Korea’s growth potential held back by lack of entrepreneurship: ADB economist

[THE INVESTOR] South Korean university graduates’ lack of drive for starting businesses will hold back the country’s potential growth rate, Asian Development Bank principal economist Park Dong-hyun said on Aug. 31.

Speaking at the Asia Venture Capital Journal’s private equity and venture forum in Seoul, Park said that lack of business drive among students is a major negative factor coming from within the country. 

Regarding external factors that could hold back the country’s potential growth rate, Park cited sluggish recovery of advanced economies and China’s slowdown.

Citing a survey that asked final year students of top-tier universities in Korea, China and Japan about the direction they will take after graduation, Park said that Korean students’ choice bodes ill for the country.

“Lack of entrepreneurship is an internal obstacle. By entrepreneurship, I mean (students) being bold enough to start businesses,” Park said.

He added that the emphasis the Park Geun-hye administration places on creative economy and entrepreneurship is “mostly talk” and that Korea’s family-led conglomerates have “little to do with entrepreneurship.”

“Only about 10 percent of Korean students said that they wanted to start a business upon graduation, 70 percent want to become government bureaucrats, even low level ones. This is very concerning, and bodes ill for the country.”

Park added that less than 5 percent of Japanese students saying that they would start businesses “goes a long way to explain that country’s 20-year slowdown.”

In contrast to Korean and Japanese students, 70 percent of Chinese students graduating from top-tier universities expressed hopes of starting their own business.

By Choi He-suk (cheesuk@heraldcorp.com)