[2025 Financial Forum] Lee Jeongdong: "Finance Is the Shadow of Industry... Without It, Korea Cannot Escape Low Growth"

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"Finance is the shadow of industry. However, in Korea, finance and industry are operating separately."

[2025 Financial Forum] Lee Jeongdong: "Finance Is the Shadow of Industry... Without It, Korea Cannot Escape Low Growth"

Professor Lee Jeongdong of Seoul National University College of Engineering attended the "2025 Asian Financial Forum" held at the Western Chosun Hotel in Jung-gu, Seoul on the 21st and gave a lecture on the topic of "The Role of Technology-Advanced Countries and Finance." 2025.5.21 Photo by Jo Yongjun

Professor Lee Jeongdong of Seoul National University stated this at the "2025 Asian Financial Forum" held at the Westin Chosun Seoul in Jung-gu, Seoul on May 21, 2025. He said, "The only way for Korea to escape from near-zero growth is for us to nurture the seeds of innovation ourselves."

He diagnosed that Korea is currently at its peak and now needs to worry about a potential decline. He pointed out that the reason the growth rate has stagnated at around 0% is because the fundamentals of industry have weakened.

He criticized that Korean companies are struggling in the "scale-up" process of turning ideas into innovation. While advanced countries and China create cutting-edge products and services such as ChatGPT and DeepSeek, Korean companies excel at benchmarking and execution but lack the ability to be the first to propose such innovations.

He identified the lack of "concept design" capabilities?redefining the nature of problems and finding creative solutions?as the reason. Concept design is born through a scale-up process that emphasizes know-why over know-how and values enduring challenging trial and error over simply minimizing mistakes.

As part of efforts to create original concept designs, he introduced the "Grand Quest" project, which aims for Korea to lead the world. These are questions that have a low probability of being realized within ten years but could change the world if achieved. For example, "Is it possible to develop a technology that induces aging cells to divide, thereby restoring them to a youthful state instead of aging?" Last year and this year, he presented ten Grand Quests each.

Professor Lee urged that finance must support companies in order to enhance their concept design capabilities and realize the Grand Quests.

He particularly emphasized that the financial system must provide patient capital to help companies endure the "valley of death" period, during which challenging attempts accumulate trial and error as they scale up. He listed four types of patient capital: internal reserves within companies, venture capital (VC), project-based loans, and national fiscal resources.

Among these, he explained that the ability of banks to implement innovative finance is especially important. He argued that with the current financial system, which generates massive profits through interest margins, neither Korea's Grand Quests nor scale-ups can be expected. In addition, he stressed the need to further expand national R&D investments and enhance policy stability through fiscal resources.

Professor Lee pointed out, "The Korean financial market has a small capital ecosystem, and even the limited venture investment tends to flow more toward relatively mature companies rather than early-stage startups as time goes by." He added, "This structure prevents early-stage startups from asking the challenging questions necessary for innovative scale-up."

He concluded that in order for Korea to escape from near-zero growth, it must revitalize its companies and industries. He said, "For Korea to lead innovation and escape the trap of low growth, the role of finance in supporting companies is crucial."