[The Editors' Verdict]A Society That Allows Failure vs. A Society That Deprives Failure

Finland's "Day of Failure":
Celebrating Setbacks to Foster Innovation
A Harsh Stigma Against Dropouts
How Korean Society Views Failure
Debt Restructuring for Small Business Owners
A Stepping Stone for a Fresh Start

In Finland, a country renowned for its thriving startup ecosystem, there is an event called the "Day of Failure." Held annually on October 13, it is a national event watched by a quarter of the population. Under the slogan "We failed. Let us celebrate," entrepreneurs, university students, and professors gather to share their experiences of failure and to celebrate the failures of others.

In the 2000s, Finland was known as the home of Nokia, the world's leading mobile phone company. However, after Nokia failed to adapt to the emergence of smartphones and became complacent, the company's downfall led to mass layoffs and unemployment. In response, Finland established the Day of Failure to remind people that behind every success lie numerous failures. The aim was to foster a social atmosphere where people are not afraid to fail for the sake of innovation. Thanks to this entrepreneurial culture, the global mobile game Angry Birds was born after 51 failures, transforming Finland into a "nation of startups."

In Korean society, where failure is not easily tolerated, Finland's Day of Failure may feel unfamiliar. South Korea is strict about failure. There is a prevailing perception that failure is a sign of incompetence or lack of ability. As a result, it is difficult for someone to recover after even a single failure. The KAIST Failure Research Institute refers to this as a "society that takes away failure." In the institute's national survey on perceptions of failure, published in March, 77.2% of respondents said that "Korean society is not tolerant of failure." Six out of ten people agreed that "in Korean society, a single failure leads to being seen as a dropout."

Lee Kwanghyung, president of KAIST, and other authors agree that "it is not that our society does not understand the necessity of failure, but rather that people are deprived of the very opportunity to fail." Most stories of failure are only shared when they are followed by eventual success, while "failures that end in failure" or "failure as part of the process" are rarely known.

The Lee Jaemyung administration has announced plans to establish a "bad bank" to ease the debt burden of small business owners and the self-employed. Through the "Saechulbal Fund," a debt restructuring program for small business owners affected by COVID-19, the government plans to reduce the debts of 100,000 low-income small business owners by up to 90%. In addition, debts of up to 50 million won that have been delinquent for more than seven years for 1.13 million vulnerable individuals will also be written off.

As expected, there are strong criticisms that this could encourage moral hazard, as well as concerns about fairness and equity for those who have repaid their debts in good faith. These are not easy issues to refute. No one disputes that "all borrowed money must be repaid."

However, according to a Financial Supervisory Service survey, 70% of those delinquent for more than 90 days fell into arrears due to involuntary reasons such as unemployment, illness, or business failure. These individuals are not only excluded from financial services, but are also trapped in circumstances that prevent them from leading normal lives, including access to housing, medical care, education, and employment. Experts point out that, especially since the causes of debt are often structural problems that recur in economic crises such as COVID-19, the solution must be addressed collectively by society as a whole.

The problem is that debt restructuring policies, which are repeated with each new administration, have served more as temporary measures to "cover debt with more debt" rather than as stepping stones for vulnerable individuals to rebuild their lives. There is a need for detailed policies that establish a social safety net where people do not become outcasts even if they fail, so that self-employed individuals and small business owners can get back on their feet. Debt relief should become a lifeline extended by the state to those who have failed.