Passage 2 Korea, once known as the “Hermit Kingdom” , is plainly on the move. As with “Japan, Inc.” before it, the new label “Korea, Inc.” may be no more than a trendy buzzword. But South Korea aims to forge just such a national economic machine, using the might of its established giants backed by centralized planners who can mobilize the country’s banks and industrial infrastructure. The heady dreams of actually rivaling Japan may never come within reach; Korea’s economy, while large by Asian standards, is barely one-fifteenth the size of its island neighbor. And it faces a gantlet of other obstacles, ranging from an unwieldy bureaucracy and a volatile political climate to a chronic shortage of investment capital and heavy commitments to military spending. Still, the comparisons with Japan, Inc. are more than empty flattery; in fact, they signal Korea’s gathering clout.
What are the disadvantages of Korea’s economy when compared with Japan’s