[Market Pulse] The Lost Paradigm... An Overload of Policies

An Economy Trapped by Five-Year Short-Term Prescriptions
Revitalizing Our Foundation through Imagination, Challenge, and Innovation

Jongrok Yoon, former Vice Minister of the Ministry of Science, ICT and Future Planning

There is an abundance of "prescriptions" in the industrial field, yet there is no sign of a "philosophy of health." Singapore's per capita GDP is on the verge of reaching 110,000 dollars. We live in a world where Google's market capitalization fluctuates at more than twice South Korea's GDP. Every time a new government is inaugurated, tens of thousands of pages of "policy" prescriptions are poured out, but a true "paradigm" shift that fundamentally transforms the structure of our society remains elusive.

Short-term, fragmented policies that act as mere band-aids for immediate pain are repeatedly implemented. As a result, we remain trapped in the past glory of being the "model student" of the hard power era that dominated the industrial economy, now scrambling to catch up in a world led by soft power.

It was not "tools" but "systems" that divided civilizations. Historically, humanity's dramatic advances did not come from simple technological inventions, but when the overall societal paradigm evolved as a whole. The success of the Meiji Restoration was not simply because Japan was first to import Western guns and ships. It was possible because they chose a "grand transformation of the social paradigm"-dismantling the samurai class that had persisted for centuries and introducing Western-style education and judicial systems.

The Saltsjobaden Agreement, which drove the growth of Northern Europe, is another such example. In the 1930s, Sweden faced a national bankruptcy crisis due to severe labor-management conflict, but labor, management, and government reached a grand compromise-not for five or ten years, but for the "next generation." This was not merely a labor policy, but a paradigm shift that established "cooperation and trust" as new social norms.

The essence of the Saemaul Undong, which opened the path to modernization after Korea’s liberation, was not a civil engineering project to improve rooftops. It was a grand shift to the soft power of "diligence, self-help, and cooperation." The problem is that we have stayed in the memory of this success for far too long.

Politics is mired in short-term policies aimed at showing "results during term" within the confines of a five-year single-term presidency. Education still produces "follower-type talents" who can quickly come up with the right answers, rather than nurturing inquisitive minds. Finance is focused on risk aversion instead of risk-taking. Spewing out policies without changing our thinking, practices, and habits is like changing only the engine oil and hoping the car will fly. What we need now is not just a few lines of "AI policy," but a paradigm that flows seamlessly from imagination to challenge to innovation-an all-encompassing evolution of the system itself.

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With each administration, the lifeblood of industry is cut off and the direction of policy is reversed; such governance cannot make us a "first mover" that leads global trends. What is needed is not a policy that determines the fate of a single administration, but the establishment of a paradigm that transcends political factions. The startup policy of the Kim Dae-jung administration, the green growth of the Lee Myung-bak administration, the creative economy of the Park Geun-hye administration, and the "national startup era" of the current government are all layered like segments of bamboo, sharply divided.

Germany was able to transform from "the sick man of Europe" back into its doctor by completing the painful labor reforms of "Agenda 2010." This was possible thanks to political resolve and national patience that maintained the country's direction, even when governments changed.

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?To revitalize the lifeblood of Korean industry, we must foster a culture that regards failure as an asset, finance that invests in value rather than collateral, administration that considers support rather than regulation, and, above all, a social consensus that can sustain all of this not for five years, but for more than a generation.

?We are a people with a proven history of creating something from nothing. Now, the new paradigm that must permeate the AI era is the power of challenge that transforms imagination into innovation-a country strong in soft power. Having crossed the industrial economy's threshold as a middle-income nation through diligence, self-help, and cooperation, it is time for us to redesign the innovation economy paradigm based on imagination, challenge, and innovation.

Jongrok Yoon (Adjunct Professor at KAIST, former Vice Minister of the Ministry of Science, ICT and Future Planning)

This content was produced with the assistance of AI translation services.