New Way of Thinking Creates a New Economy
01/07/2019

New Way of Thinking Creates a New Economy
– Park Won-soon’s 10 Proposals for Economic Revitalization

1.

Dear citizens of Seoul and fellow officials of the Seoul Metropolitan Government,

It seems only yesterday that I first came to work as the mayor of Seoul with the conviction in my heart that “Citizens are the mayor,” and it has already been seven years since my first day in office in 2011.
In retrospect, it is refreshing to think about the past journey in Seoul.

Over the past seven years, Seoul has innovated itself by shifting its focus to ’people,’ ‘care,’ ‘respect for labor’ and ‘community,’ and as a result, Seoul has turned into one of the most livable cities in the world.

The Seoul City has placed ‘people’ before anything else which had previously been pushed back behind ‘development’ and ‘growth.’ It has worked tirelessly to make structural changes in its municipal services so that the municipality can bear the weight of life together and share each of its citizens’ burdens collectively with no one left behind.

In May 2018, Seoul City won the Lee Kuan Yew World City Prize of Singapore, referred to as the Nobel Prize for cities in the world, and this was a symbolic incident which confirmed that Seoul has become one of the best cities in the world.

All these changes have been possible due to the engagement of all of you, the ten million citizens of Seoul.
My fellow officials of the Seoul Metropolitan Government have made great contributions to the city’s achievement, too.
I am deeply grateful for all your hard work.

2.

Korea is going through tough economic times.
Many citizens of Seoul are having a hard time.
Those who have to scrape by are faced with an emergency warning light in their lives.
Income inequality has widened further, and social imbalance and inequality have become a norm.

Future prospects are not bright, either.
In addition to worsening income inequality and a low economic growth which has become a pattern in Korea, the country is being further challenged by imminent risks such as the low birth rate and rapid ageing of population.

Self-employed businesses that account for 30% of the national economy are on the brink of collapse.
Many young people are spending their golden years preparing for employment tests in libraries after graduation from school.
Along with an extremely low birth rate, women’s career disruption due to childcare has emerged as a serious risk to the national economy and the approaching future.

We must face facts first before we can talk about hope in the horizon.
We can start talking about the economic recovery of Korea only when we have the courage to admit the difficulties we are faced with and reflect on our past mistakes.

Looking back, we can see that after the country’s industrialization and democratization, we have failed to find an alternative to developing our national economy in a rapidly changing global economic landscape in preparation for the coming future.
The logic of our economic discourse is still confined within the framework of conglomerate-centered economic growth, with the fruits of the national economic growth being monopolized by the select few to a greater degree.
Over the years, we have failed to create a new momentum in our national economic growth, nor have we succeeded in accomplishing the transformation of our national economy from a catch-up economy to an innovative economy.

To resolve such structural problems of our national economy, the Moon Jae-in administration has sought to achieve a paradigm shift to a people-centered economy backed by income-led growth, innovative growth, and a fair economy.

To shift the focus of the country’s industrial policies and achieve a manufacturing renaissance, the new administration has launched an Expanded Meeting with Economy-related Ministers.
We anticipate that the national economic system disrupted during the Lee Myung-bak and Park Geun-hye administrations to become normalized and vitalized gradually.

Seoul City will actively cooperate with the government for our mutual growth.

3.

Dear citizens of Seoul and fellow officials of the Seoul Metropolitan Government,

Seoul will take the lead in trying to revive the national economy.
Of course, there are limits to the capability of a local government to revitalize national economic growth due to limited policy instruments, countless regulations, and limitations in authority that it could tap into.
However, no matter how rough the road may be, we can never give up without even trying.
We must not avoid taking on challenges on the grounds that our efforts might bring little effect.

With all the resources that it could ever mobilize, the Seoul Metropolitan Government will concentrate on promoting economic growth, urban industrial rejuvenation, and innovative startups in the city.
While actively cooperating with the central government’s new economic policies, the Seoul Metropolitan Government will request bold deregulation measures while increasing its fiscal support for local government initiatives.
When it comes to reviving the economy, both the central government and local governments must do their very best.

4.

Existing businesses must grow while startups actively emerge so that the economy in Seoul can regain its vitality, the key to which lies in the full-scale establishment of Innovation Growth Hubs in the city.

Building momentum in the economic growth of Seoul and Korea through the creation of a massive innovation ecosystem is Park Won-soon’s first proposal to change the fundamentals of the national economy.

Through my New Year’s message last year, I announced the municipal government’s plan to build six Innovation Growth Hubs.
They include the Integrated R&D Cluster in Magok, the Media City Project in Sangam, the Biomedical Cluster in Hongneung, the Music Industry Project in Changdong, the Digital Cluster in Gaepo, the AI-Centered R&CD Cluster in Yangjae, and the International Exchange Complex in Yeongdong to surpass that of Marina Bay, Singapore.
To accelerate the progress, we will complete the Sangam and Magok projects and concentrate on promoting the cluster projects in Hongneung, Changdong, Gaepo, Yangjae, and Yeongdong districts.

Urban industries that used to be the pride of Seoul over an extended period have continued to decline and deteriorate. My second proposal is to bring innovation to urban industries with new visions and contents befitting the 21st century.

Manufacturing industries in urban centers should no longer be considered outdated. They are invaluable venues with potential for great industrial innovations.

Examples of such venues include the Dasiseun redevelopment project in Jongno 3-ga, the Fashion Town in Dongdaemun, the Jewelry Shopping Street of Jongno 2-ga & 3-ga, the Herbal Medicine Street of Dongdaemun, the Printing Alley of Jung-gu, the Electronics Market in Yongsan, and the Used Car Market in Janganpyeong.
In addition, we will enable small-scale manufacturers and handicraft technicians in the city to operate from the city’s smart anchors to maximize the synergistic effect of their operations.
We will make their long industrial history an asset accumulated from years of experience rather than a debt by incorporating new ideas of the youth into their time-honored industrial know-how.
The declining urban manufacturing industries going through a harsh winter will turn into a spring of innovation filled with the flowers of life.

5.

Dear citizens of Seoul and fellow officials of the Seoul Metropolitan Government,

My third proposal to change the economic landscape of Seoul is the promotion of innovative startups.

For the past 20 years, the list of the top 20 companies in Korea has remained unchanging.
During the same period in the United States, about half of the top 10 companies have been replaced by Apple, Google, Amazon, Facebook, et cetera.
It has been quite some time since startups in Silicon Valley began to serve as the country’s future growth engines.

Zongguancun, the technology hub of Beijing, produces global enterprises such as China’s largest Internet portal ‘Baidu’ and the world’s largest online gaming company ‘Tencent.’
In the United Kingdom, the government-affiliated organization Tech City Investment Organization has provided its full-fledged support for the development of a ‘Tech City’ in London.

Major countries around the world are already creating most of the new jobs through innovative startups.
We will find an alternative for our national economy in innovative startups.
For the future of our national economy, we will support technologies that create jobs and invest in ideas that will change the world.
We will develop Seoul into a city where startups thrive like flowing rivers and blooming wild flowers.

① First, we will expand and reinforce our startup infrastructure.
We will increase the number of startup spaces run by Seoul City from a mere 40 to around 100.
Seoul City has established Seoul Startup Hub and Seoul Innovation Park which have already developed into world-class startup spaces. Rather than being complacent with the accomplishment, we will work hard to create a startup space in each community throughout the city so that everyone who want to start their own business can settle down for future growth. In addition, we will join forces with Google and D-Camp (Banks Foundation for Young Entrepreneurs) to host Seoul global startup camps. We will also help startups take full advantage of the spaces provided by the private sector, like WeWork, at reasonable prices. We will enhance cooperation with Silicon Valley of the USA, Zhongguancun of China, and various Israeli startup organizations.

We will also expand our financial support for startup companies. We have prepared to set up the Seoul Future Growth Fund worth 1.2 trillion KRW which we will invest in more than 2,000 Seoul-style innovative startups based on the core technologies of the 4th Industrial Revolution. I will also take the lead in attracting overseas funds to Seoul.

② Second, we will turn Seoul into ‘a testbed for public policies’ for industrial revitalization of the 4th Industrial Revolution and create an innovation ecosystem in the city.

Seoul City will play the role of a testbed for innovative technologies and support the startups’ new technology verification process. We will provide startups with full support customized for their needs in the whole process including technology development, commercialization, marketing, and global market entry.

Utilizing the know-how accumulated by Seoul Urban Solutions Agency (SUSA) that has been exporting first-hand experiences of Seoul to 57 cities around the world, we will actively support our country’s small and medium-sized enterprises and startups make inroads into overseas markets.

③ Third, we will realize the dream of making Seoul the best startup city not only in the Republic of Korea, but also in Asia.

Silicon Valley is a massive innovation ecosystem built by talented people who have gathered from all corners of the world. A great number of young people from the European continent are crossing the borders to Berlin, Germany to start their new business. We will make Seoul City a city of dreams for all young potential entrepreneurs in Asia.

Recently, Seoul City signed a visa waiver agreement with the Minister of Justice for foreigners planning to start businesses in Seoul.
We will also set up a one-stop service system for foreign entrepreneurs with high potential and provide them with support for office and accommodation spaces.

6.

Dear citizens of Seoul and fellow officials of the Seoul Metropolitan Government,

Park Won-soon’s fourth proposal to facilitate national economic recovery is making investments in people.
‘People’ are the most important element in both the economy and innovations.
The best strategy to realize the ambitious plan of Seoul City is making investments in people.

People that we need now are ‘convergent thinkers’ that can find solutions and lead innovations in innovative workplaces.
We will establish innovation schools like ‘Ecole 42’ in France to cultivate such convergent thinkers.
Through the schools, we are planning to produce more than 4,500 young people who could play a leading role anywhere in the world.

To help them successfully function in companies or start their own businesses, we will establish an organization devoted to the promotion of cooperation between the Seoul Metropolitan Government and universities so that the innovation schools can focus on producing talented people demanded by businesses on-site instead of those who appear good in their resumes.

Entrepreneurship by definition involves a challenging spirit.
We will build social foundations that will empower not only the citizens of Seoul City but also all those foreign nationals who dream of living in the city to take up the challenge and start their new business in Seoul at any time.

7.

My fifth proposal to revitalize the national economy is in assisting corporations.
Corporations are at the core of our economic activities.
They create jobs, accumulate national wealth, and are the engines of a national economy.

One of the biggest tasks of the central and local governments is to support and encourage them to create many quality jobs, generate high revenue, pay a fair amount of taxes, and develop future growth engines.

Seoul City will actively support anyone who would help revitalize the economy, create jobs, and invest in the future.
We will go the extra mile to help big businesses equip themselves with even stronger international competitiveness while providing particularly robust support to more than 1,300 mid-sized businesses in the city in order for them to develop into big businesses.

However, we must place top priority on small and medium-sized enterprises. We will have to identify their difficulties and come up with customized support measures.
Our national economic strategy must focus on achieving economic growth largely through innovation led by small and medium-sized enterprises, moving beyond the traditional big business-oriented economic growth depending on their competitiveness in pricing and investment.
Along with the central government, we will sharply increase our fiscal support for R&D activities of small and medium-sized enterprises.

Furthermore, we will also take active measures to attract foreign corporations.
In 2016, we attracted 9.5 billion USD in Foreign Direct Investment, the highest record in history. To break the record yet again during my term, we are determined to do everything in our power to make Seoul City an attractive place to live in for foreign companies and foreign nationals.

That way, we will make Seoul City a metropolis where a larger number of new businesses get created and develop more substantially than ever so that everyone in Seoul will be able to meet with greater success.

8.

Dear respected Seoul citizens and fellow officials of Seoul City,

My sixth proposal to revive the national economy is the realization of a fair economy and the enhancement of economic democracy.

Seoul City has already advocated and implemented the so-called ‘WECONOMICS,’ meaning ‘economy for all.’

We need a robust four-wheeled vehicle to go through the harsh terrain we are in, and the four wheels we require are the development of big businesses, the growth of SMEs, the establishment of a labor-respecting society, and the realization of economic democracy and a fair economy.
Our conviction about the vision and the direction will never falter.

The biggest obstacle to our advance toward a new era and new economy is a serious inequality, or the so-called ‘99:1 society.’ A new economic paradigm must start from the elimination of such extreme inequality followed by the establishment of a balanced economy and a fair economy.

A fair economy is critical for innovative growth.

We will promote economic democracy more strongly so that SMEs can compete with big businesses on a level playing field and the results of innovative growth can spread throughout the society in a fairer way.

9.

It is our urgent task to rescue the self-employed businesses pushed to the brink of life.

Rescuing self-employed business is my seventh proposal to revive the economy.
Accounting for about 30% of the national economy, self-employed business is the backbone of our economy.
Only when villages and alleys restore their vitality can the national economy become steady.
We will make sure that people of self-employed businesses can increase their profits, and we will expand the social safety net.
No store should close its doors due to unreasonably high rent after having successfully operated through the owner’s hard work and sacrifice.
Through the introduction of a paid sick leave system and the support of employment insurance premiums, we will reduce the financial burdens of self-employee business people.
We will lay the foundation for the growth and innovation of self-employed business people. We will back up the central government’s eight key policy tasks designed to promote their capacity-building efforts.
In cooperation with the central government, we will make sure that the scope of the commercial building lease protection will be expanded through gradual elimination of the conversion deposit system, and the Zero Pay system that we have initiated will take root successfully.

10.

Dear citizens of Seoul and fellow officials of Seoul City,

A new era requires a new economy.

Our national economy has already advanced to a point where the traditional catch-up approaches no longer work.
Instead of following in others’ footsteps, we need to create a new economic model and continue to innovate it.

Yes, that is the way.
My eighth proposal to revive the national economy is the creation of a new economic model suitable for the new era.

Freitag of Switzerland uses waste materials to produce goods that are not available anywhere in the world. The products sell out rapidly despite their high prices.
The upcycling industry and the handmade economy including that of handmade shoes have already emerged as an alternative.
Social economy accounts for 20% of the French economy. It has also taken root elsewhere as part of the mainstream economy.

In addition, the era of possession is being taken over by the era of sharing.
Above all, the world’s business is being dominated by platform companies that invite people from all over the world to implement creative activities collectively.

The modern society is fractured, decentralized, and complex, with walls making it hard for anyone to enter a new area. We need to demolish such walls through innovations aimed towards promoting convergence and connectivity.
We must continue to create a new economic model through cooperation among local governments, integration of IT with BT and NT, and combination of technology and humanities.

We will make sure that such changes and creative activities will take place in Seoul.
We will hold world-class hackathon and startup events in Seoul.
Creating new trends and a whirlwind of innovation are the ways to build an innovative economy where Seoul and the Republic of Korea will lead the world at the forefront instead of trying to catch up with others.

11.

My ninth proposal to revive the national economy is self-reflection, soul-searching, and innovation starting from within Seoul City.

Korea has poured an enormous amount of funds and resources into supporting SMEs, traditional markets, and startups. Although it has implemented more considerable support policies than any other country, why have we not produced satisfactory results? Why has Korea not seen multiple new unicorn companies emerging yet? We need to reflect carefully on such issues.
Our country’s R&D expenditure stands at 4.5% of its GDP, which is the highest in the world.
However, Korea ranks 26th in the world in terms of technology transfer by public research institutions and industry-academic collaborations.

We must examine ourselves carefully regarding bureaucratic approaches and excessive regulations, neglect in on-site communications, and lack of understanding about changes in the horizon.
We have to ask ourselves whether our economic policies have been aimed at suppliers instead of consumers.

To restore the vitality of the national economy, Seoul City must take the lead and start innovations from within.

When the central government approves of our plan to appoint two deputy mayors instead of one as it has promised, we will appoint an economic expert with corporate backgrounds to one of the posts at all costs.
We will have the deputy mayor take charge of overall economic policies and corporate support policies of Seoul City.

We will create an economic policy framework to support businesses more effectively, and we will carefully evaluate the performance goals of our policies in order to reduce errors and mistakes related to the policies.
In the process, we will keep communicating with businesses while giving and receiving ample feedback.
We will ensure that policies will be properly implemented in efficient and productive ways in Seoul City.
Through the most efficient budget implementation practices, we will strive to produce 100 units with an input of 1 unit.

Dear citizens of Seoul,
From now on, instead of just Seoul City, please call our city with the name of Special Economic City.

12.

Dear respected citizens of Seoul and fellow officials of Seoul City,

In the past Deng Xiaoping of China had said, “It doesn’t matter whether the cat is black or white as long as it catches mice.” He led the Chinese economic reform with this so-called ‘Black Cat, White Cat’ theory, laying the foundation for China to emerge as the second strongest economy in the world.

Likewise, I think practical and field-oriented approaches are what Korea needs in order to overcome our current crisis of national economy and of ordinary citizens’ livelihood.

All along, I have cherished practical philosophy, innovation strategies, and entrepreneurship. I have also done my very best to put them into practice.
When attacked as a left-winger, I replied that I was neither right-wing nor left-wing, but that I was only of the ‘citizen-wing’ if I had to belong to a wing.
Armed with the spirit of entrepreneurship in the past, I have founded the Beautiful Store and developed it as a social enterprise which grew to become the best social enterprise in Asia with 30 billion KRW in annual sales.
In the past I have also established the Hope Institute and developed it into the best think tank of the Republic of Korea through ‘the Silhak Movement of the 21st Century.’
What matters are practical visions, strategies, and actions based on real situations in the world.

It is in that context that I am heading to meet the corporations that moved in to the Yangjae R&CD Innovation Hub right after this New Year’s kickoff meeting is over.
Without any filters, I will listen to the vivid voices of corporations.
I will no longer wait for corporations to come and see me, but will instead go and meet them in their workplaces.

Exactly as I did when I was elected as mayor of Seoul for the first time seven years ago, I will go out and meet citizens in their workplaces.
I will go wherever my presence is requested by citizens regardless of who opposes it for whatever reason.
I will open ‘the Mayoral Office of Innovation’ in places where citizens struggle daily to survive and locations where citizens rise to challenges and make innovations.

Yes, focusing on the field instead of the office is my tenth proposal to revive the economy.

13.

Dear respected citizens of Seoul and fellow officials of Seoul City,

Everyone talks about the difficulties faced by the Korean economy.
Regarding the prospects of our economic growth and development in the future, the vast majority of people overwhelmingly voice pessimistic views.

However, I would prefer to be on the optimistic side.
I do not deny that our economy is going through difficult times.

Looking back, the question seems to be whether there has ever been a time when our economy was not in a difficult situation.
In every crisis, we were united to take on challenges and overcame the crisis with confidence.

Indeed, we ended up further developing our economy after we struggled with each crisis.

I know that the process is far from easy.

However, we all know that history has always been on the side of optimists who courageously take on challenges with positive thinking and an optimistic attitude.

That is right.
Positive thinking and optimism are the best strategies to turn the hope for our economy into reality.
I believe that the best way to revive the economy is to arm the citizens with positive thinking, optimism, challenging spirit, and courage.
Let us join forces to tackle our challenges head on.
During the rest of my term, I will invest all my efforts in finding the solutions to the problems of citizens’ livelihood while making changes in municipal service more deeply, more broadly, and more sustainably.

Regarding numerous questions about a better tomorrow in the midst of any transition, the answer has always been ‘citizens.’
It is my great privilege to have ten million citizens to serve.
Let us move forward together to complete the 10-year revolution of improving the quality of life for the great citizens of Seoul City.

Thank you.

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