The Next Superpower in 2012

What does it take to become the next Superpower? Who will it be? There are numerous factors involved and there is no set formula, but I believe South Korea has the essential resources to become the next Superpower in 2012.

Capital
Capital is money, technology, education, etc.

You have heard money is power, and yes, this is true, whether you like it or not. Although money may not bring happiness, it does provide the holder the opportunity for investments. Without investments, there is no potential for business development and growth. Think of starting your own business. What will you need to get started? Yes, great ideas and a business plan, but to truly implement your project, you will need capital, or a budget to do so, whether you take out a loan or accumulate it through investors.

Investments may also be broken down into 2 key factors: time and money, and since time is limited for everyone, the only real factor is money. You may think of the dinner example: you can choose to stay in and cook a nice homemade meal (spend more time), or decide to go out to eat (spend more money). Yes, when you go out to eat, you also spend time, but in that case, time is a sunk cost, because in either option you will need to devote time if you wish to eat. The importance of money is evident and I believe that I don’t have to go too much in depth here.

Refer to CIA’s Economy/Budget data for analysis of South Korea and other comparable countries.

South Korea
revenues: $267.9 billion
expenditures: $242 billion (2011 est.)
Net: $25.9 billion

United States
revenues: $2.264 trillion
expenditures: $3.604 trillion
note: for the US, revenues exclude social contributions of approximately $1.0 trillion; expenditures exclude social benefits of approximately $2.3 trillion (2011 est.)
Net: -$1.3 trillion

China
revenues: $1.555 trillion
expenditures: $1.681 trillion (2011 est.)
Net: -$0.126 trillion

Switzerland
revenues: $222 billion
expenditures: $216.8 billion
note: includes federal, cantonal, and municipal accounts (2011 est.)
Net: $5.2 billion

I highly recommend that you compare other countries for your own research. $25.9 billion dollars doesn’t seem like a lot of money, but compared to other countries, that is a whole lot more than being net negative, such as in US’s $1.3 trillion dollar deficit. Do I have to remind you of the debt ceiling scenarios we’ve experienced in the past? I hope not. All I’m saying is that South Korea has a lot of capital to utilize.

Technology
In this technological age, technology is king. Whether people are talking about the new type of smartphone, HDTV, tablet, app, or website, everyone realizes the importance of technology in our lives. The most advanced country will have the edge. South Korea excels in this area and is #1 with 95% of households utilizing broadband connections (2009).

I actually visited South Korea in 2005 and a friend of mine showed me his 5MB camera phone. It truly looked like a sleek compact camera, and the phone’s picture quality was amazing. In the US, the best phone was a 1MB flip phone. In Korea, people also used their phones as library and credit cards, and everyone wired money to each other by providing their account numbers. You would be considered strange if you did not use the wire option in Korea. Due note, unauthorized transactions concern is not a major issue in Korea. Also, in Korea there were HDTV’s and displays literally everywhere, as you would now see at Times Square. Once again, that was 7 years ago. Would it be fair to say that U.S. is 7 years behind South Korea in technology?

Here is an interesting fact: Apple is one of Samsung's largest customers, and Samsung is one of Apple's biggest suppliers. What if Samsung decided to not do business with Apple? Who has the upper hand?

Education
I’m sure you’ve heard of the generalizations about Asians being smart, good in math, and doing well in school, and so on, but let’s examine the validity for Koreans. “In South Korea, 93% of all students graduate from high school on time. But in the United States, almost one-quarter of all students — more than 1.2 million individuals each year — fail to graduate. As a percentage of the economy, South Korean families spend three times as much as Americans on education — except for college, where Americans spend fractionally more. What distinguishes South Korea is the $200 billion parents spend on private educational institutes, says Ryu Ji-Seong of the Samsung Economic Research Institute (2008).” President Barack Obama touted hardworking South Korean schools as a role model for our education system. "Our children spend over a month less in school than children in South Korea,” he told the U.S. Hispanic Chamber of Commerce. "That is no way to prepare them for a 21st-century economy.” “South Koreans attend school 220 days per year, almost two months more than the 180 days of Americans students.”

The actual number of school days is important, but even more so is that fact that Koreans have a very concentrated focus on education by investing a great deal of their time and money.

For humor: I’ve met a client that said, “I don’t want to work with him because he’s Asian and he’ll out smart me”.

Brand/Culture
Have you ever heard of these companies: Samsung, LG, Hyundai, Kia, Forever 21, Kyochon, Bon Chon, Pinkberry, and Red Mango? Of course you have. What do they have in common? They are all Korean brands.

The uniqueness of brand image is portrayed through media and personal experience. Companies such as Hyundai and Kia have sponsored numerous spectacular events such as the World Cup, Australian Open, Super Bowl, NBA, etc. and they still do. Recently, Hyundai Equus won the 2011 J.D. Power U.S. Automotive Performance, Execution and Layout (APEAL) Award and easily beat out the flagship Mercedes S Class. In fashion, Korea became the World Design Capital in 2010. Also, Korean food is becoming extremely popular including traditional food, bulgogi, kalbi, kimchi, bibimbop, wings, yogurts, and Korean tacos and burritos.

Even in media, Koreans have a strong presence. For example, recently a Korean pop group called the Girls Generation debuted their new American album at David Letterman’s show in 2012 and received much fan support not only from Koreans, but also from numerous individuals of various ethnicities.

The factors are there for South Korea to become the next Superpower in 2012. Capital, brand, and culture. Money is power. Technology is the future. Education is your foundation. Brand is your reputation. Culture is your background. South Korea will become the next Superpower in 2012.

© 2012 Daniel K. Lee