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May 2016

Building a Global Innovation Center

Michael Conforme Ogan Gurel Accelerate Korea Jocelyn Clark

The South Will Rise Again!


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Founders’ Message

The Same, Only Different Ideas. Ideas are everywhere. Everyone has at least three in their back pocket. Some are new. Some are old. Just because an idea is not new or original doesn’t mean it isn’t valuable.

W

ell, here we are making a magazine. “A magazine? How dumb is that?” you say. Okay, don’t panic, it’s actually just an e-magazine. There is a long-held truism in business that the first to market gets the lion’s share of the benefits and market share. This is no longer true, if it ever was. In today’s hyper-competitive marketplace, it isn’t the first to market that wins, it’s the best to market, because the best to market ends up being the last to market. The goal shouldn’t be to get to market first, it should be to get there in such a fashion that no one else wants to follow you.

Speed does matter. If constant iteration is the key to finding better answers then every company should have fast iteration as a core competency. Minimizing the time it takes us to go through the feedback loop, make adjustments from what we learned and get back out there in the marketplace is the one criteria we should be focusing on always. A magazine, yes, a magazine. But only if we think we can do it well, only if we think we have something to add. We do believe we have something to add: you. Our great members drive the KBLA and this magazine is all about the KBLA community.

Overvaluing ideas often leads to undervaluing execution.

Recent history is littered with examples of companies who got to market first, with an excellent idea in tow, only to fail and be replaced by a late-moving copycat. A number of social media companies (Friendster, MySpace, Cyworld, Orkut, among others) preceeded Facebook, only to fail and get left behind, once Facebook, largely by accident, stumbled on the secret formula to finally make social media stick. So, the idea of social media was clearly a popular idea, with many competitors pursuing it, but the key to actually winning in the market was better execution of the idea.

However, as the Facebook story illustrates, better execution can’t always be forced. The difficulty of foreseeing what will work and what won’t is the main obstacle to delivering what customers actually want. Companies can’t “Just do it.” and expect that it will work. Rather, they must just do it and expect to have to just do it again and again until the mix of benefits customers really want is found. Success in the marketplace can’t be forced, because companies don’t choose what works, customers do. All we as business leaders can do is continue to throw things at the wall until something sticks. Having the organizational fortitude to head off in new directions is not always easy, but it is always critical. We have to expect that failure is going to be a regular and constant companion on our journey. Mere mortals can’t guess what will work and what won’t work ahead of time. We’re not all Elon Musk.

This is the beginning, the first issue. We hope you enjoy it. It won’t be the last issue, however! Expect us again next month; the same, only different. We’ll be here. And we’ll be iterating and iterating and iterating.

Rodney J. Johnson President, Erudite Risk Co-Founder, KBLA

Steve McKinney President, McKinney Consulting Co-Founder, KBLA


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ToC

In This Month’s Issue Founders’ Message

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The Same, Only Different

Ideas. Ideas are everywhere. But ideas are only a small part of the equation. Don’t ignore execution.

Upcoming KBLA Events

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Seminar: Managing Legal Risk Privacy and Security as Tradeoffs Taking Steps Toward Green Energy The South Has Risen Again!

Recent KBLA Events

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Innovation, Trade Secrets

Korea is innovative and global. Trade secret theft is a problem for those who hire as well as though who lose employees.

KBLA Community

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Talking with Michael Conforme

Michael’s latest venture is taking him, and us, in a totally new direction.

KBLA Community

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Ogan Gurel is a man on the move

Dr. Gurel has spent a significant portion of his life studying the waves that make up life, now it is time to take that knowledge to market.

KBLA Community Accelerate Korea

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While helping Korean startups to meet the demands of a global market, this team is busy finding its own personal and professional growth.


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KBLA Community

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Jocelyn Clark: Scholar Musician

How do we make big strategic decisions, requiring tough tradeoffs, when the data is unclear?

Deal Flow

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Legal Analysis

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Economics

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Risk Management

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About The KBLA

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It’s what you always wished existed.

You don’t need many reasons to join the KBLA. You only need four.


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Upcoming KBLA Events

Managing Legal Risk for Leaders

Privacy and Security as Tradeoffs

KBLA Professional Series Seminar

KBLA What’s Next Lunch

Board members, C-suite executives, investors, in-house counsel, and all business leaders need this training!

Legal and Operational Risk Management

Wednesday, May 11, 2016 Grand Hyatt Seoul 8:30 AM Registration 9:00 AM - 4:30 PM Seminar Public link: http://kbla.info/index.php/legal-risk

Recent events in the US have highlighted differences between government and private industry over encryption.

Security v. Privacy

Friday, May 20, 2016 Grand Hyatt Seoul 11:30 AM Registration 12:00 PM - 2:00 PM Presentation/Discussion Public link: http://kbla.info/index.php/security-privacy

Visit www.kbla.info to learn more about each of these events and more. Visit us on Facebook at https://www.facebook.com/KoreaBusinessLeadersAlliance/


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The Future is Now And It Is Most Definitely Green.

The South Has Risen Again!

Green technology is more than just solar and wind power. Pavegen shows us how creative green technology can be.

First class meal in an excellent hotel, incredible view, incredible dinner company and conversation.

KBLA Venture Forum Breakfast

KBLA South

Pavegen: New Business Models in the Energy Sector Friday, May 27, 2016 Grand Hyatt Seoul, Namsan V 7:30 AM Registration 8:00 AM - 9:30 AM Presentation/Discussion Public link: http://kbla.info/index.php/pavegen

KBLA South Dinner and Cruise Friday, June 10, 2016 Park Hyatt Busan 9:00 AM - 4:30 PM Seminar Public link: http://kbla.info/index.php/kbla-southdinner


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Recent KBLA Events

Korea is Innovative and Global Kimberly-Clark chose to locate its Global Innovation Center in Korea for a reason: it was the best place to put it. KBLA Innovation Series April 28, 2016 Grand Hyatt Seoul Building an innovation center is never an easy task. By definition, innovation involves some disruption and organizations seeking to innovate must walk a tightrope between doing what is working today and building for a future that is potentially very different from today. According to Karyn and Eric Schroeder, a unique couple, sent by Kimberly-Clark to Korea to build a critical piece of the company’s global innovation puzzle, Korea represented an opportunity to maximize the benefits of innovation while minimizing the organizational resistance. This was true due to the very strong position of Kimberly-Clark’s local presence in Korea: Yuhan Kimberly. Yuhan Kimberly occupies a unique position of strength in the Korean marketplace, allowing the new Global Innovation Center in Korea to claim legitimacy among internal regional customers around Asia, and eventually around the world much more rapidly than it would have had it been placed in another location in Asia. Kimberly-Clark’s Global Innovation Center in Korea got a further boost by utilizing Korea’s highly trained and unexpectedly diverse workforce. The ease of finding innovators with work and/or study experience outside of Korea was a welcome bonus of establishing the site in Korea. Today, Kimberly-Clark’s Global Innovation Center in Korea is giving back to the global company to a degree the founders could not have hoped for in the beginning. The local center participates in innovative projects that originate around the world. The local center is building product solutions that are to be sold and marketed in markets far from Korea.


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Recent KBLA Events

Employee Movement Risk

Employees leaving companies and hiring new employees represents a significant risk of trade secret loss.

KBLA Breakfast Business School April 28, 2016 Grand Hyatt Seoul Mr. Honyul Ryoo, Partner, Lee & Ko, presented on a Protection of Trade Secrets related topic: Understanding the Legal Risks of Employee Movement. This topic was a significant addition to the KBLA Breakfast Business School lineup because this kind of risk presents potential problems for all companies. There are essentially two types of risk companies face when dealing with employee movement. The first one is an employee leaving a company. The second one is an employee coming to a company. When employees leave a company they may take with them, intentionally or inadvertently, trade secrets of a variety of types, from customer lists to research and development data to strategic plans. All employees, regardless of position, have access to information companies would rather not divulge publicly. Many of these personnel do not know what is and what is not worth protecting, or what is and what is not a trade secret. Companies, therefore, must take the lead in ensuring that personnel are properly briefed on trade secret protection, preferably during onboarding, and properly trained on the true value of information in an organization. Thereafter, a variety of measures may be

taken to ensure trade secret protection is kept in mind and taken seriously by personnel. These measures may include periodic education, posted notices, careful management of access and usage of key information resources, and non-disclosure and noncompete agreements. For companies hiring new personnel, the risks are exactly reversed. Companies must worry that new personnel are going to bring with them stolen information and data and utilize that data in their new roles, thereby exposing the organization to legal risk. Companies can mitigate this risk by having a robust interview process that specifically addresses the issues of trade secrets. This should be combined with employee background checks, to the extent appropriate for each role. Lastly, companies should be on the lookout for anomalies that indicate something is not as it should be, such as the existence of information in processes that should be impossible or very difficult to obtain.


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KBLA Community

Michael Conforme

There’s never a bad day for a good start. EveryDay Diabetes Magazine supports the diabetes community by providing life solutions for people with diabetes and their families.

Tell us about your Korea experience so far? When did you come? Why did you come? How long do you plan to stay?

accounting for 3.2 percent of the combined health-insurance spending.

I’ve spent most of my adult life living and working in Asia. Starting with serving in the military in the 1980s, working at two Korean Chaebols and one Fortune 200 company in the 1990s and as an entrepreneur, angel investor and mentor beginning in the 2000s.

Of those with diabetes, based on gender, 55 percent are male. South Koreans become most vulnerable to diabetes in their 40s, the study found, while under 30-years-old accounted for 4.3 percent of the patients, the share jumped to 11.5 percent for 40-somethings in the most recent data. The NHIS said that people in their 50s, 60s and 70s made up 25.7 percent, 27.9 percent and 22.8 percent of those with diabetes respectively.

As far as how long I’m planning to stay in Korea. I just can’t say. Based on the 4 business lifestyle models, I prefer the “Passion Lifestyle” model which helps me align my business with my lifestyle goals and values so I’m not particularly tied down to one place. Therefore, to answer your question I’ll just quote Pumbaa from the Lion King,“Home is where your rump rests.”

Tell us about your new venture. Is this a life calling, something you’ve been wanting to do for a long time or a relatively new idea? Many people are affected by diabetes. In fact, as stunning as it sounds, the number of adults estimated to be living with diabetes has nearly quadrupled in the past 35 years according to a new report from the World Health Organization (WHO). That’s an estimated 8.5 percent of the world’s adult population. In Korea, the appetite for fast food and other unhealthy foods is showing its dark side as the number of Koreans suffering from diabetes shot up 24.6 percent in 2015 from five years earlier. The study by the National Health Insurance Service (NHIS) found that 2.52 million Koreans now have diabetes –this compared with 2.02 million posted in 2010. The problem is becoming an additional burden on public health care expenditures in a country with one of the most affordable healthcare systems. According to the NHIS, expenditures rose 33.3 percent to US$1.5 billion,

By launching our magazine I don’t think it’s a ‘life calling’ instead it’s about being an advocate to promote diabetes awareness and help prevent this chronic illness from spreading to more Koreans as I have seen first hand the damage diabetes inflicts on individuals as well as how it impacts their families.

You are also the Director of KBLA South. Why take the KBLA to Busan? Busan is an untapped market for KBLA and similar associations. It is an international business center and although some industries are struggling now due to current economic conditions, it is still renowned for its machinery, steel, ship building and marine industries, fashion, tourism and trade fairs. Also, a little known fact is Busan is the fifth busiest seaport in the world, with transportation and shipping among the most high profile aspects of the local economy. Since 1978, Busan has opened three container ports and has one of the world’s largest ports handling up to 13.2 million TEU shipping containers per year. Busan is the home of the headquarters of Renault Samsung Motors, Hanjin Heavy Industries, Busan Bank, Air Busan, Hi Investment & Securities, Woori Aviva Life Insurance, Korea Technology Finance Corporation, Korea Asset Management


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Corporation, Korea Housing-Finance Corporation, Korea Securities Depository, Korea Housing Guarantee Company, Korea Southern Power Company, and BNK Financial Group plus numerous foreign invested companies. This means there is an opportunity (Blue Ocean) for the KBLA to serve leaders in Busan by offering the same services that KBLA provides its members in Seoul such as bringing peer leaders together, helping them build relationships, exposing them to new ideas and best practices, giving them opportunities to interact, publish, demonstrate expertise, and just spend time getting to know one another.

What kinds of events and activities are right for Busan and the surrounding areas? Regarding events and activities related to business it is hard to say at the moment as we are just kicking off KBLA South but I am excited to explore, learn and engage with local leaders to flesh out what kind of events and activities they would like to get involved with. When it comes to spending time getting to know one another, Busan is known for its beaches, hot springs and spas, nature reserves, leisure sports (yachting, golfing, and jet skiing) and events such as the city’s renowned international film festival held each fall so there are many to choose from. For me personally, Busan is a good destination for those seeking a more laid back atmosphere than Seoul. Some of my favorite places to relax at are Yonggungsa Temple, 40 Steps (40 Gyedan), Busan Racecourse Park, and Taejongdae Resort.

As an entrepreneur, what do you think of Korea as a place for starting and growing new companies? Opportunities to start and grow new companies in Korea exist across the spectrum and to varying degrees many entrepreneurs that have started businesses are already successful and continue growing. With the recent creation of business incubators and other facilities to support startups I think Korea should be at the top of the list as a place to set up a business. A word of caution though! Before setting up a business in Korea, I think it’s vital to understand the differences between Western practice and Korean business etiquette. For example, expect multiple meetings with the first meeting appearing to consist of a getting to know one another exercise. Also, one valuable lesson I learned early on is that to do business in Korea, the standards are high. Exactness, promptness and professionalism are words to live by when running a business in Korea.

What could be done, should be done, to make Korea a more hospitable place for SMEs and entrepreneurs? Establishing win-win cooperation and fair trade practices between large companies and SMEs is a must. For example, improvement of working conditions at SMEs through welfare and training, fair trade practices between principal contractors and subcontractors, and guidelines for part-time jobs at SMEs especially guidelines that protect interns by abolishing harmful, dangerous work and apprenticeship periods as well as getting rid of the so called, ‘passion pay.’ Does Korea have a comparative advantage for building companies versus other places in Asia, like Singapore or Hong Kong? If not, can it build one? What is necessary? Korea along with Singapore, Hong Kong and Taiwan are all freemarket and developed economies; and a case could be made for each one of them as being the most advantageous. As most of your readers probably know, these four nations are referenced as the ‘Four Asian Tigers ( sometimes Four Asian Dragons)’. According to several sources, “All four nations were notable for maintaining exceptionally high growth rates (in excess of 7 percent a year) and rapid industrialization between the early 1960s (mid-1950s for Hong Kong) and 1990s. By the 21st century, all four had developed into advanced and high-income economies, specializing in areas of competitive advantage. For example, Hong Kong and Singapore have become world-leading international financial centers, whereas South Korea and Taiwan are world leader in manufacturing information technology. Their economic success stories have served as role models for many developing countries, especially the Tiger Cub Economies.” However, for Korea to be the most advantageous for building companies compared to the other 3 Asian Tigers there is one area I think they need to get a handle on: Labor, Labor and Labor. The current administration is focusing on this and as of September 2015 have proposed 5 labor bills for labor reform. Moreover, to be competitive they need to execute in 4 areas. 1) wage payment in accordance with duties and performance, 2) gradual reduction of working hours and implement flexible working hours, 3) human resources management based on job competency, and 4) stabilize employment of non-regular workers and tackle discrimination. If Korea can successfully implement these labor reforms then this will help build companies over the long-term.


KBLA Community

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Diabetic Recipes

Curry Chicken for 6 You simply can’t go wrong with curry. It’s loved the world over and with good reason. This recipe makes use of chicken, but you can substitute any meat you like.

Directions 1 In a large skillet, saute chicken breasts in 2 teaspoons oil until golden on both sides. Remove chicken from pan. 2 Saute garlic and onion in remaining oil 5-7 minutes. 3 Add broth, water, and all of the spices to garlic-onion mixture. 4 When well blended, return chicken pieces to skillet. Cover and simmer over medium heat for 30 minutes. 5 Stir in coconut flavoring. 6 Serve over rice or rice/grain mixture.

Ingredients 6 single chicken breasts, skinned, boned, washed 3 teaspoons oil 1/2 onion, chopped 2 cloves garlic, crushed 1/2 cup low sodium chicken broth 1-1/2 cup water 1/2 teaspoon cumin 1/2 teaspoon coriander 1/2 teaspoon turmeric 1/8 teaspoon allspice 1/8 teaspoon ginger Dash dried fennel Dash ground black pepper 1 teaspoon coconut flavoring

Nutritional Information (Per Serving) Calories: 145 Protein: 19 g Sodium: 43 mg Cholesterol: 52 mg Fat: 6 g Carbohydrates: 2 g Exchanges: 3 Low-Fat meat


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KBLA Community

Fascinated by the Undulations of Life Medical Doctor, Technologist, Writer, CEO, International Man of Mystery, Dr. Ogan Gurel tells us why he won’t stand still and neither should you. You’ve had a very diverse career, spanning medicine, writing, business, and more. Please share with us a brief self-introduction of yourself and an overview of your life’s journey so far.

Before we talk about that, you’ve no doubt come across some very interesting people. Who would you describe as having had a particularly significant impact on your life and career?

I am the CEO of a new venture, NovumWaves, dedicated to developing terahertz technologies for novel applications, and through this we aim to revolutionize medicine. I also serve as Innovation Ambassador at the Korean Business Leaders Alliance and hold academic appointments at the Samsung Advanced Institute of Health Sciences and Technology, the University of Melbourne, and Libera Accademia Belle Arti in Brescia, Italy.

I’ve had the good fortune to meet many remarkable figures— there’s no way to count them all. Back in college, often the time for one’s most formative experiences, I came across many wonderful people, but three have had an especially lasting influence.

Throughout my life, two things have endlessly fascinated me: biology and innovation. How life works—and in the disease, how it doesn’t—is truly amazing, though much remains a mystery. Einstein once said, “The most beautiful thing we can experience is the mysterious. It is the source of all true art and since,” adding that absent mystery one “is as good as dead.” And growing up in New York City, I’ve always sought to imagine new, different, and better ways of doing things—that is to say, innovation. One seems more alive when you are sensitive to the world and try to make it better. So I would add to Einstein: “So long as you’re not moving forward in this world of mystery, you are not quite alive.” These twin interests led to studying biochemistry at Harvard, then medical school and graduate school at Columbia, around which time I developed the scientific idea, the one that underlies NovumWaves, which in turn motivated a transition to business, including consulting (at Booz, Allen, Hamilton and Sg2), executive management, the Samsung Advanced Institute of Technology (SAIT), various other roles, and eventually where I am now.

There was Bruce Beall, coach of the varsity lightweight crew. Harvard crew is a serious sport with Olympians and other elite athletes always passing through the boathouse. Bruce Beall was one such Olympian and he kindly agreed to write a letter of recommendation to medical school on my behalf. Paraphrasing, he wrote that “Ogan is one of the most dedicated persons I’ve ever met. And I should know, since Olympic competition epitomizes dedication.” Truly humbled, these words have continued to inspire, as I think to myself, “An Olympian once praised my dedication, so dedicated I must be!” Bruce’s recommendation was more than that: they were the words of a master coach, one who to this day still guides me from afar. Another influence would be Derek Bok, former President of Harvard. At the Baccalaureat address she exhorted to the newly graduated: “Go International!” Taking up his advice, I went out into the world, working in France, Germany—many other locales—and now Korea. And then there is Martin Karplus, in whose research group I did my senior thesis at Harvard. Prof. Karplus won the Nobel Prize in Chemistry in 2013 and his pioneering work in protein dynamics has been inspired me ever since, essentially the fundamental idea behind NovumWaves. Basically, protein dynamics means that proteins, the machinery of life and the targets for most drugs, are actually not solid objects but are vibrating—like living and breathing. These motions are essential to protein function—indeed, what makes life happen—and much of what I have done over the past 30 years has revolved around exploring the implications of this fact.


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So would that be your current mission in life? My overall mission—both past and present—is to impact positively on this world. As the saying goes, “Nothing is more important that one’s health,” healthcare has been my focus. More specifically, I’ve sought to explore and develop, scientifically and practically, the implications of what I call protein electrodynamics. Launching NovumWaves is the latest incarnation of that. Can you tell us about your Korea experience so far. When did you come? Why did you come? How long do you plan to stay? By the way, this idea of “Protein Electrodynamics and Terahertz Medicine” represents a form of “Bioelectronics”, something which is gaining increasingly attention. For example, GlaxoSmithKline launched a multi-million dollar bioelectronics initiative. Korea is certainly one of the world’s leading centers in electronics. Hence the connection to Korea. So I arrived here over five years ago—November of 2010, joining as a Director (부장) in the CTO office in the Samsung Advanced Institute of Technology (SAIT). I accomplished quite a bit at SAIT, advising them generally on biohealthcare technologies, writing research papers, even a few patents. And while in the Open Innovation office at SAIT, in collaboration with leading researchers around the world (for example, at MIT, Ohio State University, University of Southampton, University of California–Irvine, University of Texas–Dallas and others), we actually advanced the protein electrodynamics idea quite a bit. How long will I stay? I plan to stay for as long as necessary to get this idea to the next level. But as President Bok, told us, “Go International,” so I will work wherever is best to make this reality. But for now, Korea is the place. Tell us about your book Waves. Why did you write it? What were your goals? What role does it play in your life? Waves is essentially the literary embodiment of the protein electrodynamics and terahertz medicine idea. As mentioned, this idea has medical applications, for both diagnosis and therapy. But it can also be used for military purposes. Like any technology, there are many sides, many possibilities, and the novel explores such wider dimensions. This is, in my own mind—and to share with others—is what I wished to accomplish. There are other aspects to Waves. Published back in February of 2009, the book also serves an intellectual property purpose, making public this core idea of terahertz radiation being used to detect and modulate proteins for diagnostic and therapeutic purposes. NovumWaves, or anybody for that matter, can enter freely into this field with the winners in this industry being those who succeed with its various technical and market implementations. But ultimately Waves is entertainment. I loved writing it—though not at all easy—and it gives me great pleasure to hear when

So what exactly is “protein dynamics, “protein electrodynamics” and “terahertz medicine?” The idea is actually quite simple: 1. We know that proteins vibrate. This is protein dynamics and what Martin Karplus (and others) pioneered. 2. We also know that proteins have charges and dipoles. This is a fact. 3. And vibrating charges and dipoles emit and absorb electromagnetic radiation, which simply arises out of the laws of electromagnetism, what are often called Maxwell’s equations. This, also, a fact, one which makes radios smartphones and all our electronics possible. 4. So therefore, proteins should emit and absorb electromagnetic radiation—I call this protein electrodynamics—and there have been many studies, including some I have been involved with, showing that this is, indeed, the case. 5. Therefore, proteins are like radios. 6. Radios can be detected and can be modulated. That’s just the way they work. 7. And so proteins can be detected and modulated. 8. This “detection” and “modulation” becomes a new form of diagnosis and therapy respectively, 9. It turns out that frequency of these vibrations lie in the terahertz range, which is between the microwave on the low frequency side and the infrared on the high frequency side of the electromagnetic spectrum. 10. Hence this leads to the possibility of terahertz medicine, namely new ways of achieving diagnosis and therapy in a non-invasive and biologically specific way. NovumWaves is a venture that aims to bring all this—protein electrodynamics and terahertz medicine—to reality.

people read and enjoy it. It’s a wonderful feeling to be able, simply through one’s writing, to touch someone from a afar. Tell us about your goals for the KBLA Innovation Series. Innovation is defined as bring new ideas to reality, usually through the combination of such ideas. So, simply put: in addition to bringing some of the leading thinkers and doers to our KBLA membership, I hope that the seminar series itself can spark new innovation among those participating. So the KBLA Innovation Series is not just about innovation, it is innovation. Now in practical terms, that means we bring together not just the thought leaders, expert in the “idealities” of innovation, but also those who grapple with its everyday “realities.” We recently hosted Philipp Kristian Diekhöner from Singapore, who has launched several large and small corporate innovation initiatives. Last month, we had Karyn and Eric Schroeder, joint leaders of the Kimberly-Clark Global Innovation Center, present their experiences and best practices. Many more outstanding events are coming up: Ben Chung, Innovation Center Lead at Cisco, Dr. YoungHwan Kim, the CTO of Samyang Holdings and previous EVP leading


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KBLA Community

the Materials R&D Center at Samsung, Chungha Cha, Co-founder and Chair of the KGBC “Re-Imagining Cities” Foundation, and others. So I hope all KBLA members will participate in this informative, engaging, and very wellreceived seminar series. How has coming to Korea changed your life? How has the country and its people shaped your thinking? Being in Korea, deeply embedded in Asian culture, has offered profound learning experiences. I would say that among all the developed nations, Korea is probably among those that are most culturally different for Americans and other westerners. These cultural differences are certainly challenging and one is often outside ones comfort zone. But I am a better, smarter person being exposed to such new and different kinds of thinking and living. There is a word in Korean (틀리다), which has two meanings: one being “different”, the other being “wrong.” For me, different is often right. If you could give policy makers in Korea a single piece of advice, on any subject, what would it be? For policy makers and business leaders, it is important to encourage openness to new and different ideas. There are tremendous pressures, some of it subconscious, to conform, to resist change and outside influence. This is not just a Korean problem, but it is especially extreme here. Consider the language influence cited above, witness that all cars here are either black, silver, or white—and so on. And finally, there’s North Korea, whose entire national psyche is about selfreliance and resistance to all things foreign. They call it 주체. I call it failure. South Korea, acutely dependent on an exportdriven economy, categorically must be open to the outside influences and ideas. If you could give business leaders in Korea a single piece of advice, on any subject, what would it be? My advice to business leaders in Korea, again, is to be open to

new ideas, and in particular to be globally minded. I’ve advised many startups while here and I would say that the single biggest factor holding back their success is not being globally minded. Notwithstanding recent pressures, no one can deny that Samsung has been enormously successful. Part of the reason for that was the Chairman’s insistence back in the mid1990s that even if the company was best in Korea that meant nothing. They must be the best globally. Like Derek Bok told us, “Go International!” With respect to expat business leaders, my advice would be similar. Western companies should likewise not believe that their way is the best way. Insisting to “Do it the American Way” is similarly close-minded. [Back in the 1980s, everyone thought the Japanese had developed the best management system. You can see where that led.] Anyway, we can learn a lot from Korea, and likewise Korean business leaders can learn much from others. Such is the mission and spirit of KBLA, bringing together leaders from different backgrounds for mutual learning and advancement. As mentioned before, “If we are not innovating, we are just as good as dead.” You have done a lot in your life already. What’s next for you? I’m involved in many projects here in Korea and globally, including at KBLA as well as serving as President of the Board at the Camarata Music Company. But my main mission, my life’s work, will be to launch and drive forward NovumWaves. As mentioned, it is a terahertz technology holding company / “venture builder” with the goal of revolutionizing medicine through what one might call the “radiation of life.” We have a three-stage execution model (all initiated in parallel) involving a near-term industrial applications “roll-up”, a mid-term wellness/cosmetic startups, and longer-term medical projects aimed at cancer, Alzheimer’s, diabetes and other serious conditions. Above all, I hope to have fun and make a little progress in understanding that mystery we call life.


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Accelerate Korea

Taking Korea’s Startups to the World Korea’s startups face a unique set of challenges to making their way in the world. This is how one team aims to help them.

How did you both end up in Korea? How did you meet each other? A Samsung advertisement set in Thailand was in fact indirectly responsible for the serendipitous startup alliance. While working as an Executive Producer with a leading Korean advertising film production company, Carlo met Alina, who at the time was doing some research for a film industry related startup she considered embarking on. During an animated conversation, he presented her with the opportunity to join his project team in Korea which, at the time, was developing a project very similar to the one that she was considering. After about a year of negotiations and discussions, the

original team had broken up due to a disagreement between the founders about the vision and execution of the project. However, because Alina and Carlo had developed a strong working relationship during that time, they decided to explore opportunities together. One of the dissolved project’s service providers, a leading Netherlands based Cloud Computing Corporation, invited the pair to join them on an internal project. This later led to a partnership in a jointly founded VC focusing on cloud computing related investments. But Carlo’s nascent interest in the Korean startup scene began long before then, during his time in the advertising film industry (TVCs) while working with some of the best advertising creatives, agencies and directors in Korea. At


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KBLA Community

www.acceleratekorea.com

the forefront of developing the brand of Korea’s leading products, he realized (before the startup boom) that Korea was undergoing a transformation creating new, innovative ideas. This wave was different from previous innovation strides made in Korea, in that Korea was starting to create its own brand identity with more original ideas. Other countries began giving recognition to Korea’s contribution to the Global ecosystem as being product and design leaders, and this awareness increased the hiring of Korea’s TVC Film Directors, Creative Agencies and Post Production Resources. Beyond that Korea had, over the previous years, proven its ability to produce leading quality products. The combination between being known as a country producing quality products for a significant period of time, and subsequently also a premium brand and design hub, began repositioning Korea on the global market as a leader. With big advertising and media usually being the trendsetters, and with the (at-the-time) startup market becoming increasingly well accepted, Carlo recommended to the venture builder team that Korea is the ideal place to be and is a rapidly developing market. But before chasing the Korean startup Tiger, Alina began doing her research. Well connected within the global startup community throughout Asia, Europe and North America, she consulted some of the Global leaders within the startup community to see if she was able to find an endorsement for this coming trend. The results were overwhelmingly positive, which set the ball in motion that would see her relocate to Korea. Where did the idea to create Accelerate Korea come from and what was the initial idea behind it? How has that idea changed over time and why? What is your goal for the organization now?

Around the same time the Netherlands based VC was created, Carlo and Alina decided that although the startup market was growing rapidly, the Korean community as a whole were not fully aware of the value of entrepreneurship. With his past experience and her interest in the film sector, a decision was made to start a project to build a Television Broadcasted Accelerator. The notion was that foreign and Korean startups would be selected to compete for funding over a twelve month Live Transnational Startup TV series operated in Korea. This was also strategically structured to form part of the VC’s launch into the Korean, Asian market. After brainstorming through hundreds of options, the innovative duo came up with the name for their Live Startup TV Series, Accelerate Korea. Meanwhile, in just a couple of months, Alina became well known within the Korean startup ecosystem for her global connectivity. The result was that during the initial project planning phase for AK, she was contacted by the government agency lead from KISED to help connect them with the European accelerator market. After learning that Accelerate Korea is in fact also a VC with acceleration services and partners with long-standing track records, AK pivoted when we decided to launch one year earlier than planned. Last year saw AK’s first Korean Transnational Accelerator taking five Korean Startups (sponsored by the Korean government) to Berlin. By the end of the year the team had incubated and accelerated 92 startups, and collaborated with 20 leading global accelerators. And so, Accelerate Korea as it is known today, came into existence. What has been the most difficult part of creating this organization so far? What has been much harder than you expected? Having received much media attention early on, acceptance has been the greatest challenge to date. Accelerate Korea is an


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organization that genuinely believes in the Korean ecosystem, but despite the positive global media and promotions that it has provided Korea and the Korean startup Ecosystem, being accepted as a genuine player within the market has been a continual challenge. Korea, by nature, is an exceptionally challenging market to enter. Although this applies to all new entrants into the market including Koreans, it is especially difficult for foreign nationals in a sector dominated by Korean organizations. The manner in which a foreign national might work is also not necessarily the same as what a Korean may go about things, and this has at times created some additional challenges. What are Korea’s strengths and weaknesses in generating startups? The Korean startup Ecosystem receives significant funding from the Korean government. This funding goes towards the development of the ecosystem as a whole, the Korean

organizations working with startups, and of course the startups themselves. This funding has energized the rapid growth and development of the startup ecosystem. As a norm, Koreans are powerful trend setters and strongly support anything that is considered nationally beneficial. The combination of government funding and the aforementioned nature of Koreans has fast positioned the country as being one of the most funded government startup ecosystems in the world. More so, it has also significantly increased the number of startups being created across all sectors; by students and by experienced professionals with years of industry and technology experience, along with a number of startup related organizations and co-working spaces. Overall, the hands on intervention has been paying off in this regard.

Out of all this positivity, however, there is a negative symbiosis. The increased government funding has resulted in many organizations, not previously involved in the startup ecosystem, jumping on the startup wagon, presenting themselves as startup or entrepreneurial organizations. Despite lack of experience but due to success as businesses, they have been receiving a lot of government funding even though they have not necessarily been able to add direct entrepreneurship value to the startups. Startups have also been receiving excessive funding from the government for unvalidated businesses. Startups, as a global norm are required to show traction in what they are doing to receive more funding. However, because they do not have to push hard and learn how to sell their startups to private investors which in itself forces startups to make pivots in their business and forms part of the their growing process, we are now finding that many of these startups end up having one or two aspects of their business

very strong while others, are weak and underdeveloped. This is especially true for marketing, business models and operations. Startups receive one round of funding after the other, sometimes up to one million dollars, with perhaps one early stage private angel or VC taking a large equity at the start for a small investment and the rest of the funds in the form of free government grants. The problem is that as a result, startups do not always have to raise investment funds and learn the hard way early on. Hence, they find themselves developing their startup to the point where they need Series A++ funding, however have no brand, revenues, marketing or business model in place to support it. To compound the resulting problem, conservative Korean investors are not willing to take


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the risk by investing at this stage unless the respective startups are demonstrating very good revenues. Hence, at present Korea is suffering from a Series A+ drought even though many of the technologies being developed hold exceptionally high yield value, in some cases life changing impact value.

visa policies, open source business policies, let go of the fear knowing they are already leaders, trust in their abilities and advancements and do so without arrogance or insecurities. The alternative will have dire consequences for the country as a whole and the path it chooses will be key in the coming months in particular, and years.

Essentially there are a number of great things happening in the startup market and its growth is promising, but there are also Can Korea effectively attract foreign talent? Does it need a number of challenges that the market is currently facing due to? Is finding the best people and getting them to Korea an to its rapid growth and the vast access to government grants. essential skill for Korean startups or does Korea have the We nevertheless are confident that in the coming months to manpower it needs already? two years, these two factors should balance out and stabilize, giving rise to a few new billion dollar companies. Korean This is a great question. Yes, Korea has all the talent it needs organizations that have just been along for the free ride will and much more still untapped. However, with the exception eventually leave the playing field. On the other hand,those of a select few, that talent has largely been developed inside a who truly believe in the ecosystem will prove their value and bubble, inside of a corporate follower culture where stepping mature through knowledge and experience outside of the box is generally frowned gained, as Koreans have already proven upon. The country has always had some of themselves to be masters of rapid growth its citizens traveling the world and bringing “Korea has all the talent and development. Startups will be obliged what they have learned back to Korea. The it needs and much more to learn the correct way of doing things as balance between having an exceptionally they start looking outside of Korean borders still untapped. However, hard working and skilled but protected for funding and as government funding workforce at home, with a few openwith the exception of a dries up. After all, at the forefront of most minded key people as leaders, has served the Korean Startups’ thinking is the desire to select few, that talent has country well for many years. But moving make it big and Go-Global. When this forward this will, by far, not be enough in largely been developed pivotal point is reached, Korea will mature my opinion. Countries around the world inside a bubble, inside of a who have always been more open are now as a startup ecosystem. The country will show the world what it really has to offer corporate follower culture opening up even further, allowing for the and the true value of Korea will be realized. bleeding of ideas and technologies across where stepping outside borders. This is an exciting driving force Is Korea a competitive place for startups in entrepreneurship as the thought and of the box is generally and new ventures? Do you see it idea leaders of the world become energized frowned upon.” competing effectively with Singapore, with doors opening and new opportunities Hong Kong, and other places in Asia? arising from them. Investors are carefully considering the opportunities of looking outside their local Despite the aforementioned challenges, Korea is still one of ecosystems and realizing the potential of business across the most technologically advanced countries, not only in borders. Asia, but globally. The challenge lies in that it has not yet been able to fully take its true value to the rest of the world. For Korea to remain relevant after it has worked so very hard If Korea can successfully “Open Up” and learn the key factors to make itself relevant is key to its continued growth, and even of success as an open economy necessary for survival in the its very survival. For many years, Korea has been importing current global economic paradigm, then itwill become a leader talent in a very controlled manner and when that talent was alongside China. At present, countries such as Singapore and no longer needed or became a growth threat, those parties Hong Kong’s strongest advantage is that that they are far would be indirectly encouraged to leave the country. This is no more open and have successfully integrated foreign expertise longer feasible. Korea must fully open its doors to allow for the into their ecosystems. Even China is following suit, which is development of healthy competition without the fear of threat. why Accelerate Korea is developing opportunities in China. It also needs the influx of outside talent able to help Koreans The challenge for Korea is that it has always been one of the bridge the creative gap at home in both global business least open countries, but due to the strength of its people and knowhow, ideation, business modelling, etc. It is also necessary the Korean desire and ability to always do things better, they to hire and partner with this talent so that they can be utilized have managed to grow to be one of the leading technology to help it expand into the global market. This is crucial because countries. However, if they do not make the same strides it is simply not realistic nor possible to expect most Koreans to socially and culturally, then this advantage will likely be lost fully understand how business is done outside Korea. Korean over time. So, Korea is presently at a tipping point, which as culture and modus operandi is simply too different. Koreans we know is where real growth can happen. If it is able to break still want to do Korean-style business in other countries, while through and step outside of its comfort zone, combined with their expectation is that foreign nationals in Korea will do its “fighter” mentality (a Korean cultural driver) and ability things the Korean way. To not only survive but thrive, Koreans to make everything better, then Korea will become the leader must learn to open up and become a little more flexible when within Asia and the rest of the world: Open ecosystem, open conducting business with non-Koreans before it rapidly ends


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up isolating itself. The most concerted efforts and capital injection alone will not be enough in the long run. Although the Korean market is large, it cannot compare with countries like China or India who are themselves learning that in order to make themselves relevant, they must open up to foreign talent and fuse with a globalised society. Furthermore, Koreans must also trust foreigners, especially those with executive positions and be open to their ideas, opinions and allow for different leadership styles to flourish within Korea. Essentially, Korean executives must learn to delegate control, not only to foreign nationals, but also to their Korean juniors. What would you recommend to policy makers regarding startups in Korea, if you could recommend just one thing? Take small equity for the capital grants given to startups that they can then buy back at a later stage. Ensure that startup professionals are the ones providing these grants so that they have to better sell their ideas, while bad or underdeveloped ideas don’t get funded for years before going to the startup graveyard. Open up completely, changing the immigration visa policies so that local foreign and Korean startups can more easily hire foreign talent, and foreign startups can more easily get startup visas. Also, ease regulations for foreign investors. Tell us about some of the homegrown startups in Korea you are excited about that you think could go global. Although lacking experience, the vast diversity of talented entrepreneurs in Korea is one of the key drivers for innovation. There are many exciting innovations coming out of universities and R&D labs, but with the new creative economy shift there are also many senior engineers and business people with twenty plus years of experience breaking away from large conglomerates entering the market with new, impressive ventures. We are seeing some very interesting things happening in the IoT, High Tech and the Medical Technology fields to name but a few. In terms of technology, we have seen several companies with tremendous potential for the global market. But the onus remains on individual teams and their ability to overcome cultural challenges to execute on a global scale. Tell us about the KBLA Venture Forum. What are the goals for that? Where do you see that going in the future? We are honored to host the “KBLA Venture Forum Breakfast” in partnership with the KBLA every two months, during which we co-select one startup to give a long-form pitch to the members of the KBLA. The startup presents its company, team, product and business model. The interaction is mutually beneficial as it presents an exceptional opportunity for startups to engage with other industry experts, while KBLA member leaders get the benefit of being exposed to new and potentially disruptive developments in the market. We see the “KBLA Venture Forum Breakfast” as a unique opportunity for senior executives and industry experts, not usually exposed to the startups, to learn more about innovative new ideas. It also provides stimulation and expansion of thinking to the

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potential of ideation outside of the box, as well as outside the confines of corporate rationale. Startups, on the other hand, have the opportunity to gain valuable insights from senior industry experts, to learn how they think, and what is needed to target corporations as an end client. We further see the Forum as an opportunity for startups to find potential 1-to-1 mentors and advisors who understand their target industries, and for these mentors to become potential stakeholders in these startups, perhaps in the form of investors or as potential acquisitions for their corporations. What’s next for AK? Where do you see the organization in 5 years? 10 years? With our VC 22 Centurion Ventures headquartered in Amsterdam, we envision a roadmap that stretches out to the 22nd century. Primarily, we aim to fast-track innovation and the quality of life by bringing future technologies to the here and now. Our key sectors are IoT, ICT, high-tech, medi-tech, fin-tech, energy / smart cities, education, and other. For Accelerate Korea, as a portfolio company of our Dutch VC, we will continue with our mission to develop, educate and connect Korea’s startup ecosystem with others globally. In order to truly fast-track innovation we target to launch several incubation and acceleration programs in China, North America, Africa, Europe, and other regions in the future, many in partnership with existing key players in their respective markets. This target will run parallel with creating a metaecosystem with transparent information exchange, and we are soon to start outreach for LPs for new funds being raised. At the same time, our portfolio will include enabling the creation of new opportunities and cross-border-innovation for forwardthinking entrepreneurs and corporations. What’s next for Carlo? What’s next for Alina? As entrepreneurs ourselves, with a 50+ year roadmap, we are fervently seeking to enable the right startups and domain specialists to help us develop our longevity technology. Expect a monumental global shift driven by Novum Waves over the coming years... Longevity aside, we will continue to expand on our current vision as we develop more partnerships globally. We are currently developing our Venture Builder, where we operate as close development partners with selected startups, along with some JV projects and in-house startups. Also in development is our consultancy, which isolates acceleration services that we also package to select startups who prefer this kind of engagement. Additionally,we are very excited about our nascent student entrepreneurship programs, along with a few other things which, for the moment, will have to remain behind closed doors until we are ready to unveil them. Recently someone mentioned that we seem to be aiming for world domination. Our response? World domination is a thing of the past; the now and the next century is all about world change and executing as a collective.


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Jocelyn Clark Living life to the beat of a very different drum Professor Jocelyn Clark tells us what studying and practicing Korean traditional music means to her and what it could mean to Koreans.

How long have you been in Korea and how did you end up here in the first place?

What made you finally commit to living in Korea and to learning the gayageum?

Altogether, about 12 years now. After a few years in Japan and China, I originally arrived in Seoul in 1992 on a scholarship to study gayageum at the National Classic Music Institute—now the National Gugak Center

I should answer those separately. I committed to learning the gayageum first. Later, I moved here as a kind of economic refugee; I needed the professorship at Pai Chai University— and, being an American, the health care of course. While I was finishing my PhD, I had put together a New Music festival called CrossSound in Alaska and produced a weekly radio show affiliated with the festival. I was living in my hometown in Juneau, Alaska and touring internationally with my ensemble… I knew I had to find a way to start making an actual living. I was exploring prospects, in New York, China, Germany. My eonni and teacher in Bundang, Kang Eungyeong, was the one, in my moment of deciding where to go, who helped me see this is where I needed to be and where I should be looking for a position. She said she would take care of me, teach me, and be my friend and teacher. So, when I got the call to come to the “great rice paddy” that translates to Daejeon, I jumped on the opportunity. I’d only lived in Seoul before, so I wasn’t sure what it’d be like living in another city. But it’s worked well to be situated in the middle of the country—an hour to anywhere, and 10 minutes to the mountains, just like home. I can study in Seoul, Bundang, and Jeonju on the weekends. But my main reason for coming back to live in Korea was that I was really ready for it artistically. I had come as far as I could by myself on the gayageum and needed to resume my work with my teachers. The prospects I’d been looking at, in Berlin, for example, included playing gayageum, but I was feeling stuck. I needed to up my artistic game. So I came back to the source.

Did you always envision spending your life abroad or was it something that just happened? My grandparents on both sides fought in the Pacific—my mom’s dad was stationed at Pearl Harbor at the time it was attacked, and my dad’s dad, who was in Air Force intelligence, was part of the occupation of Japan after the war. My dad lived in Japan when he was growing up and worked for a Japanese company when I was a girl. My mom did fibre art for a while, too, and got to travel to Asia for several international conference/exhibitions. So they took me and my sister with them on business trips when they could—to Taiwan, Hong Kong, Japan, and Thailand. I finished high school when I was 17 and wanted to take a year off to study abroad. Since I had already spent quite a bit of time in Asia, I was going to be adventurous and go to exotic Europe, but I signed on with an exchange program that decided for me where I would go. Since I already had four years of Japanese language in high school in Alaska, I was placed in Japan. That was the beginning. Later, in college, I did undergraduate and graduate course work in regional studies and international relations theory, imagining myself one day working in intelligence or as an ambassador. (I probably watched too many Cold War movies). Performing gayageum, when looked at from a certain oblique angle, is perhaps not all that far away from my original thoughts. Meaning? Well, I think some may argue there’s a kind of . . . subterfuge? . . . in my having made my home in Korea and taken on the study of gayageum—such a deeply embedded traditional art form.

What was special about the gayageum that attracted you to it? I was attracted to the shape (laughing). Not really. When I first came to Korea, I was doing a comparative study of the gayageum, the Japanese koto, and the Chinese zheng. They looked alike, but I soon realized they did not sound alike. I immediately started to think about bringing them together


Photo courtesy of Akdang


28 Photo coutesy of Shuvra Mondal

in a multinational ensemble—something I later did when I formed IIIZ+, a new music ensemble made up of the three zithers from the three main northeast Asian countries (“plus” Korean percussion). I started out learning court music from Yi Jiyoung (Yi Jiyeong), who was at the time a student at Seoul National University , but has since become the head professor of gayageum there. When she quit the National Gugak Center, I moved with my scholarship over to her colleague Ji Aeri, who taught me the fundamentals of sanjo. At the same time, I began to study singing with Gang Jeongsuk, who is now an Intangible Cultural Asset for gayageum byeongchang—singing pansori-style while playing the gayageum. I have to say it took me some time to warm up to Korean music. I had been much more interested in new music, particularly in new music in Japan. I think I always had an idea to eventually apprentice myself to the Sawai Koto School under Sawai Tadao and Kazue, where I had first started studying East Asian zithers through Wesleyan University’s Ethnomusicology program. But then Sawai Tadao passed away, and by then I had learned more about Korean rhythms and modes—what made it groove. I got hooked. At the same time, Sawai Kazue was getting involved with Korean musicians along with her friend and colleague the jazz bassist Saitoh Tetsu. They had a program at the National Theater in Seoul in 1993 with the pansori singer Ahn Sook-sun (An Sukseon) and the “east seas” Donghae kut shaman/musician Kim Seokchul. I wonder if you saw this movie an Australian film maker recently made called “Intangible Asset No. 82” (or “Thank You Mr. Kim” in Korean). It followed Australian percussionist Simon Barker’s search for Kim Seokchul in Busan. He found him three days before his death. I could relate to Barker’s sojourn in that film—as soon as I began to play the gayageum, I knew I had encountered my life’s work. Or rather, it just seemed like

a really cool thing to get good at. I’ve recently been making measurable progress, thanks to the efforts of my current teachers Ji Seongja (Intangible Cultural Asset of Gayageum Sanjo for Jeolla Province), Gang Eungyeong (a student of Ahn Sook-sun and a “protector” (yisuja) of the intangible cultural asset gayageum byeongchang), as well as sometimes Hwang Byung-ki, who is now retired from Ehwa University, but not from king making in the gukak world. Were you never attracted to Western music? What are the differences between Korean music (or other Asian traditions) and Western music? Always. I was always interested in all kinds of music and was trained in Western classical music. I started playing violin at age three when we moved to Washington, D.C., from Hawaii. I had a little 1/16th sized violin. But my luck ran out when we moved to Alaska. There were no teachers in Juneau at the time. So I switched to piano at age four and played clarinet in the band and oboe in the symphony later on. I thought western music WAS music—the only music (a mistake many Koreans make today). Growing up in the Western classical tradition, I never imagined that composers could be living. The biggest difference between Western and Eastern traditions (speaking generally, here, in a very big-picture sense) is that Western music is about harmony. Eastern music is about tone color. In the case of Korea, we can add rhythm to that. The biggest difference between Korean music and other musics of East Asia is in the rhythm. Next would be vibrato styles. But rhythm here is king. Korean rhythms tend to be, if we can even break it down into measures, “in three”—like a waltz in the western context. But since Korean music is not measured, but rather moves in cyclical rhythm patterns—groups of 4x3—often 12-beat patterns but not always—the feeling is NOT that of an um-pa-pa waltz, but something more


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complex. It can leave an uninitiated listener off balance, always looking for the “one.” For the more experienced listener, however, it is riveting when it is done well. How has living in Korea changed your thinking? One thing I have realized since relocating here full time is that there a lot of truth in that saying, “Wherever you go, there you are.” You can completely change your geographic, cultural, and musical context, but you’ll not change who you are at your core. On top of that, in this day and age of instant virtual connection, one can continue one’s old life wherever one chooses to live. It’s not like when we first came to Korea in the early 90s when Roh Tae-woo (No Tae-u) was in power——before even pagers—standing in line in front of the neighborhood phone booth to call home for a few minutes until those remaining in the line got angry and started beating on the booth. In my earlier times in Korea, I was truly cut off from “home” and needed to learn to survive in a truly new place without any umbilical tools. Now, I can go online and read the Juneau newspaper, watch shows made there, listen to my hometown public radio station, and use social media to chat for free with old friends and family.

about 1/300th the amount the UN recommends. I’ve noticed lately when I’m home that Americans increasingly don’t really even like the idea of the arts. Like higher education, for many, art is considered elitist. Korea, on the other hand, is proud of being an elitist society in which “we are all yangban.” Thus, like all good yangban everywhere, we read books and we love the geomungo, and, since we don’t really know the difference between the gayageum and the geomungo, we also like the gayageum. Gugak, or “national music” provides a kind of metaphorical home for Koreans, one distinct from contemporary life. The gayageum stands for the blood of the nation, or at least for its metaphorical homeland. We want it to be there when we’re ready for it, just like grandma should keep up the family home in the provinces (just in case we want to brave the traffic for the holiday), while we live in Seoul. But the kids who are performing gukak are also living in Seoul and need to survive

There is one way I think living here (and in East Asia in general) has changed me though— being part of a minority, whether in the context of performance, or academia, or just on the street, has been eye-opening and has made me very sensitive to racism back home. I have no complaints, but one learns about being other here. Mostly, though, I am grateful to Korea. I have no idea who I am, but I’m glad to be here so much of the time (just as I am glad to go home to Alaska whenever I can). What makes you most sad when you consider the current state of music in Korea? How about music in general? We could throw in arts and humanities in general around the world if we are going to start to lament. There is so much to think about with this topic. Sociologists and ethnomusicologists are making careers trying to answer this question. I will start by saying that Korea has done much to support its “creative industries” if we need to use industrial language to talk about these things. Here, one percent of GDP goes to arts and culture (which, of course, in large part, includes gaming). But still, while it’s in line with UN recommendations, that’s HUGE if we are to compare with the US. I keep looking for numbers from the US, but we don’t seem to count that way. We can find statements from the National Endowment for the Arts, for instance, that tell us, “In 2012, the production of arts and cultural goods added more than $698 billion to the U.S. economy. This amounted to 4.32% of GDP,” and, “How big is $698.7 billion and 4.3 percent of GDP? If the arts and culture “industry” in the U.S. were a state, its $698.7 billion would be larger than the Gross State Product of 45 out of 50 states,” yet I read recently in an unattributed comment section after looking long and hard for the numbers that the U.S. federal government only spends 0.003% of its outlays for culture –

Photo coutesy of IIIZ+

on more than brown rice and soy sauce. There are Italian dinners and wine and all the other things that there are in Seoul. The kids are going where the market is and there is no market in the traditional. This goes for all subjects. The Korean department at my university recently closed. That’s like having an American university without an English department. My university also used to have the only lacquer arts department in the country, which it replaced with a flight attendant school. The women (they are all women) walk around campus all day practicing their greetings on everyone they meet. They’re hot if you’re into uniforms, but the national living treasure who was on our faculty has disappeared. My own teacher in Jeonju is in her 70s now. She was in the hospital all last year and none of us could study. There is no one among her students who can replace her depth and breadth. We are of course also going forward in the arts—just as in technology—in ways that we could never have imagined. There are great new things happening. If we could find a way to keep moving forward while retaining our roots, though,


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I think we could make something even more beautiful and interesting that would remain long after we’re gone—unlike the global tumbleweed that so much art now becomes. Is there any hope for a resurgence in Korean music? That depends on how one defines Korean music. Is it something of the blood? Or is it something of the culture? If one defines Koreanness through blood, as Koreans tend to do, then anything a Korean does is Korean. Any music that Sarah Chang plays on her violin is Korean. Then there is another definition of “Korean music” in Korea—anything played on a Korean traditional instrument, be it Pachelbel or Vivaldi. Can you see, how, in either instance, the true flower succumbs to the graft? In a 21st century in which we are headed toward global uniformity of language, culture, art, all non-mainstream works lose out, as our regional tributaries trickle down into national rivers that flow into a shared ocean that, at best, dilutes, and, at worst, pollutes. But I do not want to speak with so much pessimism. Korea is a creative country. Something new will emerge, and it may even be something quite rooted that emerges at the very last minute—when the last national living treasure is on his or her deathbed. But, I do worry about this. In Alaska, when the very last speaker of a native language dies, that is usually it for that language. The created vacuum does not get filled with an authentic adapted cultural derivative—something of the culture to carry it forward. The vacuum simply gets filled with English. But this does not happen every time. It just takes a lot of work and intention to carry forward essential aspects of culture like language—and music. If you could tell Korean policymakers one thing, what would it be? JC: I served on the Alaska State Council for the Arts for six years I think it was. Our job was to create arts policy for the state and adjudicate state grants. It is not an easy thing—I know that traditional arts cannot be the highest of priorities for Korean policy makers who themselves grew up devaluing Korean culture. As monied yangban, in the end, unlike what I said above, politicians go with the popular [high] class flow, which in the general public’s understanding of it, does not go in the direction of Korean culture, but rather the direction that American missionaries pointed it in when they set up the first American-style egalitarian schools at the end of the 19th century. In keeping with Christian doctrine, these schools banned expressions of Korean folk arts—particularly the performing arts, which had too many connections with Korea’s indigenous shamanic culture, and Buddhist, as well as neo-Confucian, traditions. Rhythm, for example, fit in neither with the Catholics’ nor the Protestants’ ideas of what was “civilized.” Drums were not allowed. In Alaska’s missionary days, beginning in the 1800s, the only church that allowed drums was the Salvation Army. This group proved comparatively successful among indigenous people by

making the drum a primary instrument in the “war against sin and social evil.” But, of course, this was the exception in Alaska. Similarly, in Korea, Victorian values among the proselytizers continue to be carried forward. Outsiders’ values and artistic extensions remain the gold standard of what are now considered the accoutrements of the high class in Korea— western classical music and Christianity. Today, a Korean student taking up traditional music, as a hobby for instance, has little advantage over a Western student. Both have grown up listening to Western classical and/or pop music almost exclusively. I mentioned earlier that gayageum represents a kind of metaphorical grandma’s house for Koreans—it’s comforting to know it’s there but many feel resistance when it comes time to visit. I guess what I would suggest to lawmakers is that gukak cannot survive on the adoration of foreigners even if it hitches its boat to hallyu. The only way to get foreigners to love Korea is for Koreans to love Korea in all its guises—to get off the Internet and spend a little time in its actual provinces. I fear I am starting to sound like Mao (laughing). I should communicate better. What is left to achieve for Jocelyn Clark in living and learning about Korean music? I feel strangely unprepared to answer questions about my future. I used to be so good at planning. I had a bunch of fiveyear plans. I’m more of a Daoist these days, which isn’t to say I am floating the rivers aimlessly composing poems in my head while waiting for a wine cup to drift by (though that doesn’t sound unlike my life in a way). I am more in the Seven Sages of the Bamboo Grove tradition in that I’m obviously keeping my connection to the “court,” which, in our modern situation, of course means academia and “private patronage”—one needs to eat after all. I can’t envision the future, but I am made aware by my own desire to keep practicing and improving (as a gayageum player and as a university professor), that I do carry certain aspirations. I want to record sanjo and am working steadily toward that. The sanjo of my “school” is 74 minutes long without rests and must be memorized. It takes time to learn. And I would like our ensemble IIIZ+, which has been less active since the death of our koto player and since I came to Korea to work full time. And there is writing. I enjoy both academic writing and journalism. My ultimate goal, like any good Confucian daughter of the court, is to learn how to become fully human (ㅋ)—I think that’s how I got into academia and what drew me into the arts in the first place. I’m not sure a person can do anything to become smarter or more talented, but one can spend time thinking and practicing, trying to remain unperturbed by life in a thoughtful way or by trying to help others enjoy their lives. That’s probably what getting up on the stage is about. If I can learn to do that without fear—in a way that gives joy to others and fulfills me—then I will have succeeded.


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“You only live once, but if you do it right, once is enough.” - Mae West


32

Deal Flow

2nd Quarter 2016 Export Business Survey Index

International Investment Position in 2015

On March 29, the Korea International Trade Association (KITA) released its 2Q 2016 Export Business Survey Index (ESBI). The overall ESBI for 2Q 2016 was 98.7, with most industries predicting the second quarter will be similar to the first quarter, with semiconductors and shipbuilding expecting it to be worse. The single greatest anticipated reason for export difficulty is poor economic conditions in target export countries.

On April 21, the Bank of Korea (BOK) released its preliminary figures on Korea’s international investment position as of the end of 2015. Korea had a total of 776 billion USD invested overseas as of the end of 2015. International investment increased 8.0% year-on-year. Foreign direct investment was greatest to China (24.4%), while securities investment to the US (41.8%). Overall investment increased to every region, with the exception of China.

Poor economic conditions in target countries (19.2%) were the single most anticipated difficulty for exporters in 2Q, followed by buyers asking for lower prices (14.7%), and funding issues (14.7%).

Slightly over 50% of overseas investment in 2015 was conducted or held in US dollars. Assets held in all currencies were up, with the exception of the Chinese renminbi and Korean won; investments and assets held in those currencies declined 11.32% and 9.83% year-on-year respectively.


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Decreasing Influence of Top Ten Trading Countries On April 6, the Hyundai Research Institute released a study on the declining influence of the world’s top ten countries by trade volume. While Korea has been established within the top ten countries in terms of trade volume in recent years, that list’s trade volume relative to overall world trade has been increasingly diminished over the last fifty years. Per the report, Asian countries have tended to become more dependent on other Asian countries (for trade), than they were fifty years ago. For the purposes of the original report, Korea was first established on the top ten list in 2010 (at ninth, accounting for 3.1% of world trade); as of 2014, it was ranked seventh, accounting for 3.2% of total world trade. The total share of top ten trading countries by in 2014 amounted to 55.6% of world trade by value, continuing a general downward trend from 73.5% in 1962.

The growth of trade between top ten countries dropped significantly in 2014 (8.8 trillion USD), when compared to 2010 (7.3 trillion USD). Previously, average annual growth over ten-year periods starting in 1970 had amounted to roughly 100%. The share of world trade being conducted between top ten countries has also dropped since 1962, now accounting for 25.6% of world trade. While trading partners for Asian countries were fairly evenly distributed in 1962, inter-Asian trade accounted for over half of trade by Asian countries in 2014.


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Legal Legal analysis provided by Lee & Ko.

Act on Promotion of Information and Communications Network Utilization and Information Protection and the Personal Information Protection Act Amended

A

mendments to the Act on Promotion of Information and Communications Network Utilization and Information Protection (the “Network Act”) and the Personal Information Protection Act (the “PIPA”) were promulgated on March 22, 2016 and March 29, 2016, respectively. The amended version of the Network Act (the “Amended Network Act”) and the amended version of the PIPA (the “Amended PIPA”; collectively with the Amended Network Act, the “Amended Acts”) both contain a number of farreaching amendments that raise the overall level of regulatory requirements applicable to information and communication service providers (“ICSPs”) and data processors, respectively. Under the Amended Acts, ICSPs and data handlers are required to comply with stricter data processing principles and are subject to heavier penalties in the event of violations. The Amended Network Act will take effect on September 23, 2016, with the exception of the requirements regarding consent for the granting of the Smartphone Access Authority (to be defined below) (which will take effect on March 23, 2017), and the punitive damages provisions (which will take effect on July 25, 2016). Meanwhile, the Amended PIPA will take effect on September 30, 2016. The provisions of the Amended Acts with the most significant implications are summarized below. 1. Amended Network Act (1) New Provisions Regarding Smartphone Access By App Developers (Article 22-2) · From March 23, 2017, in the event any ICSP (such as, a smartphone app developer) needs to access certain data stored on or functionality of a user’s smartphone, it must obtain prior informed consent from the user. For this, the ICSP must notify the user that the ICSP needs certain access authority (“Smartphone Access Authority”)– e.g., by distinguishing the authority that is necessary to perform the fundamental functions of the app (“Necessary Authority”) from any other (“Optional Authority”) and explaining the reasons for such categorization – and obtain the user’s consent to explicitly granting the Smartphone Access Authority to the ICSP. · Further, ICSPs (e.g., smartphone app developers) may not refuse to provide the subject services to the user based on the fact that the user did not consent to granting the developer the Optional Authority.

· On the other hand, in this relation, the developer/ supplier of a mobile handset’s basic operating system, the manufacturer of a mobile handset, and the developer/supplier of a mobile handset’s software are required to implement necessary measures to protect the personal information of the user – including, on their products, having in place a process pursuant to which the user may provide or withdraw his/ her consent to granting the Smartphone Access Authority to ICSPs. · Details of the foregoing requirements – e.g., the scope of the ICSP’s access rights, the method for obtaining the user’s consent, and other measures that an ICSP is required to take – are yet to be prescribed in the implementing regulations of the Network Act. (2) Stricter Requirements For Outsourcing And Reoutsourcing The Processing Of Personal Information (Article 25(6)-(7)) · In the event the ICSP wishes to outsource the processing of personal information to a third-party service provider (the “Outsourced Processor”), it must enter into a written arrangement with the Outsourced Processor. The Outsourced Processor may not contract out the processing of the personal information to another third party unless it has obtained the consent of the ICSP. (3) Protection Of Personal Information That Is Transferred Across National Borders (Article 63(2) & Article 64-3(1), (8)) · From September 30, 2016, the user’s consent must be obtained for the following types of cross-border transfer of personal information: (a) provision of personal data to a third party (for the third party’s benefit) (including cases where the personal information of Koreans is accessed from abroad), (b) outsourcing of processing of personal data to the Outsourced Processor, and (c) storage of personal data outside of Korea. · However, in the case of (b) or (c), there is an exception to the consent requirement, and the exception can apply if all of the following elements are satisfied: if (i) an agreement for the provision of information and communication services has been entered into between the ICSP and the user, (ii) the cross-border transfer of the personal information is necessary to increase the convenience of the user, and (iii) the ICSP has disclosed all required matters via its privacy policy or individually notified the user of them via a statutorily-


36

Legal

prescribed method such as email. · More importantly, in the event the ICSP transfers personal information across borders without obtaining the subject user’s consent, it may be subject to (i), in case of (a) above, a penalty surcharge of up to 3/100 of the revenue it generated from engaging in such transfer, or (ii) in case of (b) or (c) above, an administrative fine of up to KRW 20 million. This change would make it significant for ICSPs to review in advance whether or not a contemplated cross-border data transfer falls under a transfer that requires consent under the Network Act. (4) Reporting Requirement Of The Chief Privacy Officer And The Legal Responsibility Placed On Corporate Executives (Article 27(4) & Article 69-2(2)) · In the event the Chief Privacy Officer of an ICSP becomes aware of a violation of a data protection/privacy law or regulation, s/he must immediately take measures to remedy or correct the situation, and if necessary report the violation to business owner (if a privately-held company) or representative director of the ICSP (if a corporation). · In the event the ICSP violates the Amended Network Act, the Korea Communications Commission (“KCC”) may recommend that the ICSP impose sanctions on corporate executives such as the representative director and other responsible executives in connection with such violation. Subsequently, the ICSP must notify the KCC of the action/inaction taken pursuant to receipt of the KCC recommendations. (5) Other Provisions · If a person suffers damages due to his/her personal information being stolen, lost, leaked, falsified, altered or damaged due to the ICSP’s fault, the court may award the victim punitive damages of up to three times the actual damages (Article 32(2)-(3); i.e., the “punitive damages provision”). Additionally, any proceeds that an ICSP acquires from the illegal processing of personal information may be confiscated or collected by the courts (Article 75-2). · The scope of violations that are subject to corrective measures under the Amended Network Act has been broadened to “any violation of the Amended Network Act” (Article 76(1)(xii) amended). 2. Amended PIPA (1) Notice Requirements For Certain Data Handlers Seeking To Process Personal Information Received From Third Parties (Article 20(2), (3)) · In the event a data handler who satisfies certain criteria set forth in the Presidential Decree with respect to the type and volume of personal information, number of employees, and volume of sales revenue (“Substantial Data Handler”) intends to process personal information it receives from someone other than the data subject, even though the personal information was transferred lawfully (e.g., with the data subject’s consent pursuant to Article 17(1)(i) of the PIPA), the Substantial

Data Handler must also notify the data subjects of (i) the sources from which their personal information was collected, (ii) purposes of its processing, and (iii) other required matters prior to the processing of the subject personal information. · Therefore, unlike before, to process personal information legally obtained from a source other than the data subject, certain data handlers that meet the criteria are now required to provide notice to the data subject even if the data subject does not individually request such notice. As new types of services and businesses such as big data and internet of things (“IoT”) continue to emerge, data handlers are expected to be held to higher standards with respect to their processing of personal data under the PIPA. As such, data handlers should continuously monitor any legislative developments and familiarize themselves with amendments to the Presidential Decree regarding the specific notice periods and notice methods for notifying data subjects. (2) Regular Inspections Of Data Handlers That Process Particular Identification Information (Article 24(4), (5)) · In the event a Substantial Data Handler processes particular identification information (i.e., resident registration numbers, passport numbers, driver’s license numbers, alien registration numbers), it will be subject to regular inspections by the Minister of the Interior (or a specialized institution designated by Presidential Decree) to determine whether the Substantial Data Handler has duly implemented necessary measures to ensure the security of the particular identification information. Detailed matters related to these inspections such as the scheduling of the inspections will likely be set forth in the Enforcement Decree. 3. Implications of the Amended Acts Before the Amended Acts take effect, ICSPs and data handlers would need to conduct a comprehensive review of their processing of personal information to ensure that they are in compliance with the various new provisions set forth in the Amended Acts. Some of the key changes that were made pursuant to the Amended Acts are summarized below. A. Changes to Smartphone Regulations Various smartphone app developers, operating system developers, and mobile handset manufacturers are required to establish a plan to comply with the Amended Acts – such as (first, on the part of smartphone app developers) distinction of their Necessary Authority from Optional Authority with respect to its smartphone access, having in place a process obtaining consent for the granting of the Smartphone Access Authority; and adding a process for withdrawing consent (e.g., an “opt-out” option) (on the part of operating system developers, and mobile handset manufacturers, etc.) – reasonably ahead of March 23, 2017. Not only does the Amended Network Act extend its application to smartphone operating system developers and mobile handset manufacturers (in addition to the ICSPs that were already governed by the Network Act), but it also explicitly stipulates the new


37

‘consent’ requirements regarding the Smartphone Access Authority of such developers and manufacturers. Therefore, IT companies should pay close attention to the new provisions of the Amended Network Act and compare them with the companies’ current practices to ensure compliance with the new amendments. B. Changes to Regulations Governing Cross-Border Transfers of Personal Information Following lengthy debates, the Network Act’s provisions governing the cross-border transfer of personal information have been completely overhauled to specify the instances in which consent of the data subject is required and further include a penalty provision, unlike before. These amendments are expected to have a major impact on the ICSP’s processing of personal information in practice. In addition, because the laws and regulations governing the cross-border transfer of personal information are expected to undergo a number of significant changes over the years to come, affected entities should closely monitor any related legislative developments. For your information, in August 2015, the Ministry of Government Administration and Home Affairs (subsequently renamed the Ministry of the Interior) officially announced the launch of a joint public-private sector task force with the aim of achieving “adequate” status for South Korea under the EU’s Adequacy Assessment on Personal Data Protection Levels by December 15, 2015. With the formal adoption of the General Data Protection Regulation by the EU, it seems highly likely that all EU member nations will soon operate under a unified data protection regulatory framework. Thus, if the EU subsequently determines that Korea provides an adequate level of personal data protection, the transfer of EU residents’ personal information to Korea would be greatly facilitated, thereby making it easier for certain Korean companies to expand their business to the EU. C. Increased Accountability for Entities that Process Personal Information Please note that the Amended Network Act is consistent with the recent regulatory trend for data protection and privacy in Korea, which has been towards increased accountability for the collection, use and management of personal information. Overall, heavier responsibility has been placed on ICSPs and corporate executives, Outsourced Processors are subject to more oversight, regulatory agencies are assigned greater authority, and stricter requirements are applicable to the processing of personal information (e.g., collection of only the minimum amount of personal information necessary). Therefore, data processors, including ICSPs, will need to review their personal information processing procedures and policies for compliance with the Amended Acts and make any necessary adjustments to their data processing systems.

Kwang Bae PARK Partner

Kwang Bae PARK is a partner and leader of the technology, media and telecommunications (TMT) group at Lee & Ko. He has consistently represented and advised the various telecommunications and IT companies for more than 10 years, with the focus on various issues in the field of all TMT areas, including mobile, fixed and satellite services, and regulatory issues in the internet services, such as issues on privacy, internet contents, and internet advertisement: He advised and successfully represented SKT and SK Broadband before Korea Fair Trade Commission (KFTC) and Korea Communications Commission (KCC) on serious anticompetitive risks and impacts of the KT-KTF merger upon the telecom market and telecom service users and remedies required for improvement.

Hwan Kyoung KO Partner

Hwan Kyoung KO is a partner in the Technology, Media & Telecommunications (TMT) Practice Group. He is a leading expert in the areas of telecommunication and broadcasting regulations issues, IT companies, M&A and the resolution of disputes in related markets. He also has extensive experience in representing domestic and worldwide leading IT companies in important matters involving hacking and personal data leaks. Mr. Ko acts as Advisory Counsel for the Korea Communications Commission (KCC). He has carried out editorial supervision of an IP-TV Act handbook published by the KCC, and been actively involved in their study and research group for the amendment of broadcasting regulations of Korea.


38

Economics

Differences in Consumer Price Index Inflation Based on Income Levels in 2015 On March 28, the Hyundai Research Institute (HRI) published a report on variable impacts of low prices and consumer price changes on households differing in income, composition, and age, in 2015. While the overall consumer price index (CPI) increased 0.7% in 2015, HRI determined that, due to spending patterns, it effectively increased the most for lower income senior citizens living alone. At the same time, overall CPI increased at a slower rate for everyone than in recent years.

Data Statistics Korea via HRI, Chart and Translation KBLA

Overall, prices for basic goods and services, which low income households spent a higher share of their money on, tended to increase, while prices for things which wealthier households spent higher shares on either decreased or increased less. HRI determined the CPI increased 1.1% for those in the bottom 20% of income level, compared to 0.7% unadjusted and 0.4% for the top 20%.

Data HRI, Chart and Translation KBLA

Electronic Payment Services in 2015 On March 29, the Bank of Korea (BOK) published a report on the usage and state of electronic payment services in 2015. There were 72 registered electronic financial service providers at the end of 2015, including thirteen newly registered providers, and one that lost its registration. Electronic transactions increased almost three percent yearon-year, while their value increased nearly fourteen percent. In 2015, there were an average of 19.4 million daily electronic transactions, a 2.7% year-on-year increase, valued 252.4 billion KRW, a 13.8% year-on-year increase. Transactions and transaction amounts for payment gateways, which facilitate credit card payments, increased 17.7% and 18.4% respectively.


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Housing Sales and Rent/Key Money Transactions, March 2016 On April 14, the Ministry of Land, Infrastructure, and Transport (MOLIT) released its figures on housing transactions for March 2016. At a little less than 80,000, nationwide transactions were down over thirty percent yearon-year, although up from last month. With the exception of Seoul, transactions across the country were down from the five year average, while the aggregate transactions for 1Q 2016 were down over 25% year-on-year. On the same day, MOLIT also released figures on rent and key money transactions for March. For the most part, rent and key money transactions trends indicated the inverse of housing sales trends.

There were 77,853 housing (sales) transactions in March 2016, up month-on-month, but down 30.4% year-on-year, and down 9.9% compared to the last five-year average. The only major exception appears to be Seoul, which while down significantly year-on-year, beats the five-year average. Rent and key money housing transactions for March were up slightly year-on-year, and roughly in-line with the fiveyear average. The 1Q 2016 aggregate was down slightly in the Seoul and the capital area.

Hyundai Research Institute Adjusted Macroeconomic Forecast for 2016 On April 15, the Hyundai Research Institute (HRI) published its revised forecast on macroeconomic figures for 2016. Annual GDP growth in 2016 is predicted at 2.5%, revised down 0.3 percentage points from its October 2015 forecast of 2.8% for 2016. HRI states that the down adjustment was made due to both stagnating exports, which it identifies as having a high possibility of entering an “unprecedented period of long-term stagnation,” and weakening domestic demand. HRI also identifies what it believes is a gap between the government and private sector in terms of recognizing the severity of the problem, and expresses doubts in the government’s ability to stimulate the economy.


42

Risk Management

Corporate Espionage in Korea, 2010-2014

Criminals Using Card Skimmer Steal 140 Million KRW

The Korea Institute of Criminology (KIC) recently released a report on corporate espionage from 2010 to 2014. While the arrest rate for corporate espionage incidents tends to be high, roughly three-quarters of individuals arrested for leaking company secrets are not prosecuted. China was the recipient in over half of the cases in which industrial technology was leaked overseas.

On April 21, the Seoul branch of the Korean National Police Agency (KNPA) announced that it had arrested two criminals for using cloned credit cards to steal approximately 140 million KRW from 188 individuals. The pair allegedly used credit card skimmers installed at train ticket vending machines to obtain target credit card information. Details are as follows:

In 2014, there were 111 total incidents in which individuals were arrested for leaking industrial technology. Most of those incidents featured those leaking to recipients within the country, 12 to those overseas.

Two individuals, apparently Romanian, allegedly installed credit card skimmers on automatic ticket vending machines located at unnamed train stations*. The skimmers are believed to have been in operation from May to October 2015. From February 14, 2016 to March 12, 2016, the two individuals are alleged to have used cards, cloned from the information obtained from the skimmers, to steal a total of 140 million KRW from 188 individuals over the course of 398 ATM withdrawals. Several outside sources mention Eastern European organized crime, and often specifically Romanian teams, as being particularly implicated in ATM skimming crimes. (Yonhap)(FBI)(Times of India)(ABC).

Of the 472 incidents from 2010 to 2014 in which individuals were arrested for leaking industrial technology overseas, China was the recipient country over half the time. Between 2010 and 2013, there were 2,053 discovered incidents of trade secret piracy, of which 1,850 (90.1%) led to arrests. Prosecutors declined to charge 73.2% of all individuals arrested for violation of laws relating to leaking technology from 2009 to June 2014. 2.3% were detained and brought to trial. The report attributes low rates of prosecution to companies either not being aware of what constitutes a trade secret until it is too late, or being unaware of how to protect themselves.

*Although the original report does not specify an exact location, additional reporting indicates the skimmers were installed in Seoul and Yongsan Station

Police Issue Warning Against Fraudulent Loan-Related Voice Phishing Scams On April 20, the Korean National Police Agency (KNPA) issued a warning regarding fraudulent loan-related voice phishing scams. Fraudulent loan scams were reported as the modus operandi in 80% of the 3,680 voice phishing cases reported in 1Q 2016. According to the KNPA, this reverses last year’s trend of impersonating investigatory bodies (the Financial Supervisory Service, the Prosecutor’s Office, etc.); the KNPA attributes this reversal to increased public awareness of and law enforcement focus on such scams.


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Restaurant Workers at Overseas North Korean Restaurants Allegedly Tasked with Collecting Intelligence on Foreign Customers On April 5, the Voice of America (VOA) published an interview it conducted, allegedly with an employee of a North Korean government-operated restaurant opened overseas. For security purposes, VOA states that it is unable to disclose at which location the interviewed individual worked, nor when they worked there. The location at which the employee worked supposedly earned 1,500 to 2,400 USD per month. They were tasked with furnishing 200,000 USD per year to their home government. Roughly 60-80% of earnings were estimated to have come from South Korean patrons. Workers at the restaurant were given a stipend of between 10 and 15 USD per month. Upon repatriation to North Korea (at the end of their tour), they were given a one-time payment of between 2,000 and 2,500 USD, as well as a large household appliance (television, refrigerator, etc). Employees at the restaurant had intelligence collection and reporting requirements for foreign patrons, particularly South Korea patrons with political or economic connections. The VOA report preceded the April 8 announcement by the Ministry of Unification that 13 personnel from an overseas North Korea restaurant, apparently in Ningbo, China, had defected and arrived in South Korea on April 7.

Criminals Exploit Verification Vulnerability in KB Kookmin and BC Cards On April 20, sources in the financial industry apparently reported that online criminals had apparently stolen a total of approximately 200 million KRW from KB Kookmin Card and BC Card customers over a series of 79 separate incidents by exploiting vulnerabilities unique to those card process payments. In the cases, which occurred last December, criminals would use malicious code on a target computer to extract passwords, personal, and financial information. They would then use that information to purchase department store gift certificates at online shopping malls, and then convert those gift cards to cash by purchasing low-value items. According to the report, KB Kookmin and BC Cards were affected because they use ISP services when conducting verification, whereas other card companies use “Safe Click” (안심클릭).

2015 Workplace Sexual Harassment Survey On April 5, the Ministry of Gender Equality and Family (MOGEF) published the results of its 2015 survey* on sexual harassment. 6.4% of the 7,844 individuals interviewed admitted to experiencing sexual harassment; young women irregularly employed in nonmanagement positions were the most likely to have experienced sexual harassment. Company dinners (회식) were the most common venue for harassment, and a majority of those harassed did not report. Overall, respondents were more likely to perceive that sexual harassment was much more severe in society as a whole than in their specific workplace. 6.4% of all respondents (9.6% of all female employees, and 1.8% of all male employees), admitted to experiencing sexual harassment in the workplace. Overall, young women irregularly employed in nonmanagement positions were the most likely to have experienced sexual harassment. Company dinners (회식) were the most common location for sexual harassment to occur, especially for female employees. Men were more likely to experience harassment in the workplace itself. Of the 500 that had said they had been sexually harassed, a large majority admitted to just enduring it. When asked why they just endured harassment rather than report it, most men (72.1%), said it was because they did not think it was a big deal, women (50.6%) said they did not think reporting would change anything. Respondents were much more likely to characterize sexual harassment in society as a whole as either “severe” or “very severe” (49.6%), than they were their current workplace (3.2%).


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“We need to think about failure differently. I’m

not the first to say that failure, when approached properly, can be an opportunity for growth. But the way most people interpret this assertion is that mistakes are a necessary evil. Mistakes aren’t a necessary evil. They aren’t evil at all. They are an inevitable consequence of doing something new and, as such, should be seen as valuable; without them, we’d have no originality.” - Ed Catmull Pixar


KBLA Value Chain May 2016  

The Monthly Magazine of the Korea Business Leaders Alliance, May 2016