The lockdown in 2020 led many of us urban Indians to explore over-the-top (OTT) platforms. Netflix and Amazon Prime entered our lives with content that was alien to most of us. I watched the Academy Award-winner Parasite a few months ago, and marvelled at the storyline and direction. My daughter and her friends were hooked to K-Dramas, especially one that depicted an implausible romance between a South Korean chaebol heiress and a North Korean army officer. One of them informed me that she crushed on a K-pop group and was a Stan. As I planned to google the meaning of that, one of my students sent me an article about a K-pop group, BTS, which has contributed to the South Korean economy to such an extent that its economic impact on South Korea is now called the ‘BTS Effect’. It was estimated that BTS in 2018 contributed 4 million won of its 1,898.2 trillion won gross domestic product (GDP), while the entire cultural content industry accounted for 6.3% of it.
The lockdown in 2020 led many of us urban Indians to explore over-the-top (OTT) platforms. Netflix and Amazon Prime entered our lives with content that was alien to most of us. I watched the Academy Award-winner Parasite a few months ago, and marvelled at the storyline and direction. My daughter and her friends were hooked to K-Dramas, especially one that depicted an implausible romance between a South Korean chaebol heiress and a North Korean army officer. One of them informed me that she crushed on a K-pop group and was a Stan. As I planned to google the meaning of that, one of my students sent me an article about a K-pop group, BTS, which has contributed to the South Korean economy to such an extent that its economic impact on South Korea is now called the ‘BTS Effect’. It was estimated that BTS in 2018 contributed 4 million won of its 1,898.2 trillion won gross domestic product (GDP), while the entire cultural content industry accounted for 6.3% of it.
A final news item that caught my eye was one about BTS having swept the Billboard Awards 2021. The group had been awarded the ‘Best Selling Song’ for Dynamite—their first English language song. A Korean tsunami seemed to be engulfing me!
Intrigued, I read up some more. Turns out the wave of South Korean movies, dramas, and music that the world is now used to, is far from serendipitous. ‘Hallyu’ was a term that the Chinese used in 2001 (pejoratively at first) to refer to the growing global popularity of South Korea’s creative economy, especially its entertainment industry, including K-pop and other forms of music, TV shows, dramas and movies.
I analysed the Korean government’s stance as discernible from various presidential speeches, policies and other sources, to see how the interpretation of Hallyu and cultural exports has undergone a sea-change over the period 2001 to 2020-21. The idea of using cultural exports as a means of gaining economic power dates to 1994, when the Presidential Advisory Board on Science and Technology submitted a report to then president Kim Young-sam. The report pointed out that the sale of 1.5 million ‘pride of Korea’ Hyundai cars abroad would fetch as much revenue as the Hollywood blockbuster Jurassic Park. A manufacturing exports-led model of development gave way to a strategy of cultural exports, especially after the Asian Financial Crisis of 1997.
The success of this economic policy aimed at boosting cultural exports was not a happy coincidence. It involved the coming together of multiple stakeholders, including the government, chaebol (large family-controlled conglomerates), small and medium enterprises and entrepreneurial firms, state-funded research agencies, and the youth and people of Korea, to create a creative economy. It was a unique private-public mission. While the government supported the spread of Hallyu’s influence with both financial and non-financial measures, private talent companies and recording agencies ‘manufactured’ K-pop. The policy was among those that helped propel the country into the league of high-income nations in a very short span of time, from a GDP per capita of $6,610 in 1990 to $31,846 in 2019.
However, this still doesn’t solve the puzzle of how a genre of music in an alien language, with singers who, with their soft made-up looks, challenged the Western concept of masculinity, became such a huge hit. The answer lies in what Joseph S. Nye called a ‘soft power’ strategy (hbs.me/3xciy4c). South Korea has used its cultural exports not only as a means of ensuring economic success, but also to increase the nation’s appeal to a global audience. While K-pop idols like BTS, Blackpink, etc, have made Korean food, fashion, language and culture desirable, the government has been encouraging a fresh wave of Hallyu by focusing on Korean language education, promoting cultural exchanges, and providing information on overseas markets and support for translation and online marketing. Fans of K-pop, called Stans, or those of BTS, called the A.R.M.Y., too have contributed to K-pop’s appeal. These fans are assiduously cultivated by these idol groups themselves, who interact with them via social media, dedicate their music to them, and build bonds of intimacy and trust. While the BTS and the K-pop phenomenon is far more complex, with both positives and negatives, Korea’s cultural industry presents an alternative model of gaining soft power, and thereby achieving development.
How does India compare with South Korea? A perusal of India’s balance of payments (bit.ly/2REnxvd) reveals that India has been continually running a deficit in its ‘Personal, Cultural and Recreational service’ exports, with the gap in 2019-20 being a negative $924 million. Moreover, such exports were a minuscule 0.34% of India’s total exports in 2019-20. Paradoxically, our film industry is the largest in the world.
India can take a leaf out of South Korea’s book to boost its creative economy. The starting point would be to measure such an economy and its potential impact, and then draw multiple stakeholders together to nurture this as an industry of the future.
Tulsi Jayakumar is professor of economics at Bhavan’s SP Jain Institute of Management & Research. These are the author’s personal views.