words by Paolo Mercado l artwork by Edward Joson
The Creative Economy Shift of Japan and South Korea
Generations of Filipino Gen X’ers Millennials and Gen Z’ers grew up with Japanese anime such as Voltes V, Mazinger Z, Candy Candy, Dragonball Z, Sailor Moon, Pokemon, Doraemon, Naruto and One Piece. Beyond anime and manga, Japanese cultural influence can also be seen in video games, fashion, music and cuisine where taste for Japanese food has become mainstream. Sushi, tempura, ramen, katsu, okonomiyaki, yakiniku, and teppanyaki have all become familiar and popular dining fare for Filipinos. Our taste for Japanese culture has led to a significant increase in tourism form the Philippines to Japan.
This Japanese “cultural invasion” is not unique to the Philippines. Japanese culture has spread throughout most of South East Asia, the US, Latin America, Europe and even parts of Africa. It can be argued that Japanese cultural “soft power” is achieving much more in terms of geographic spread and influence than the “hard powers” of Japanese military occupations in the 1940s or Japanese industrial expansion in the 1980s.
In a similar way, South Korea has also made a significant impact in world pop culture. Korean telenovelas dominate soap opera content in the Philippines, China, Taiwan, and the rest of South East Asia. While Japan owns video game consoles with Sony and Nintendo, the South Koreans have made their mark in the world of Massive Multiplayer Online Role-Play Games (MMORPG) from the early hits such as Ragnarok and the Lineage series to current popular games such as Blade and Soul. The global success of K-Pop is nothing short of astounding. PSY’s record- breaking views on YouTube for both “Gangnam Style” and “Gentlemen” is testament to the global appeal of kitschy but cool Korean culture.
For both Japan and South Korea, the spread of their cultural “soft power” did not happen by chance or luck. It happened by design. Here is a quick glimpse at how they did it.
The Cool Japan Strategy
As the Japanese economy contracted in the 1990s, it became increasingly clear that Japan needed another way to stimulate growth.
“Under the very serious conditions of the Japanese economy such as intensifying competition with emerging countries, diminishing domestic demand, deteriorating growth potential, and battered local economies, we can no longer rely on conventional models of Japanese industry and economy, consisting of mass publication, mass consumption and cost competition. Japan will never survive without creating new sources of revenues,” stated the Japan Ministry of Economy, Trade and Industry
The term “Gross National Cool” of Japan was first coined in 2002 by Foreign Policy publication writer, Douglas McCray, to describe the growing importance of Japanese cultural exports to the Japanese economy. The private sector and some government officials started to use the term “Cool Japan” as a collective term for this trend. By 2011, Japan’s Ministry of Economy, Trade & Industry (the equivalent of our DTI) formalized the “Cool Japan Strategy” in a set of policies that would actively build the ecosystem of the creative and cultural sectors.
“Under such circumstances, we should promote the Cool Japan strategy to transform the appeal of Japanese culture and lifestyle (food, fashion, lifestyle, and various contents such as animation, dramas, games, films and music; and tourism) into added value (= create a mechanism to convert culture into industry) and create new growth industries, thereby preparing employment and opportunities for SMES and young people.” Cool Japan Strategy, METI Sept 2012
The Cool Japan Strategy not only prioritizes the country’s creative and cultural sectors as drivers of the national economy, it sets an ambitions target: that by 2020, Cool Japan revenue will achieve between 9% to 12% share of the estimated USD 8.5 Trillion Global Creative and Cultural Industries revenue.
In some ways, Cool Japan is similar to DTI’s prioritization and development of the Philippine BPO Industry. But instead of outsourced services, which is fundamentally based on being a low cost service resource, Japan prioritizes culture and creativity which banks on higher value Intellectual Property drivers such as copyrights, trademarks and patents.
Hallyu: The Korean Wave
Similar to Japan’s experience, the 1997 Asian Financial crisis led to government’s prioritization of creative and cultural industries to help the country emerge from the crisis. According to an article fromThe Economist (Soap, Sparkle & Pop: Korea’s Soft Power, 9 August 2014), Kim Dae Jong responded to the crisis by mandating the prioritization of IT innovation and Content (film, TV, pop music, games). The low cost copycat manufacturing strategy of the chaebols (South Korea’s industrial conglomerates) was obsolete. South Korea needed to pivot from industrial copying to innovation and creation.
From this prioritization, Samsung emerged as a leading innovator in home, entertainment, mobile and appliances. Seoul Broadcasting System became a major exporter of Korean Telenovels, and K-Pop broke into the world stage, driving entertainment trends and breaking YouTube records. Last but not least, gaming companies like NC Soft collectively contributes around 12 times the revenue of K-pop to South Korea’s economy.
While Japan has had a few years head start in exporting its culture and creative content, South Korea has found a huge audience base hungry for their content: China, for clear historical reasons, retains a strong cultural and political animosity to Japanese culture. Put simply, Cool Japan isn’t cool in China, but Korea is. Korean Telenovelas, K-Pop, Fashion, Tech and even Korean cosmetic surgery have all found a massive and popular consumer base in the Chinese. Beyond consumption, Chinese economic planners are carefully studying the Korean hallyu experience to pivot their own brand proposition from “Made in China” to “Created in China”. It may not be long before the next wave of Cultural Cool will come from China.
What We Can Learn from Japan & Korea
Creative Economy experts often cite Japan and Korea as lighthouse models for countries pivoting from Industrial to Creative economies. In both these cases, one cannot ignore the importance of both the Public and Private sector stakeholders role in defining a Creative Economy agenda with clearly defined revenue objectives, growth strategies, sector priorities, and roadmaps for building external markets for creative and cultural exports. Today the Japanese and Korean creative economy strategies have fueled billion dollar industries, outpacing the growth of their international manufacturing economies.
The Philippines today does not have a Creative Economy agenda. There is no government institution explicitly responsible for the growing of our cultural and creative industries either for domestic or export value creation. The DTI’s Comprehensive National Industrial Strategy makes no mention of the role of creativity in our economic development. It is simply not a DTI priority. The National Commission for Culture and The Arts is tasked with preserving our cultural heritage, however it has no mandate to transform arts and culture into an economic driver.
While DEPED is including arts and design tracks in the new K to 12 program, and TESDA has included Animation, Gaming and Graphic Design in their certificate programs, these commendable efforts are not matched with a national agenda to develop the industries that will absorb these talents.
For the Private Sector, while we have many creative industry associations for advertising, film, interior design, visual arts, performing arts, broadcasting, digital marketing, animation, etc., most if not all of these associations focus mainly on sector specific self regulation, member protection and domestic market development. Only a select few look at developing Filipino creativity for international markets.
I believe there is a great opportunity for the Philippines to be a regionally competitive creative economy, contributing the same if not greater value to our GDP as the BPO Service Sector. But we cannot just hope for this to happen. There is urgent need for the different public and private sector stakeholders to come together to create a Creative Economy Master Plan. While we are a country of tremendous creative talent, I fear our window of opportunity for becoming a regional creative economy powerhouse is fast closing as Japan, Korea, as well as China, India, Singapore, and our ASEAN neighbors accelerate their own creative economy agendas.
ABOUT THE AUTHOR: Paolo Mercado is a business professional convinced in the value generating power of creativity for private businesses as well as local and national governments. This column explores and investigates how others have successfully turned creativity into economic value for themselves and their community. He is a marketing professional, raised in a family of advertisers and writers, with a passion for teaching and an obsession for the performing arts.
