From carbs to cars: how South Korea’s success shows entrepreneurship is a team game | Books

° Сcheck out the noodles… According to the World Instant Noodle Association (yes, such an organization exists), South Koreans are among the biggest consumers of noodles, going through 79.7 servings per person per year. Considering there are just over 51 million of us, that makes about 4.1 billion servings of instant noodles a year. That’s a lot of noodles.

In the same way that we turn all vegetables into kimchi, we Koreans turn almost every carb-rich grain and tuber into gooksoo – wheat, buckwheat, sweet potato, potato, sweet corn, cassava, acorn, arrowroot, rice and recently even barley. But in terms of shape, Korean noodles mainly come in two varieties – strips or strings.

So imagine my surprise when I discovered, on my first trips to Italy in the late 1980s, that spaghetti and macaroni weren’t the only types of noodles or pasta eaten there. The Italian obsession with pasta shapes is such that in the early 1980s, Voiello, the premium brand of Barilla, the world’s largest pasta maker, commissioned renowned industrial designer Giorgio Giugiaro to come up with the ultimate pasta shape – a shape , which will retain sauce without absorbing too much of it, as well as being decorative or even “architectural”.

Giugiaro literally “designed” a beautiful, futuristic pasta shape composed of a tube combined with wool. Unfortunately, it was a complete failure. The complex shape makes it difficult to cook evenly. Given the Italian passion for pasta al denteunevenly cooked pasta was (almost) a cardinal sin.

Giugiaro clearly hasn’t lost any sleep over this debacle. He is the most successful and influential car designer in the world for the last half century. He has designed more than 100 cars, ranging from reliable classics such as the Volkswagen Golf and Fiat Panda to luxury cars such as the Maserati Ghibli and Lotus Esprit. Unbeknownst to most people, one of the earlier cars designed by this super-designer from the noodle-obsessed nation of Italy was the Pony, a small hatchback car launched in 1975 by the Hyundai Motor Company, then a completely unknown automaker from that other noodle-obsessed nation, South Korea.

The Hyundai Group’s core business was initially construction, but it began to focus on higher productivity industries in the late 1960s. Automobiles was the first of these ventures in a joint venture with Ford to assemble the Cortina car developed by Ford UK using mostly imported parts. In 1973, however, Hyundai announced that it would end its relationship with Ford and produce its own locally designed car, the Pony. In its first full year of production, 1976, HMC produced just over 10,000 Pony cars – 0.5% of the Fords produced that year. When Ecuador imported Hyundai cars in June 1976, the Korean nation rejoiced. The fact that Ecuador bought only five Pony cars was dismissed as a minor detail; what mattered was that foreigners wanted to buy cars from Koreans—a nation of people then known for making wigs, sewing clothes, stuffed toys—namely, things that required cheap labor.

Despite this inauspicious beginning, Hyundai grew at an incredible pace in the following years. In 1986, it made a grand entry into the American market with its Excel model (an improved version of the Pony), which was named one of the 10 most remarkable products of the year by the American business magazine Condition. In 2009, Hyundai produced more cars than Ford.

How was that possible? When people hear about this kind of incredible corporate success, they immediately think of the visionary entrepreneur behind it—Bill Gates, Elon Musk, and the like.

Ha-Joon Chang photographed in Borough Market, London.
Ha-Joon Chang photographed in Borough Market, London. Photo: Antonio Olmos/The Observer

And indeed, behind Hyundai’s success were two, not just one, visionary entrepreneurs – Chung Joo Jungthe founder of the Hyundai group, and his younger brother, Chung Se Jung, who ran HMC between 1967 and 1996 and who commissioned Guigiaro to design the Pony. As important as these corporate leaders were, when you take a closer look, Hyundai’s success story is not solely—or even primarily—due to the individual brilliance of heroic entrepreneurs. First, there were production line workers, engineers, researchers, and professional managers who worked long hours mastering imported advanced technology.

And then there was the government. The Korean government created room for Hyundai and other automakers to “grow up” by banning imports of all cars until 1988 and imports of Japanese cars until 1998. This of course meant that Korean consumers had to put up with inferior domestic cars in for decades, but without this protection, Korean car manufacturers could not survive and develop. By the early 1990s, the Korean government made sure that Hyundai and other firms in strategic high-tech industries, especially export-oriented ones, had access to heavily subsidized credit. This was achieved through strict banking regulations that mandated priority lending to productive enterprises (over residential mortgage loans or consumer loans) and government ownership of the banking sector. Using its regulatory and financial power, the Korean government also exerts overt and covert pressure on Hyundai and other companies (foreign as well as domestic) to increase the “local content” of their products so that the local auto parts industry can grow.

But, you might ask, isn’t Hyundai’s story an exception in the world of heroic entrepreneurs? The answer is that it is not.

Even the US – a country that is so proud of its “free enterprise” system – is not really an exception to the collective nature of modern entrepreneurship. This is the country that invented the theory of “young industry protection” and erected a high wall of protectionism to create space for its young companies to grow, protected by superior foreign, especially British, manufacturers in the 19th and early 20th century. th century More importantly, during the post-World War II period, the US government critically assisted its corporations by developing foundational technologies through public funding. Through the National Institutes of Health, the US government conducts and funds pharmaceutical and bioengineering research. The computer, the semiconductor, the Internet, the GPS system, the touch screen, and many other foundational technologies of the information age were first developed through US military “defense research” programs. Without these technologies, there would be no IBM, Intel, Apple and Silicon Valley.

As the intertwined histories of the two noodle-obsessed nations of Korea and Italy demonstrate, in the modern economy entrepreneurship is a collective endeavor.

  • This is an edited extract from Edible Economics: A Hungry Economist Explains the World by Ha-Joon Chang, published by Allen Lane (£20). In support of guard and Observer order your copy at There may be a delivery charge