantee success anymore,” explains Jaeuk Park, the creator of Between, a mobile SMS service for couples popular in Korea and Japan.
“The older generation had more opportunities to move up in the chaebol because the country was growing like crazy,” he said. “But now there is not as much room to grow. It takes four years to become a manager, then four more years to get to the next level of manager, and 20 years to become a director.”
Guarantees of lifetime employment also collapsed in the 1990s. Now, when salarymen reach their 50s, they’re often given a bonus package and then quietly pushed out.
With few options, many settle for the relative hardship of being a driver, security guard, or convenience store owner. Considering that South Koreans are straddled with the world’s highest household debt burden, the fall from salaried work can really strain a family.
Young Koreans are beginning to recognize that the investment of time is large, the work hours are long, but the rewards sometimes fall short. It’s becoming more common, although still rare, for graduates to spend a few years in their comfortable chaebol jobs, gaining experience and an imprimatur for their CVs before moving onto their own ventures, Park said.
That’s a change from the way business has been done for decades. From the 1960s to 1990s, a handful of politically connected chaebol capitalized on easy loans, driving South Korea from agrarian impoverishment to industrialization. But that national crusade fell apart during Asia’s 1997 financial crisis, when years of collusion between politicians and businesses nearly crippled this “Miracle on the Han River.”
Since then, the nation of 50 million people has never quite returned to its breakneck GDP growth. It posted lethargic expansion of 2 percent in 2012. Lawmakers and businesspeople wonder whether the economy, hobbled by bureaucratic regulations, can finally throw off its traditional manufacturing base and build a more advanced “creative economy,” to use a buzzword popular in Seoul.
It’s a strange dichotomy for a country that is often called the most wired in the world, with its blazing LTE-A data speeds and cutting-edge infrastructure.
South Korea experienced a “first wave” of entrepreneurship in the early 2000s, but it wasn’t until recently that the startup scene really took off, says Richard Choi, the founder of Spoqa, which makes customer rewards software for small businesses.
One reason? During the Asian financial crisis, many prominent entrepreneurs couldn’t repay their loans and fell into ruin — a taboo that led to shaming and a spike in suicides.
Traumatized by the experience, South Koreans succumbed to a spell of risk aversion. For years to come, parents who invested tens (or hundreds) of thousands of dollars in their children’s education warned them not to leap into the shark tank.
Now, success stories are challenging the country’s big corporate orthodoxy. Since 2011, the number of South Korean tech startups has nearly doubled.
Korean triumphs have included KaoKao, a mobile chat service that has swept across Asia, and Sunday Toz, maker of the addicting Tetris-style puzzle game “Anipang.” The chaebol have traditionally been weak on software development, giving wiggle room to these companies.
This all came just as President Park Geun-hye appealed to popular demands for “economic democratization,” a plan that included reining in the chaebol and sewing up a growing wealth gap.
Park, who took office in February 2013, has since backed away from many pledges, but she did set up the Ministry of Science, Information-Communication Technology, and Future Planning, offering assistance to startups. In September, the national bank also increased its small-business fund to $1 billion.
Many young entrepreneurs are also going overseas, the bringing ideas back to Seoul.
Jaeuk Park, the Between founder, recently took a research trip to Silicon Valley, meeting with companies like DropBox and piecing together a sense of why northern California is so vibrant. “They have investors at every stage of the business, from when it’s small to when it gets big,” he explained, a system that South Korea is still setting up.
Of course, Korea’s laws and politics continue to favor mega-corporations at the expense of everybody else. Even the courts, citing economic contributions to the nation, are notoriously lenient toward convicted white-collar criminals, granting them short prison sentences for crimes like embezzlement and tax evasion. Convicted CEOs can usually expect a presidential pardon.
Seoul’s fledgling companies don’t have access to the same corridors of power. And big business continues to be the foundation of this economy, a fact that’s unlikely to change any time soon. But a new generation of forward-looking business thinkers is opting for a different pasture, and planting seeds for wider changes in this society.