KENNETH KIM
Professor, Hanyang University ERICA
Creative industries are gaining increasing recognition by policymakers and the private sector as a driver of growth and a source of employment. According to UNESCO (2021), creative industries generate roughly $4.2 billion in revenue, with an estimated multiplier effect of 2.5x through direct and induced impacts. However, it is widely recognized that the sector has not yet reached its full potential in many developing nations. To support creative industries sector development, IFC is mobilizing financing for the private sector and advisory and policy dialogue with governments.
During the 2023 Annual Meetings, IFC hosted an engaging panel discussion titled “Unleashing the Potential of the Creative Industries”. Following the live event, Kenneth Kim, Professor at Hanyang University ERICA, spoke with IFC to provide additional insight and continue building the pool of knowledge within the space.
Can you share some insights on the development of Korea’s creative industries space, which is thriving and has experienced tremendous growth over the past several decades?
The term Hallyu is a word composed of two words, with han meaning Korea and llyu meaning the wave. The Korean Wave is actually referring to the meteoric rise of pop culture from Korea that has taken the world by storm. You may recognize Korean productions—like the Oscar-winning film Parasite and Squid Game, which is one of the most popular series on Netflix—and groups like BTS topping the Billboard charts over and over again.
Hallyu first started in Asia about 30 years ago, around the 1990s, led by K-Drama. And during the 2000s, K-Pop expanded to Europe, America, and other parts of the world. But this soft power growth was not an overnight sensation—it was the result of series of challenges and events that built over the past few decades.
Looking back, you may know that Korea was divided into two countries after Korean War in 1950. At that time, South Korea was considered as a third-world country. It had a GDP that was 40% lower than that of India. A very weak social and political situation continued through the 1980s, when South Korea focused on growing its economy. During the mid-1990s, when the Asian financial crisis happened, Korea started to invest in IT technology and started recognizing the importance of the creative industries. As a testament to this shift, a presidential meeting highlighted that ticket sales for Jurassic Park outperformed the profit of 1.5 million car exports by Hyundai Motors in 1993. After this meeting, the Korean government mandated the culture and art support law and the film support law. These laws were accompanied by the creation of government bodies to establish industry support.
What has been the impact of the cinema quotas in Korea?
Cinema quotas helped the Korean cinema industry during the 1980s. When the quotas were lifted, Korean cinema found a different way to grow. The screen quota was abolished in 1989 and Korean production decreased from 100 to 120 films in 1990 to only 43 in 1998.
On the other hand, this is when foreign film imports increased—jumping from 25 in 1984 to 405 in 1996.
Fatal Attraction is an interesting example. It was the first film imported to Korea after the quotas were lifted. People against the quota lift ended up releasing snakes at the movie theaters that showed the film. Luckily, the snakes weren’t venomous and nobody got hurt.
But this shows that the quotas had a tremendous impact on the Korean cinema industry. At the same time, the quotas became an opportunity for others who wanted to run the business differently.
Overall, the quotas had a positive impact up to a certain point. Lifting the quotas also had an impact, changing the dynamic of the industry, which ultimately led to more global competitiveness.
What are the success factors behind K-Pop?
K-Pop has been successful both culturally and financially. K-Pop is now viewed all over the world, whether via television or online platforms like YouTube. K-Pop is a major force behind the Korean cultural wave, or Hallyu—thanks to a solid combination of high-quality performers, outstanding visuals, far-reaching promotion, and a diversity of content.
The K-Pop industry is a true success story from the production and distribution stand point. Producers systematically train artists to enter the global market. Delivery is done largely via social media, which has a large reach while also saving time and money. Most consumers are technology savvy and would like to experience different cultures. And content is based in talented idols and stars who have the look and a keen ability to sing and dance. These factors have come together to make K-Pop a global phenomenon.
Can you discuss the economic impact of K-Pop?
The impacts are tremendous. According to Fortune magazine, BTS created $29 billion of value to the Korean economy over the past nine years. Looking closer, BTS adds about $3.6 billion of economic impact annually. As another example, Black Pink went on a world tour in 2023. In Vietnam, 170,000 people visited Hanoi for the concert, creating an economic impact of $25 million for that particular city.
This is further proof that these early investments are yielding huge returns. In fact, The Korean Economic Research Institute estimated the Hallyu has created $33 billion in economic impact in the last five years, from 2017 to 2021.