'Build on G20 role to address Korea Discount'

Dominic Barton, chairman of McKinsey & Company

Since the end of the Korean War in 1953, South Korea has created one of the most impressive stories of rebirth in the world by transforming a war-ravaged agrarian economy into a global manufacturing powerhouse.

Over the past 60 years, Korea has seen its ranking rise sharply in the global economic league table, becoming the 13th largest economy in the world. Korean companies also flourished, with Samsung and POSCO emerging as international leaders in the respective manufacturing industries.

Following the global financial crisis, Korean firms are rising even further by capitalizing on the fall of global corporate heavyweights. However, there is something missing more importantly not improving as equally fast. It is the brand of Korea. Korea's brand is still undervalued compared to its economic size.

Against this backdrop, President Lee Myung-bak and his administration are seeking to use the G20 as an opportunity to strengthen its national brand and turn ‘Korea Discount’ into ‘Korea Premium.’

McKinsey & Company Chairman Dominic Barton believes that hosting the G20 would be a great chance to boost its international reputation but the event alone cannot be a magic solution to address the issue, recommending that Korea must come up with a long-term plan beyond the Seoul Summit.

“I think that the Seoul summit will enhance the brand image of Korea. But it will not lead to the disappearance of the “Korea Discount.” One meeting could never accomplish that goal, although the summit will be an important step forward,” Barton said.

“To address the “Korea Discount”, the country needs to build on its G20 role, demonstrating to the world on an ongoing basis its capacity for consistency of behavior, its openness, corporate governance and its willingness to lead on urgent global issues,” he added. “In addition, Korea needs to make the migration from an export-led manufacturer to a country with a world class service industry.”