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K-pop: South Korea’s New Economic Growth Engine

Tuesday, November 8th, 2011

South Korea’s highly-developed IT industry is a technical marvel, and Korea was the first emerging nation to host the G20 Summit, when the group of 20 top world leaders gathered in Seoul in 2010 to talk about the global economy. In addition to the IT economic flow, there has been a cultural movement known as Hallyu, or the Korean Wave.

By the early 2000s, after the 1997 Asian financial crisis, the Korean government had begun targeting the export of Korean popular culture as a new economic initiative. President Kim Daejung established the foundation for this cultural industry promotion in 1999 by allocating US$148.5 million towards it. Since then, Koreans have provided their own twists to foreign styles and forms by blending and adding their traits and unique flourishes in innovative ways, combining the best of their cultural past with a dynamic future in nearly every arena.

Korean popular culture has subsequently become one of the most beloved pop cultures among Asian fans over the last 10 years. Many people have also recently come to see Korean popular culture as new and trendy, as well as containing traditional Korean values and sentiments.

The rise in K-pop popularity and the dissemination of Korean popular culture throughout Asia is unprecedented and fascinating. Over the past decade, South Korea, with a population of around 50 million, has become the hub of Asian culture, churning out entertainment that is coveted by millions of fans stretching around the globe. For example, Girls’ Generation, comprised of nine young pop singer/dancers, has become a YouTube sensation, and their song Gee has been seen over 50 million times. Their popularity has led to fans in Paris and Los Angeles, where crowds emulate their idols’ dances and demand that they hold concerts there.

K-pop has the potential to become a new economic growth engine, by fueling exports and improving the country’s overall image abroad. It has moved beyond Asia and started to make inroads into Europe and North America, where it is generating positive publicity that may translate into more exports down the road. Yonhap news agency recently cited a South Korea-based newspaper as saying, “The popularity of groups such as Super Junior, Girls’ Generation, TVQX, and Wonder Girls can boost South Korea’s national image and make it more competitive in the cultural arena.”

SM Entertainment and other similar agencies have succeeded in designing and seeding Korean pop culture in foreign markets to expand their global appeal. These talent agencies resemble the old Hollywood studios in terms of their organization and contractual relationship with their stars. Each have hundreds of young talents who can sing, dance, act, and speak foreign languages. K-pop has been popular in countries such as Japan, China, and many Southeast Asian countries for many years. It is no longer the exclusive property of cult fans but is instead growing popular among a broader market. The Korea Trade-Promotion Agency (KOTRA) announced the results of a recent survey after its overseas Korean Business Centers in 94 regions studied Korean Wave trends and K-pop abroad. KOTRA identified six countries including Uzbekistan and the Philippines where the Korean Wave is in its growth stage, indicating huge popularity but with sales of related products in the initial stage.

At this point, the local music market needs a new digital music distribution platform, such as a Korean version of iTunes, not only to allow purchasing and sharing of music, but also to put K-pop into a more polished stage.

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