Creative economy, where creativity is money, is achieved through an open and super-cooperative networks based on the fair industrial ecosystem. For companies as well as the nation to develop continuously, it is necessary to practice symbiosis, coexistence, and creative economy. The path can be found in win-win growth.
Creative economy is a super-cooperative economic structure in which various innovations blossom on the enormous market platform. To achieve creative economy, innovation must be integrated with the efficiency of conglomerates that gave led Korea’s development thus far. Moreover, there must be a fair and open innovation between SMEs/venture companies in charge of innovation and conglomerates in charge of the market.
This alternative can overcome the paradox of creative economy that states that efficiency and innovation cannot be accomplished by a single company. It will lead to the healthy business ecosystem that forms the essence of sustainable development. Win-win growth is the driving force for this.
In the healthy ecosystem with efficiency and innovation, the most essential element for win-win growth is fair trade. The role of the government is important here, because it is difficult to balance the bargaining power between the efficient conglomerates and the innovative SMEs/venture companies.
Even a mere child knows that conglomerates with funds and market power have more advantageous bargaining power than SMEs/venture companies. If conglomerates pursue short-term profit maximization, the ecosystem will lose its health and damage long-term national development. Fair trade, which pursues healthy development of the industrial ecosystem in the long-term view, forms the essence of economic democratization. Efficiency, innovation and fairness are the three elements of creative economy.
For creative economy to bloom, the reward for creative challenge must be attractive. Many young Americans are jumping into venture businesses because there is the M&A market in which the outcome of creative challenge is traded fairly. Look how in 2012 Facebook acquired Instagram, which only had 13 employees, for $1 billion. Young people are wild about this kind of reward. Innovation is accelerated.
But in Korea, money is given to take away people. The fascination of innovation disappears. This is why unfair invasion of sales secrets must be regulated. The bargaining power of SMEs/venture companies and conglomerates is in technological innovation and market competency. But the bargaining power of SMEs/venture companies disappears as their technologies are taken away from them.
Win-win growth must be promoted under the broad principle of the market economy. It is not desirable to take the profits of conglomerates and give them to SMEs. This is why profit sharing must be rejected. There are two hares to chase in win-win growth.
One is the required course of ‘fair trade,’ and the other is the elective course of ‘symbiosis’ that is left to the discretion of conglomerates. It is most desirable to catch both hares at once, but if the promotion of fair trade is weakened by symbiosis, the basis of win-win growth will waver.
The market economy is based on the balance of the bargaining power including market price. That is why cartel, which results in imbalance of the bargaining power, is strictly regulated. However, the bargaining power among various sizes of companies cannot form a balance fundamentally, and thus the fair trade act is adjusting the balance.
The essence of problems among conglomerates and SMEs lies in that the basic principle of the market economy, fair trade, is not being implemented properly. Therefore, as the first goal, anti-market actions must be rectified to achieve win-win growth. Nonetheless, it is a pity that the discussion on win-win growth is considered an argument to resolve consequent polarization through the dispensation of conglomerates rather than the fairness of the process. Pursuing equality of outcome may appear to be anti-market.
Sharing parts of profits from unfair trade in the name of symbiosis is not a true form of win-win growth. Symbiosis is an autonomous judgment of conglomerates. The moment a conglomerate refers to the research findings that global companies pursuing symbiosis show great performance, and intend to help SMEs by executing it forcibly, the required course of fair trade disappears. If symbiosis becomes the main agent, the entire win-win growth must depend on the sharing of conglomerates. Excessive discussion on symbiosis including profit sharing may rather become an obstacle in establishing fair trade, which is the broad principle of the market economy.
Of the two elements of win-win growth --- fair trade and symbiosis --- the issue of fair trade is a legal area that must be handled by the Fair Trade Commission. But the bigger problem is to set up a ‘global standard’ of trade that forms a ‘rational’ criterion.
This requires various evaluation indexes including the win-win growth index. The tribune index promoted by the corporate tribute department (currently ombudsman system) can be a representative example. The win-win growth index today must be more diversified. Trade among conglomerates and SMEs as well as our economy can reach the world level only if there is rational trade beyond legal terms. You can see this more easily from the way the level of Korean universities rapidly increased after the media competitively disclosed the university evaluation indexes.
In that sense, the criteria to significantly cover corporate social responsibility (CSR) such as prohibition of retaliation by conglomerates on SMEs, corporate confidentiality, and corporate internal assessment system will all be evaluated numerically. It is also necessary to importantly analyze items such as whether the company reflects exchange rates and price fluctuations of raw materials on unit costs of delivery, and whether it signs suitable maintenance and repair contracts. Win-win growth, in the end, is a precondition to securing the sustainability of the Korean creative economy.