This essay originally appeared in Korean on March 4 in Sindonga (New East Asia), Korea’s oldest monthly magazine (established 1931), as part of a monthly column, "Shin’s Reflections on Korea." Translated by Raymond Ha. A PDF version of this essay is also available to download. 

This winter, Koreans struggled with the bitter cold amidst a surge in heating costs. It has already been said many times, but climate change and the energy crisis are no longer abstract issues to be dealt with in the future. Northern California, where I live, was drenched and battered by intense storms this winter. The Midwest and the East Coast experienced brutal cold waves and heavy snow. Mount Washington in New Hampshire, close to the Canadian border, “recorded the coldest wind chill in the history of the United States” in early February at -108.4ºF.¹ Europe was spared the worst due to an unusually warm winter, but the energy crisis sparked by the Russia-Ukraine War still poses a vexing challenge.

As the world emerges from the worst of the COVID-19 pandemic, it faces a series of interrelated challenges—climate change, wars, the energy crisis, inflation, Sino-U.S. tensions, a crisis of democracy, and a crisis of political leadership. Each one of these problems is formidable on its own, but they are inextricably bound together like a Gordian knot. It is hard to know where to begin. Untangling this knot will require not only cooperation between Washington and Beijing, but also broader multilateral coordination. Simply severing the knot is not a feasible solution. Reflecting this complex state of affairs, the theme of this year’s World Economic Forum at Davos, Switzerland was “Cooperation in a Fragmented World.”

Korea cannot afford to remain a bystander to climate change. Energy security is a critical issue for Seoul, as Korea is highly dependent on energy imports. Climate change and energy security are also at the heart of the United Nations’ emphasis on sustainability, and addressing them will require international cooperation based on coherent, consistent policies at the national level. It is encouraging to note that the Yoon Suk-Yeol administration has proclaimed carbon neutrality as a policy goal while also emphasizing Korea’s energy security. These issues transcend ideological divides and party lines. They are a matter of national survival. The Yoon administration has put forth a vision of values-based diplomacy based on partnerships with liberal democracies, but it must also be more proactive in facilitating international cooperation on climate change and energy issues. There is no time to lose, and Korea’s international stature demands that it play a greater role.

When It Rains on Greenland’s Glaciers

During a recent visit to a winery in Napa Valley, I asked the owner for his thoughts about the most serious threat or challenge that the winery would face in the next 20 to 30 years. I assumed he would mention fire, given the devastating fires the region has experienced in the past few years. Without any hesitation, however, he said it was climate change. Even a one-degree Celsius increase in the temperature would necessitate a substantial change in the variety of grapes he could grow. If current trends persist, he added, Oregon or Washington will become the center of wine production on the West Coast.

There are similar changes occurring in Europe. Grape-harvesting regions are gradually moving north, with one study concluding that the United Kingdom could have the best climate for grape production in 20 years.² The UK currently has lower average temperatures and shorter summers than France or southern Europe, but this could change by 2040. According to Debbie Inglis, the director of the Cool Climate Oenology and Viticulture Institute in Canada, “a 2ºC global increase in temperature could remove 55% of wine growing regions worldwide and 4ºC could remove over 70% of these regions from production.”³

Coffee—beloved by many Koreans—will also be affected by climate change. A recent study by researchers at the University of Zürich reported that the regions suitable for coffee production “could be cut in half by 2050.”⁴ A study published by the National Academy of Sciences concluded that an increase in surface-level temperatures of 2ºC or greater could reduce coffee production in Latin America by up to 88%.⁵ In addition, the International Coffee Organization found that 70% of the land suitable for coffee production in Southeast Asia will disappear by 2050. Coffee beans, the most commonly traded item after oil, are presently cultivated in over 60 countries. If coffee production falls as a result of climate change, we may soon witness coffee rationing and even international disputes over coffee.

Climate change will disrupt every aspect of our daily lives, and the pace and intensity of this disruption only continues to grow. Fort Smith in Canada is located north of the 60th parallel and usually remains cool during the summer, but it reached nearly 104ºF in 2021, breaking an 80-year record.⁶ The Summit Station, located at the highest point of Greenland’s glaciers, saw rain for the first time in recorded history in August 2021.⁷ There were 97 tropical storms last year, including typhoons and hurricanes. Headlines about record flooding, unprecedented droughts, and extreme heatwaves are becoming a regular occurrence.

An annual global climate report published by the National Oceanic and Atmospheric Administration (NOAA) last year noted that atmospheric carbon dioxide levels in 2021 had reached the highest level “in at least the last million years.” Global surface temperatures were 0.21–0.28ºC higher than the 1991–2020 average, making 2021 one of the six warmest years since observation began in the 19th century. Moreover, 2015 to 2021 marked “the seven warmest years on record.”⁸ The latest research, utilizing artificial intelligence, concludes that temperatures will rise 1.5ºC above pre-industrial levels within the next 10 years even if action is taken to reduce emissions.⁹

In 2021, NOAA Administrator Rick Spinrad said at COP26 in Glasgow that the climate crisis “is not a challenge for future generations, but one we must confront today.”¹⁰ A few months later, he warned that “if we hope to have a prosperous society and economy tomorrow, it must begin with climate action and adaptation plans made today.”¹¹ In his opening remarks to COP27 in Sharm El-Sheikh last November, UN Secretary-General António Guterres did not hold back. “We are on a highway to climate hell with our foot still on the accelerator,” he said, observing that “the deadly impacts of climate change are here and now.”¹²

A Global Energy Crisis

The energy problem is closely tied to climate change. Around 3 billion people, or 40% of the global population, still rely on wood, coal, charcoal, and animal waste for their energy needs. These materials are some of the main culprits of climate change, as they are responsible for approximately 60% of global greenhouse gas emissions. When the United Nations announced 17 sustainable development goals (SDGs) in 2015, the question of energy was discussed extensively. For instance, goal 7, “Affordable and clean energy,” notes that increasing the use of renewable energy and reducing greenhouse gas emissions will help address climate change and foster inclusive and sustainable communities.

Despite such efforts, realizing this goal remains a distant prospect. International cooperation on clean and renewable energy is vital, but the Ukraine-Russia War has demonstrated how energy supplies can be weaponized for political purposes. This has exacerbated the energy crisis across the world. According to data from the European Commission, for instance, “in 2019 Europe relied on Russia for 41.1 percent of its gas imports, 46.7 percent of its solid fuels imports, and 26.9 percent of its crude oil imports.”¹³

In an October 2022 interview, Fatih Birol, the executive director of the International Energy Agency (IEA), noted that “in the 1970s, we had an oil crisis, but it was only oil. Now we have oil, natural gas, coal, [and] electricity.”¹⁴ The IEA was founded in 1974 by major energy consumers, including the United States, in response to price manipulation by oil producers in the Middle East. Its chief is now sounding the alarm about a wide-ranging energy crisis more serious than that of the 1970s.

Green Growth: The Lee Administration’s Lost Legacy

Korea experienced significant difficulties during the 1970s oil shock, even resorting to oil rationing. To this day, Korea’s economy suffers from a major vulnerability—it is completely dependent on oil and natural gas imports for its energy needs. Those in Korea should heed Birol’s warning. This summer, Koreans may have to deal with intense heat waves and a surge in electricity prices. If a conflict were to break out in East Asia, it could block the commercial sea lanes that are the lifeline of Korea’s economy. In such a scenario, Korea would be much more vulnerable than the EU is today following Russia’s invasion of Ukraine. It is vital to think ahead about how Korea can meet its energy requirements even if there is a geopolitical crisis in the region.

The Lee Myung-Bak administration (2008–13) was perhaps the first government to pay serious attention to climate change and the importance of the energy issue. Every administration has its successes and failures, but the Lee administration has not received due credit for its “green growth” agenda and its “resource diplomacy.” Worthy policy initiatives can run into errors as they are implemented, and such mistakes should be rectified. It is a great shame that the Lee administration’s policy vision on climate change and energy issues was not upheld by its successors. The Moon Jae-in administration even regarded resource diplomacy as a political target during its campaign to eradicate “deep-rooted evils.”¹⁵ In a welcome development, the current Yoon administration seems to be receptive to restoring the green growth agenda and resource diplomacy. That said, the question remains whether Korea could have done more on these issues in the past 10 years.

Green growth was at the heart of the Lee administration’s climate change policy. This is a concept that links and encompasses two issues: the green transition and economic growth. If a country seeks to achieve economic growth in a more environmentally friendly manner, this will give rise to new industries and technologies that are related to the environment and to the energy sector. To create jobs and find new sources of economic growth, the Lee administration sought to identify new industries and technologies with great economic potential and fuse them with existing industries. The Framework Act on Low Carbon, Green Growth was enacted in January 2010 as part of this effort.¹⁶ This law, commonly referred to as the “Green Growth Act,” was the first Korean law to address climate change. It provided the legal basis for setting emission reduction targets, and it catalyzed the Korean government’s response to climate change.

Furthermore, the Lee administration spurred international cooperation on these issues. For example, the Global Green Growth Institute (GGGI) was formed as a non-profit organization in Korea in June 2010. GGGI was then officially recognized as an international organization two years later, at the UN Conference on Sustainable Development in Rio de Janeiro. This institute, which has its headquarters in Seoul, is the first international organization that was created under Korea’s leadership. At COP21 in 2015, GGGI announced “the launch of the Inclusive Green Growth Partnership, a new collaboration with top multilateral development banks and United Nations regional economic and social commissions.”¹⁷ This partnership aimed to achieve “shared prosperity and equitable growth that creates employment and raises the income of the world’s poorest,” and “assist multilateral development banks and funds in identifying green growth opportunities and investments.”¹⁸ Major development banks, including the Asian Development Bank, the Inter-American Development Bank, and the African Development Bank, participated in this initiative.

Korea as a Resource-Poor Country

The Lee administration also expended great time and effort toward resource diplomacy. Korea is a resource-poor country, and its dependence on resource imports is the highest among OECD countries. Although it is a manufacturing powerhouse, Korea’s economy takes a hit whenever there is a spike in commodity prices. This is why the Lee administration—and its predecessors—sought to secure foreign resources. The Kim Dae-Jung administration (1998–2003) established a basic plan for developing overseas resources, and the Roh Moo-Hyun administration (2003–08) sought to grow Korea’s stake in mines in Mongolia and across Africa.¹⁹ However, the Lee administration was by far the most proactive on these issues. It worked through public sector companies to invest in and develop resources overseas. Recall, for example, that China has waged an aggressive campaign of its own to secure resources in Africa and Southern America.

Korea’s resource diplomacy fell behind in the 10 years following the Lee administration. According to the Ministry of Trade, Industry and Energy (MOTIE), there were 219 projects related to developing overseas mines in 2012. This number shrank to 94 in 2021.²⁰ In many cases, the government’s stake in overseas mines was sold at a giveaway price. As mentioned above, these projects became the target of a political campaign under the Moon administration. By its very nature, resource diplomacy is a high-risk endeavor that seeks to achieve long-term strategic goals. As a resource-poor country, Korea has no choice but to assume this risk.

To date, only the negative elements of the Lee administration’s resource diplomacy have been highlighted by the press. However, there have been major successes. The Prelude floating liquefied natural gas (LNG) platform off the Australian coast is a good example. In 2012, the Korea Gas Corporation acquired a 10% stake in this project with an investment of $1.5 billion. It began production in 2019 and was in the red until 2020, but it began to turn a profit in 2021. LNG prices have skyrocketed due to Russia’s weaponization of fossil fuels, and Korea stands to benefit greatly from this investment.²¹

Resource nationalism is emerging once again around the globe. Korea must remember its position as a resource-poor country. Although investment in overseas resources should be spearheaded by the private sector, the government should do what it can to support these initiatives with an eye toward achieving energy security. It is vital to maintain a long-term perspective, assuming appropriate risks when necessary. Once again, this is not a political nor an ideological issue.

Why Nuclear Energy Matters

“Sustainable development” and “ESG” (Environmental, Social, and Governance) are now widely known among the general public. The 70th Session of the UN General Assembly in 2015 adopted a resolution to achieve the SDGs by 2030. The SDGs articulate common goals for humanity as it seeks to achieve sustainable development for all. Under the slogan of “leave no one behind” and its five overarching themes of people, planet, prosperity, peace, and partnerships, the SDGs put forth 17 goals and 169 specific targets.²² Although the SDGs address broad issues, including poverty, food security, education, gender equality, socioeconomic inequality, and housing, they also propose specific goals for addressing these issues.

While stressing the need for highly developed countries, developing countries, and low-income countries to promote prosperity for all, the SDGs also call upon countries to protect the environment. To strengthen international cooperation on climate change, UN member states adopted the Paris Agreement at COP21 in December 2015. This agreement went into effect in November 2016. Under this accord, countries agreed to “substantially reduce global greenhouse gas emissions to limit the global temperature increase in this century to 2 degrees Celsius.”²³ The Trump administration’s decision to withdraw from the agreement represented a setback. However, by April 2018, 175 countries had signed the agreement and ten developing countries had submitted their national adaptation plans for responding to climate change. COP27, held at Sharm El-Sheikh in 2022, added the question of “loss and damage” to its official agenda. There was also an agreement to “establish new funding arrangements, as well as a dedicated fund, to assist developing countries in responding to” damages resulting from climate disasters.²⁴

Korea has been taking steps to align itself with these international developments. Though it was already far too late, Korea announced in October 2020 that it would achieve carbon neutrality by 2050. On September 24, 2021, it enacted the Framework Act on Carbon Neutrality and Green Growth for Coping with Climate Crisis.²⁵ This act codified the goal of carbon neutrality by 2050 into law. Furthermore, it established the legal procedures for setting forth a national strategy, specifying medium- to long-term emission reduction targets, and formulating and monitoring the implementation of basic plans on addressing climate change. Specifically, the law codifies Korea’s nationally determined contribution (NDC) for greenhouse gas emission reduction as 35 percent relative to 2018 levels. This law went into effect on March 25, 2022, making Korea the 14th country to codify the goal of carbon neutrality by 2050 and establish a legal framework for relevant policy implementation. It took Korea 12 years to enact an enhanced version of the Framework Act on Low Carbon, Green Growth, which went into effect in April 2010.

There is an important consideration on Korea’s journey toward carbon neutrality: nuclear energy. Although Korea should eventually phase out its nuclear power plants, carbon neutrality is virtually impossible without reliance on nuclear energy. Due to geographic factors, Korea cannot generate enough energy from renewable energy sources. Instead of phasing out nuclear power, Korea has to substantially increase its use of nuclear energy if it hopes to attain carbon neutrality.

Nonetheless, the Moon Jae-In administration abruptly pursued a nuclear phase-out policy for most of its term. It halted construction on nuclear power plants and prematurely shut down an operational power plant that had passed safety inspections. At the same time, it provided substantial subsidies for solar power installations. Shortly before leaving office, however, Moon stated on February 25, 2022, that Korea must “sufficiently utilize nuclear power plants as a major source of energy for the next 60 years.” He also urged relevant agencies to “take all necessary steps to hasten the operation” of four nuclear power plants whose construction had been delayed.²⁶ In the end, Korea lost precious time due to incoherent and ill-advised policies.

The Yoon administration is right to proclaim carbon neutrality as a policy objective and emphasize the importance of energy security. It appears that the Russia-Ukraine War and global supply chain disruptions have influenced the administration’s thinking. At a June 2022 public hearing on the new administration’s energy policies, Director-General Cheon Yeong-Gil, the MOTIE official responsible for energy transition policy, stated that “it is becoming increasingly important to pursue both carbon neutrality and energy security, as Russia’s invasion of Ukraine is becoming protracted.”²⁷ The United States, the United Kingdom, and other advanced economies are reconsidering the specifics of their energy policy, while maintaining the overarching goal of carbon neutrality. Korea must formulate a comprehensive policy that accounts for environmental concerns and energy security.

Fostering Scholarship and Leadership

Climate change and the energy crisis cannot and should not be addressed by governments alone. Academia and the private sector have important roles to play in convening groups of experts, calling upon citizens to act, and fostering international cooperation. Universities in the United States, Japan, and China are beginning to establish institutions that address climate change and energy issues. Prominent examples include Stanford’s Doerr School of Sustainability, which opened its doors last September; Tokyo University’s Center for Climate Solutions; and Tsinghua University’s Institute for Sustainable Development Goals. Several Korean universities, including Ewha Womans University and KAIST, have also taken steps in this direction. The government and the private sector should do everything they can to support these initiatives. Such institutions will prepare today’s youth to respond to the challenges posed by climate change and the energy crisis.

Korea’s companies must take a farsighted view in supporting institutions that discuss and address issues of global importance. Think tanks such as the Asan Institute for Policy Studies and the Chey Institute, both established with private support, are playing an active role in policy discussions. However, their budgets are relatively small, and they do not comprehensively engage with fundamental issues of global importance. It is hard to find Korean equivalents of the Gates Foundation or the Zuckerberg Initiative, in which a company’s founder donates a large part of their wealth toward addressing global issues—poverty, public health, education, climate change, and energy. While Samsung operates Samsung Global Research, it must do more to support research on long-term global issues in a way befitting of its status as a global company.

Moreover, Korea has Ban Ki-Moon, who oversaw the establishment of the SDGs during his tenure as UN secretary-general. He continues to actively engage with a variety of global issues abroad, but his experience and expertise are underappreciated at home. Korea can do more to play a leadership role on international issues, and climate change and energy issues present a valuable opportunity. Ban could play a meaningful role in advising, facilitating, or overseeing such efforts.

Last October, the Shorenstein Asia-Pacific Research Center partnered with the Ban Ki-Moon Foundation to launch the Trans-Pacific Sustainability Dialogue. This forum seeks to convene scientists, experts, and policy practitioners from across the Asia-Pacific for an annual discussion to identify avenues for cooperation and foster a new generation of leaders. The inaugural dialogue addressed climate change, and this year’s dialogue will be held in Seoul on the topic of energy security. It is my hope that Korea will host many such international conferences in the years to come, as a way for Korea to exercise leadership on the international stage.

Just Look Up!

A comet several miles wide is hurtling toward Earth. If nothing is done, humanity will go extinct. However, most people question or deny the existence of this comet. As the comet finally becomes visible in the sky, some begin to cry “just look up!” Anyone can look up and see the truth for themselves. Even so, others refuse to recognize this reality. They claim that this object is not a comet, and they shout “don’t look up” instead. This is the plot of the movie "Don’t Look Up," released in 2021.

The Earth will be destroyed in less than six months, but the wealthy collude with the powerful to profit from the impending extinction of humanity. They claim that the comet is full of valuable raw materials. Later on, they detonate the moon in an unsuccessful attempt to block the comet. As a means of last resort, they escape Earth to reach a faraway planet, where they die at the hands of the alien population. The vast majority of people on Earth have no choice but to hold each other’s hands and pray as they await their fate.

It cannot be emphasized enough: climate change and the energy crisis are beginning to disrupt our everyday lives in tangible ways. The truth is in front of our eyes, but we should question if we are telling ourselves to not look up. In addition, the movie reminds us of the dire consequences when politicians and the wealthy collude to pursue their narrow self-interest. There is not much time left to confront and respond to the crises that are unfolding in plain sight. Perhaps no one can undo the Gordian knot overnight, but we should—at the very least—just look up.

¹ Amanda Pitts and Michael Bartiromo, “Mt. Washington Records Coldest Wind Chill in US History,” The Hill, February 6, 2023. ↩

² Alistair Nesbitt et al., “Climate Change Projections for UK Viticulture to 2040: A Focus on Improving Suitability for Pinot Noir,” OENO One 56, no. 3 (2022). ↩

³ Clarissa Wei, “The Arctic Circle: A New Frontier for Sustainable Wine,” BBC Travel, September 1, 2022. ↩

⁴ Roman Grüter, Tim Trachsel, Patrick Laube, and Isabel Jaisli, “Expected Global Suitability of Coffee, Cashew and Avocado Due to Climate Change,” PLOS ONE, January 26, 2022. ↩

⁵ Justin Worland, “Your Morning Cup of Coffee Is in Danger. Can the Industry Adapt in Time?,” TIME, June 21, 2018. ↩

⁶ Walter Strong, “Fort Smith Had Its Hottest Day in 80 Years: Preliminary Data,” CBC News, June 30, 2021.↩

⁷ Kasha Patel, “Rain Falls at the Summit of Greenland Ice Sheet for First Time on Record,” Washington Post, August 19, 2021, https://www.washingtonpost.com/weather/2021/08/19/greenland-melt-august….↩

⁸ National Oceanic and Atmospheric Administration, “BAMS Report: Record-High Greenhouse Gases, Sea Levels in 2021,” August 31, 2022. ↩

⁹ Josie Garthwaite, “Earth Likely to Cross Critical Climate Thresholds Even if Emissions Decline, Stanford Study Finds,” Stanford University, January 30, 2023. ↩

¹⁰ National Oceanic and Atmospheric Administration, “Dr. Rick Spinrad on COP26: Climate Crisis Not a Challenge for Future, but ‘One We Must Confront Today’,” November 1, 2021. ↩

¹¹ National Oceanic and Atmospheric Administration, “Statement from NOAA Administrator Dr. Rick Spinrad on the IPCC Climate Change 2022 Impacts Report,” February 28, 2022. ↩

¹² United Nations, “Secretary-General’s Remarks to High-Level Opening of COP27,” November 7, 2022. ↩

¹³ Giulia Carbonaro, “EU has Paid Russia $16 Billion for Fossil Fuels Since Ukraine War Started,” Newsweek, March 18, 2022. ↩

¹⁴ Sandor Zsiros and Jorge Liboreiro, “‘Russia Will Lose the Energy Battle,’ Says IEA Chief Fatih Birol,” Euronews, October 29, 2022. ↩

¹⁵ Gi-Wook Shin, “In Troubled Waters: South Korea’s Democracy in Crisis,” Shorenstein APARC, May 3, 2022. ↩

¹⁶ An English translation of the law by the Korea Legislation Research Institute is available at “Framework Act on Low Carbon, Green Growth,” Korea Law Translation Center. ↩

¹⁷ Global Green Growth Institute, “New Global Initiative Launches at COP21 to Boost Green Growth Financing,” December 7, 2015. ↩

¹⁸ Global Green Growth Institute, “New Global Initiative Launches.” ↩

¹⁹ Kim Boo-Mi, “As the Global Resource Wars Resume, Will Korea Resume Resource Diplomacy?” [in Korean], Elec Times, February 19, 2022. ↩

²⁰ Jeong Ui-Jin, “The Government is Selling Overseas Mines” [in Korean], Korea Economic Daily, January 17, 2022. ↩

²¹ Jeon Joon-Beom, “The Lee Administration’s Investment Pays Off Amidst LNG Crisis” [in Korean], Chosun BIZ, August 24, 2022. ↩

²² A detailed overview of the SDGs can be found at “The 17 Goals,” United Nations Department of Social and Economic Affairs, Sustainable Development. ↩

²³ United Nations, “The Paris Agreement.” ↩

²⁴ United Nations Climate Change, “COP27 Reaches Breakthrough Agreement on New ‘Loss and Damage’ Fund for Vulnerable Countries,” November 20, 2022. ↩

²⁵ For an English translation of the law by the Korea Legislation Research Institute, see “Framework Act on Carbon Neutrality and Green Growth for Coping With Climate Crisis,” Korea Law Translation Center. ↩

²⁶ Im Hyung-Seop, “President Moon Convenes Meeting on Energy Supply” [in Korean], Yonhap News, February 25, 2022.↩

²⁷ Jeong Sang-Pil, “New Administration’s Energy Policy to Focus on Security and Carbon Neutrality” [in Korean], Energy Platform News, June 21, 2022. ↩

This essay originally appeared in Korean on January 3 in Sindonga (New East Asia), Korea’s oldest monthly magazine (established 1931), as part of a monthly column, "Shin’s Reflections on Korea." Translated by Raymond Ha. A PDF version of this essay is also available to download. 

The Indian diaspora has made its presence felt beyond the economic sector. Numerous graduates of the All India Institutes of Medical Sciences (AIIMS) practice medicine in the United States, and renowned scholars of Indian heritage serve on the faculty of elite American universities. For instance, Stanford selected Dr. Arun Majumdar to serve as the inaugural dean of the Doerr School of Sustainability, which opened its doors in the fall of 2022. Majumdar completed his undergraduate studies at IIT Bombay and obtained his PhD from UC Berkeley in 1989. His career has spanned the public and private sectors, and he now spearheads Stanford’s first new school in 70 years—an ambitious effort to “tackle urgent climate and sustainability challenges facing people and ecosystems worldwide.”[2] It would not be an exaggeration to say that the Indian diaspora now has greater influence and impact in Silicon Valley than the Chinese diaspora.

Moreover, India plays a central role in Washington’s Indo-Pacific Strategy, which has become the focal point of American foreign policy. New Delhi was the leader of the non-aligned movement during the Cold War, but it is now building closer ties with liberal democracies around the world. Unlike China, India is not locked in a strategic competition with the West. High English proficiency among Indians also facilitates relations and exchanges at all levels. It is also worth noting that there are now influential politicians of Indian heritage in major countries, including Kamala Harris in the United States and Rishi Sunak in the United Kingdom. India prides itself on being the most populous democracy in the world, and its stature in the international community is only likely to grow in the coming decades.

Despite these developments, Korean public sentiment toward India is largely negative. There is broad awareness of the legacy of historical figures like Mahatma Gandhi and cultural achievements such as the Taj Mahal. However, many Koreans still perceive India as a poor and chaotic country with rigid and obsolete customs, including the caste system. There are substantial cultural, social, and historical differences between Korea and India, but it is time for Korea to cast aside any prejudices and take a clear-eyed view of India. It is encouraging to see the Yoon Suk-Yeol administration stress in its recently announced Indo-Pacific Strategy that Korea “will advance [its] special strategic partnership with India, a leading regional partner with shared values.” The document also rightly notes the importance of “enhanced economic cooperation” between the two countries.[3]

In this context, it is especially vital for Korea to pay attention to the rise of the Indian diaspora in the United States and beyond. They are a force to be reckoned with in the global market. Unlike the state-driven development models of East Asia, India has pursued a market-driven policy since liberalizing its economy in 1991. The country’s overseas diaspora also plays a unique role in catalyzing economic growth. Korea should learn from the successes of India’s diaspora and build closer ties with such networks.

The Rise of Japan, China, and India

Japan was the undisputed leader of the Asia-Pacific in the 1980s, and China has taken on this mantle since the dawn of the 21st century. As China closes its doors amidst its intensifying strategic competition with the United States, India is emerging as the new regional leader. A close examination of the rise of these three countries reveals crucial differences. The contributions of the overseas diaspora to economic development, as noted above, are a distinguishing factor.

Let us begin with Japan. Relying on a well-educated workforce and meticulous training within companies, Japan built upon proprietary technology from the West to achieve incremental innovation. Sony’s worldwide success in consumer electronics, for example, can be attributed to sophisticated engineering and attention to detail in product design, not to significant advancements in the underlying technologies. Furthermore, Japan took great advantage of short-term overseas training programs to learn and utilize advanced technologies to further its own economy. This strategy enabled Japan to increase its economic heft without suffering a “brain drain,” to the point of challenging U.S. dominance over the global economy in the 1980s. There were, however, disputes with the United States over intellectual property rights (IPR).

Throughout this process, Japan’s diaspora did not play a visible role. Many Japanese abroad had already assimilated into their countries of residence, and the few that contributed only provided low-skilled labor. Japanese Americans, for example, have largely assimilated into American society despite the traumatic experience of forced internment during World War II. Contact with their home country was fairly limited. Some Japanese immigrants who settled in South America later returned to Japan, but most of these returnees were low-skilled laborers. After experiencing hardships and discrimination, however, they went back to South America once again after the 2008 global financial crisis.

China took a different path. The Chinese diaspora has a long history centered on Southeast Asia, and its role in enabling China’s reform and opening by providing much-needed capital is well known. In the 1980s, China adopted an “open door” policy and enabled large numbers of students to study abroad. It also proactively pursued a policy of “brain circulation” by inviting these students to return to China and contribute their talents to the country’s development. No country has sent more students abroad than China. With rapid economic growth in the 2000s, over 80% of these students returned. These individuals are called haigui (sea turtles) in China.[4] In Beijing’s Zhongguancun, China’s Silicon Valley, there are a plethora of programs and facilities tailored to haigui. They have not only spearheaded China’s technological innovation, but also made important contributions to the economy, scientific research, and higher education.

China’s pursuit of “brain circulation” has seen some success, but it also created friction with the United States. After studying and gaining work experience in the United States, Chinese talent returned home and directed their know-how toward accelerating China’s rise. However, U.S. authorities began to suspect that China’s talent policy was being misused for industrial espionage, especially in advanced technologies. For example, the Pentagon stated in 2018 that China’s Thousand Talents Program was a “toolkit for foreign technology acquisition.” U.S. intelligence officials added that the program was “a key part of multi-pronged efforts to transfer, replicate and eventually overtake U.S. military and commercial technology.”[5]

India has taken yet another path, although it resembles China’s experience in some respects. Like China, India experienced an enormous brain drain. It is second only to China in the number of overseas students. In terms of highly skilled emigration, it has seen the largest outflow of any country. Unlike Chinese talent, Indian immigrants tended to settle down in host countries, where they have built successful careers. During the 1980s, over a third (37.5%) of IIT Bombay graduates went abroad, and 82% of these individuals stayed abroad.[6] Between 2004 and 2016, 30% of grantees in Optional Practical Training (OPT), a temporary employment visa for F-1 students in the United States, were students from India.[7] Many of these students arrived in America after receiving a rigorous education in STEM or medicine in India. Their native fluency in English is also an important asset. Since India itself is extremely diverse in terms of religion, ethnicity, and culture, prior experience with diverse settings also gives Indian students an advantage for studying and living in America.

Even if Indian talent mostly stays abroad, they create “brain linkages” through extensive interaction with their home country. They bring young talent from India to overseas universities and companies, support start-up entrepreneurs in India, and connect global companies to India’s low-cost, high-quality workforce.

Immigrants from India make up the bulk of H-1B visa recipients in the United States. In fiscal year 2021, 74% consisted of Indian nationals.[8] Unicorn companies formed with diaspora support are appearing left and right in Bangalore, the hub for India’s high-tech industry. The total investment in Bangalore’s tech sector has jumped from $550 million in 2010 to $2 billion in 2017, spread across 6,000 start-ups.[9] This amount is projected to reach $30 billion by 2025.[10] Furthermore, unlike China, India is not currently engaged in disputes with the United States or other major economies over talent policy or IPR in advanced technologies.

Modi’s Visit to Silicon Valley

In 2015, India’s Prime Minister Narendra Modi spoke to a crowd of 20,000 at the Shark Tank in San Jose. Many in the diaspora community gathered for the occasion. Modi asserted that “what looks like brain drain is actually a brain deposit.”[11] He also met with leaders of the Indian diaspora during his visit, including Sundar Pichai (Google) and Satya Nadella (Microsoft), and secured support for the government’s “Digital India” initiative.[12] Naren Gupta, a member of India’s diaspora and the co-founder of Nexus Venture Partners, played an instrumental role in planning the visit. Modi’s tour of Silicon Valley encapsulated the power and influence of the Indian diaspora in America. It also revealed the strength of the brain linkages that the community had built with its home country.

The Indian diaspora is a force to be reckoned with in Silicon Valley. Of all engineering and tech start-ups formed in America by immigrants between 2006 and 2012, 33.2% were created by individuals of Indian origin.[13]This exceeds the total number of companies created by entrepreneurs from China, the United Kingdom, Canada, Germany, Israel, Russia, and Korea combined. Indian immigrants are also filling executive-level positions in major American IT companies. Those of Indian origin make up “just about 1% of the U.S. population and 6% of Silicon Valley’s workforce.”[14] However, they have an outsized impact. Immigrants from India to the United States tend to be highly educated, with over 70% possessing at least a bachelor’s degree.[15] This is markedly higher than the corresponding proportion for the U.S. population, which reached 37.9% in 2021.[16] Various factors help explain the Indian diaspora’s success in the United States: high levels of technical competence, a robust professional network, and strong communication skills based on native English fluency and familiarity with Western culture.

Moreover, Indian immigrants are very much willing to acquire citizenship in their host countries. In recent years, the number of Indian nationals who acquired U.S. citizenship through naturalization has been almost twice the number of Chinese nationals who were naturalized.[17] Indians reportedly do not have qualms about renouncing their Indian citizenship. Modi’s 2015 speech in San Jose, referenced above, clearly reflects how those in India view the overseas diaspora. Regardless of one’s citizenship or place of residence, there is a prevailing mentality of “once an Indian, always an Indian.” Leaders in India’s modern history, including Nehru and Gandhi, were also members of the diaspora. The tightly knit diaspora community gives rise to robust and mutually supportive professional networks, which helps elevate the presence of Indian immigrants in host countries. This is certainly the case in the United States.

Unlike China, India does not have a government-led policy to attract talent. Nevertheless, members of the overseas diaspora can temporarily return to India and engage in various activities with relative ease. There are also institutions that facilitate such endeavors. One is the legal status of “non-resident Indians” that is given to Indians who reside overseas for over 183 days in a given year. This status accords short-term diaspora visitors with legal and economic rights similar to that of resident citizens.

Since 2003, the Indian government has also officially recognized Non-Resident Indian Day (Pravasi Bharatiya Divas) on January 9, which commemorates the day of Gandhi’s return from South Africa to Mumbai in 1915. To mark the occasion, the Indian government presents an award to individuals in the diaspora community who have made significant achievements in their respective fields. Past recipients include Satya Nadella and Kalpana Chawla, an Indian American astronaut who posthumously received the award as the first person of Indian origin to go to space. By taking such steps, the Indian government promotes and strengthens solidarity between India and its diaspora, no matter where its members reside.

The New Argonauts

Members of the Indian diaspora are actively building ties to their home country. In 2021, they sent $87 billion in remittances to India. China’s diaspora came second with $53 billion.[18] This includes money earned by Indian immigrants in the United States, China, and other countries. Overseas Indians in the business sector not only invest in start-ups and real estate in India, but also give policy recommendations to their home government and provide support for higher education. They also organized charity fundraisers to assist COVID-19 response and recovery efforts, responding to the devastation that the pandemic wreaked across the country. According to my own analysis, 42% of 97 major Indian diaspora organizations in the United States maintain close ties with India. As a whole, they are even more active than Chinese diaspora organizations.

The IndUS Entrepreneurs (TiE), founded in Silicon Valley, is one of the best examples. It was established in 1992 with the goal of facilitating networking between entrepreneurs from South Asia, providing mentoring for the next generation, and incubating and investing in start-ups. As of 2020, TiE had 61 branches across 14 countries, with 20 offices in the United States and 23 in India, and boasted a membership of 15,000. To date, it has supported around 10,000 start-ups founded by entrepreneurs of Indian origin. The total valuation of these start-ups is approximately $200 billion. With offices in Mumbai, Bangalore, and Chennai, TiE has acted as a conduit for successful Indian businesspeople in Silicon Valley to interact with their home country. These individuals emphasized the importance of entrepreneurship to youth in India. They acted as role models, mentors, and investors at a time when there was little support to be found elsewhere. TiE continues to serve as a vital link between Silicon Valley and India.

The American Association of Physicians of Indian Origin (AAPI), founded in 1982, plays an essential role in creating brain linkages in the field of medicine. AAPI has 80,000 doctors and 40,000 students, residents, and fellows as members. It fosters closer ties between its members and pursues opportunities for cooperation with Indian medical schools. Since 2007, it has hosted an annual global healthcare summit in India. AAPI also operates 19 clinics across India and established a charitable foundation to provide medical relief. During the height of COVID-19, AAPI sent medical supplies and held various activities to help India overcome the pandemic. It is said that those in the diaspora community view such actions as a responsibility, not just as a charitable activity.

Furthermore, the Indian diaspora is heavily engaged in supporting higher education back home. Consider IIT Kharagpur, which opened its doors in 1951. Vinod Gupta graduated from this school, found success in the United States, and helped launch the Vinod Gupta School of Management at his alma mater in 1993. Arjun Malhotra, another IIT Kharagpur graduate, was involved in the creation of the G. S. Sanyal School of Telecommunications and the M. N. Faruqui Innovation Centre. In another example, leaders from the diaspora community joined forces in 2014 to establish Ashoka University, a private school modeled after American liberal arts colleges, a rarity in a higher education landscape dominated by public universities. Ashok Trivedi, one of the school’s founders, earned his bachelor’s and master’s at the University of Delhi before pursuing an MBA at Ohio University and subsequently co-founding IGATE, an IT services company. As these cases illustrate, leaders in the Indian diaspora community donate to their alma maters and even create new schools altogether. They also facilitate academic exchanges between prominent U.S. and Indian universities, including student exchange programs.

AnnaLee Saxenian, a professor at UC Berkeley’s School of Information, has referred to these immigrant entrepreneurs who maintain ties with their home country after building successful careers overseas as the “new argonauts.” Just like the Argonauts of Greek mythology who set sail across the Mediterranean in search of the Golden Fleece, these individuals have crossed oceans aboard their own Argo to seek success in the 21st century. Kanwal Rekhi emphasized to me that “the diaspora led India’s independence movement in the past, but now it is playing an important role for India’s economy.”

Will India Surpass China?

In a previous essay in this series, I argued that “China will not surpass the United States in our time.”[19] We could ask, in a similar fashion, whether India could overtake China in the future. While there are significant challenges on the road ahead, India could become a formidable competitor for China if current trends continue. At present, India lags far behind China in terms of overall national power. India has a much younger population, however, and its rate of economic growth will likely exceed China’s for the foreseeable future. India is the only country where the supply of highly skilled labor in the technology sector exceeds domestic demand. In addition to IITs and AIIMS, there are excellent engineering and medical schools across all regions of India. These institutions are an important source of talent for the global economy.

China is gradually closing its doors as the Sino-U.S. competition intensifies. In terms of its economy and trade relations, it is at risk of falling into a quagmire similar to Japan’s “Two Lost Decades.” Beijing must also contend with strong anti-China sentiment, especially among developed countries, and it must overcome the challenges that come with diplomatic isolation. India does not face the same geopolitical risks. As one of the four corners of the Quad, New Delhi is pursuing a foreign policy that includes various forms of cooperation with countries across the Indo-Pacific region in both economic and security issues. At the same time, the power and influence of the Indian diaspora only continues to grow. In an October 2022 op-ed on the subject, Tyler Cowen notes that Rishi Sunak is only one example of a much wider phenomenon. “It is now impossible to deny what has been evident for some while,” he says. “Indian talent is revolutionizing the Western world far more than had been expected 10 or 15 years ago.”[20]

To be sure, India faces a complex set of challenges at home. Poverty remains widespread, along with ethnic and religious conflicts. The Modi government has taken an authoritarian turn in its pursuit of Hindu nationalism, and there are serious governance challenges associated with corruption in both government and the private sector. Ajantha Subramanian, a professor of anthropology at Harvard, has pointed out that successful members of the Indian diaspora in Silicon Valley largely come from the upper castes. Some criticize these individuals for amplifying caste-based inequality overseas through their exclusive professional networks in ways that are no longer as prevalent in India. While accounting for such criticism and taking an honest look at India’s domestic issues, it would also be unwise for Korea to discount the importance of India and its diaspora in the coming decades.

To Become Asia’s Small Giant

A few years ago, I gave a lecture on Korea’s development at a leading university in New Delhi. I was deeply impressed by the passion and enthusiasm of the students who came to listen. There is growing interest in India about the story of Korea’s remarkable economic development, as well as K-pop and Korean dramas. Unfortunately, this has not always been reciprocated. In 2017, a bar in Itaewon, an area of Seoul famous for its multicultural atmosphere, drew controversy when it denied entry to a student from India.[21] In 2009, in another incident, an Indian research professor and a female Korean companion were harassed by a fellow bus passenger.[22] Such inexcusable acts of discrimination are ultimately rooted in prejudices and negative stereotypes about India in Korea.

I once had the opportunity to speak to Indian engineers who work in Korea. They told me that while they enjoyed working for Korean companies such as Samsung or SK, prejudice among Koreans toward India often made life difficult.[23] Building closer ties with India is a foreign policy imperative under the Yoon administration’s Indo-Pacific Strategy, but high-level policies alone will not be enough. It is vital for civil society to enhance mutual understanding between Korea and India by expanding cultural exchanges and strengthening people-to-people ties. The private sector also has an important role to play, as they can augment efforts by government-run Korean cultural centers and public entities such as the Korea Foundation.[24]

Indian talent could play an important role in Korea’s economic future. Korea will soon face significant labor shortages due to “a crisis on three fronts: a plummeting birth rate, an aging population, and a serious brain drain.”[25]On the other hand, India has a relatively young population and a large, highly skilled workforce. According to one estimate, “India is projected to have a skilled-labour surplus of around 245.3 million workers by 2030.”[26] There is also a natural synergy between the two economies. India excels in software, whereas Korea’s strength lies in hardware. If China provided opportunities for Korean manufacturers to export intermediate goods, India could provide the talent that Korea’s economy will increasingly rely on in the coming years.

Cowen argues that “India is by far the world’s most significant source of undiscovered and undervalued talent.” Anyone who is concerned about “the future of their own nation” in today’s world, he adds, “really should be focusing on India.”[27] Korea would do well to heed his advice.

While seeking ways to strengthen cooperation with India, Korea should also strive to build closer ties with the Indian diaspora and its networks. East Asian countries, including Korea, adopted a state-centered model of economic development. India took a different path, and its overseas diaspora has played a unique role in driving India’s economic growth. The ever-increasing influence of India’s new argonauts extends beyond Silicon Valley. Australia and Germany have sought to attract Indian talents and draw on their professional networks. The same goes for countries in the Middle East, including the United Arab Emirates. Korea could form closer partnerships with the extensive global networks of India’s diaspora community as it seeks to attract Indian talent and pursue new economic opportunities.

During the Cold War, Korea looked east toward the United States and Japan. As the Iron Curtain fell in the 1980s, Korea pursued Nordpolitik by normalizing ties with Moscow and Beijing. It is now time for Korea to look south. Even as Southeast Asia grows in importance, Korea must keep its eyes fixed on India. If Korea aims to become Asia’s small giant in this turbulent era, it would be wise for Seoul to use prevailing geopolitical currents to its favor.

[1]This essay draws on ongoing research by the author, which will be published in an upcoming book tentatively titled Talent Giants in the Asia-Pacific Century: A Comparative Analysis of Japan, Australia, China, and India.

[2] Amy Adams and Anneke Cole, “Stanford Doerr School of Sustainability, University’s First New School in 70 Years, Will Accelerate Solutions to Global Climate Crisis,” Stanford University, May 4, 2022, https://news.stanford.edu/2022/05/04/stanford-doerr-school-sustainability-universitys-first-new-school-70-years-will-accelerate-solutions-global-climate-crisis/.

[3] Republic of Korea Ministry of Foreign Affairs, Strategy for a Free, Peaceful, and Prosperous Indo-Pacific Region, December 28, 2022, 17, https://www.mofa.go.kr/eng/brd/m_5676/view.do?seq=322133.

[4] The terms “sea turtle” (海龟) and “return from overseas” (海归) are homophones for each other.

[5] Anthony Capaccio, “U.S. Faces ‘Unprecedented Threat’ from China on Tech Takeover,” Bloomberg, June 22, 2018, https://www.bloomberg.com/news/articles/2018-06-22/china-s-thousand-talents-called-key-in-seizing-u-s-expertise.

[6] S. P. Sukhatme and I. Mahadevan, Pilot Study on Magnitude and Nature of the Brain-Drain of Graduates of the Indian Institute of Technology, Bombay (Bombay: Indian Institute of Technology, 1987).

[7] Neil G. Ruiz and Abby Budiman, “Number of Foreign College Students Staying and Working in U.S. After Graduation Surges,” Pew Research Center, May 10, 2018, https://www.pewresearch.org/global/2018/05/10/number-of-foreign-college-students-staying-and-working-in-u-s-after-graduation-surges/.

[8] Lubna Kably, “Indians Bagged 3.01 Lakh H-1B Visas During Fiscal 2021–74% of the Total,” Times of India, April 14, 2022, https://timesofindia.indiatimes.com/world/us/indians-bagged-3-01-lakh-h-1b-visas-during-fiscal-2021-74-of-the-total/articleshow/90845244.cms.

[9] Indian Tech Start-Up Ecosystem: Approaching Escape Velocity (Noida: NASSCOM-Zinnov, 2018), 6; Manish Singh, “Indian Tech Startups Raised a Record$14.5B in 2019,” TechCrunch, December 30, 2019, https://techcrunch.com/2019/12/29/indian-tech-startups-funding-amount-2019/.

[10] “HNIs to Invest $30 Billion in Indian Tech Startups By 2025: Report,” Economic Times, June 17, 2021, https://economictimes.indiatimes.com/tech/startups/hnis-to-invest-30-billion-in-indian-tech-startups-by-2025-report/articleshow/83607846.cms.

[11] “Narendra Modi’s Speech at the Shark Tank, Silicon Valley As It Happened,” Wall Street Journal, September 27, 2015, https://www.wsj.com/articles/BL-IRTB-30506.

[12] Chidanand Rajghatta, “Silicon Valley Stars Sign on to PM Modi’s ‘Digital India’ Vision,” Times of India, September 27, 2015, https://timesofindia.indiatimes.com/tech-news/silicon-valley-stars-sign-on-to-pm-modis-digital-india-vision/articleshow/49129060.cms.

[13] Vivek Wadhwa, AnnaLee Saxenian, and F. Daniel Siciliano, Then and Now: America’s New Immigrant Entrepreneurs, Part VII (Ewing Marion Kauffman Foundation, 2012), 3, https://www.kauffman.org/wp-content/uploads/2019/12/Then_and_now_americas_new_immigrant_entrepreneurs.pdf.

[14] Nikhil Inamdar and Aparna Alluri, “Parag Agrawal: Why Indian-born CEOs dominate Silicon Valley,” BBC News, December 4, 2021, https://www.bbc.com/news/world-asia-india-59457015.

[15] Jens Manuel Krogstad and Jynnah Radford, “Education Levels of U.S. Immigrants Are on the Rise,” Pew Research Center, September 14, 2018, https://www.pewresearch.org/fact-tank/2018/09/14/education-levels-of-u-s-immigrants-are-on-the-rise/.

[16] United States Census Bureau, “Census Bureau Releases New Education Attainment Data,” February 24, 2022, https://www.census.gov/newsroom/press-releases/2022/educational-attainment.html.

[17] U.S. Department of Homeland Security, 2020 Yearbook of Immigration Statistics (Washington, D.C.: U.S. Department of Homeland Security, Office of Immigration Statistics, 2022), 53–54, https://www.dhs.gov/immigration-statistics/yearbook/2020.

[18] “With $87 Billion, India Top Remittance Recipient in 2021: UN Report,” Economic Times, July 20, 2022, https://economictimes.indiatimes.com/nri/invest/with-87-billion-india-top-remittance-recipient-in-2021-un-report/articleshow/93012012.cms.

[19] Gi-Wook Shin, “Walking a Tightrope,” Shorenstein APARC, November 16, 2022, https://aparc.fsi.stanford.edu/korea/news/walking-tightrope.

[20] Tyler Cowen, “Rishi Sunak Shows the Growing Influence of Indian Talent in the West,” Bloomberg, October 28, 2022, https://www.bloomberg.com/opinion/articles/2022-10-28/rishi-sunak-shows-growing-influence-of-indian-talent-in-west.

[21] Ock Hyun-ju, “Itaewon Bar Accused of Discriminating Against Indian,” Korean Herald, June 7, 2017, https://www.koreaherald.com/view.php?ud=20170607000796.

[22] Park Si-soo, “Indian Accuses Korean of Racial Discrimination,” Korea Times, August 3, 2009, http://www.koreatimes.co.kr/www/news/nation/2009/08/117_49537.html; Paul Kerry and Matthew Lamers, “Setting a Precedent on Racism,” Korea Herald, March 30, 2010, https://www.koreaherald.com/view.php?ud=20091106000044.

[23] Gi-Wook Shin and Joon Nak Choi, Global Talent: Skilled Labor as Social Capital in Korea (Stanford University Press, 2015).

[24] For more information about the Korea Foundation, see the organization’s “About Us” page at https://www.kf.or.kr/kfEng/cm/cntnts/cntntsView2.do?mi=2126.

[25] Gi-Wook Shin, “Demographic Headwinds,” Shorenstein APARC, December 15, 2022, https://aparc.fsi.stanford.edu/news/demographic-headwinds.

[26] “India to Have Talent Surplus of 245 Million Workers by 2030: Study,” Economic Times, May 7, 2018, https://economictimes.indiatimes.com/news/economy/indicators/india-to-have-talent-surplus-of-245-million-workers-by-2030-study/articleshow/64064096.cms.

[27] Cowen, “Rishi Sunak Shows the Growing Influence of Indian Talent in the West.”

This article originally appeared in the Korean daily newspaper Munhwa Ilbo on January 2, 2023. It was translated from Korean by Raymond Ha.

In an exclusive interview for the Munhwa Ilbo, Stanford University professors Gi-Wook Shin and Francis Fukuyama had a conversation on a wide range of topics including the war in Ukraine, U.S.-China competition, and North Korea policy.

The world faces a crisis of political leadership as each country pursues its own interests. Fukuyama stressed the importance of robust international institutions, instead of relying solely on great leaders. He pointed to NATO and the U.S.-Korea alliance as examples of institutions that uphold the liberal international order. In terms of the U.S.-China competition, he said without hesitation that “a democracy like Korea…has to make the decision that it is going to be on the side of democracy.” Fukuyama also noted that in the event of an armed confrontation over Taiwan, Korea would almost certainly be pulled in, given the significant U.S. military presence there. He was skeptical about prospects for progress over North Korea, pointing to the long history of failed negotiations and the lack of viable alternatives. “Not every problem has a solution,” he said.

Gi-Wook Shin, who led the interview, observed that the global decline of democracy appears to have hit a turning point, “although it’s too early to say if there will be a rapid recovery…or a more gradual shift.” As for the state of democracy in the United States, he said, “We will have to wait and see what happens in the 2024 presidential election.” Even though Trump’s political influence may be weaker, he observed, “pro-Trump forces are still part of the system.” In terms of Korea’s foreign policy, Shin emphasized that Seoul “should take [the Taiwan] problem much more seriously.” A crisis in the Taiwan Strait “could become the biggest challenge for the Yoon administration’s foreign policy, not North Korea,” and domestic polarization over China policy is one issue that could threaten to “become extremely controversial.”

The interview was held in-person for one hour at Stanford on December 8, 2022, with a follow-up interview held over the phone on December 27.  

[Gi-Wook Shin] Let’s start by looking back on 2022. How would you summarize this year?

[Francis Fukuyama] I think 2022 was a very good year, where we may have bottomed out in this global move away from democracy and toward authoritarian government. The year really started out in February with the Russian invasion of Ukraine, which looked very, very threatening. China was on a roll. It looked like they were beating everybody in terms of COVID policy. Then, by the end of the year, the Russians got completely bogged down. China experienced mass protests, and there were protests also in Iran. In America’s elections on November 8, all the pro-Trump forces failed to make gains and, in fact, lost almost everywhere. I think that maybe we will look back on 2022 as the year when this democratic recession that has been going on for over 15 years finally bottomed out.

[GWS] I agree, although it’s too early to say if there will be a rapid recovery toward democracy or a more gradual shift. In the United States, we will have to wait and see what happens in the 2024 presidential election. Former President Trump may be weaker politically, but pro-Trump forces are still part of the system. As for the Ukraine war, many people thought Russia would win quite easily, but now it looks like they are struggling. It’s a big question, of course, but how do you think the war will be remembered in history?

[FF] I think that it is going to be remembered as one of the biggest strategic mistakes made by a great-power leader in a very long time. I think that the mistake is directly due to the nature of the political system. You remember that Vladimir Putin was sitting at the end of this 25-foot table with his defense minister because he was so afraid of COVID. He was extremely isolated during the whole pandemic, and he had already isolated himself in a political system where he doesn’t face checks and balances. That kind of decision-making system makes you prone to make even bigger mistakes, because you don’t have other people to test your ideas against. He was completely uninformed about the degree to which Ukraine had developed a separate national identity and that the Ukrainian people were willing to fight for it. He didn’t have any idea how incompetent his own army was. If he had been in a more democratic country that required him to share power with other people, I don’t think he could have made that kind of mistake.

[GWS] Putin is struggling, as you said. There are a lot of problems in China, but Xi Jinping secured a third term. Authoritarian leaders elsewhere still hold power. By contrast, I don’t think President Biden has shown powerful leadership at home or globally. I don’t see any strong political leaders in the U.K., France, or Germany either.

[FF] I think that although Xi Jinping may succeed in stabilizing the situation in China with the protests over COVID in the short run, he is in a lot of trouble. He was creating all this social instability with the zero-COVID policy. Now that they’ve started to relax it, I think the number of cases and deaths is going to go up very dramatically, but I don’t think they’ve got much of a choice. I think this has probably damaged the people’s sense of Xi’s authority and legitimacy, and I’m not sure he can recover from that.

The most important thing is the breakdown of the Chinese economic model. For the past decade, the Chinese model has been to pump a huge amount of money into the real estate sector. That model is collapsing. The other big problem is that they don’t have economic growth anymore. Some economists think that they’re actually in a recession, with negative growth. This is like what Japan went through in the 1990s. So much of the Chinese government’s legitimacy has been based on having extremely high growth rates, and that period is over. I don’t see how they get it back, and they certainly won’t by inserting the state into every economic decision and controlling their high-tech sector. Their population is shrinking now. I’m not sure that Xi Jinping, in the longer run, is actually going to look like a very effective leader.

[GWS] But in the short term, say the next three to five years, won’t authoritarian leaders be powerful in comparison? Just as “America First” shows, some say there is a crisis of political leadership among Western democracies, including the United States, the United Kingdom, France, and Germany.

[FF] I think that apart from President Zelenskyy in Ukraine, we don’t see any really inspiring leaders in Germany or France or the United States. On the other hand, the nice thing about democracy is that it’s an institutional system for managing change. Biden has turned 80, and Trump himself is in his upper 70s. The leadership in Congress and the Democratic Party are all elderly, but they’re all about to change. In the next election cycle, there is going to be a whole new generation of people that are up-and-coming. I don’t think you need a charismatic leader with great vision, necessarily, to run any of the countries you mentioned.

[GWS] Another question is if the United States can provide global leadership. When Trump was defeated, there was a strong expectation for the Biden administration to restore global order and to do much better than its predecessor. I’m not sure whether that’s happening.

[FF] Again, I think that’s why you want to have international institutions rather than being dependent simply on leaders. This gives an institutional basis for continuity in policy. There are all of these alliance structures, like NATO. People thought that NATO was obsolete and was going to go away. It has actually proved to be very durable. The United States has security ties with Korea and Japan that also are quite old, but they’re still durable. It’s interesting that the authoritarian countries have not been able to create anything comparable to that set of alliances. There is the Shanghai Cooperation Organization (SCO), but all the Central Asian states don’t want to be part of this China-Russia dominated organization. We can’t just depend on great leadership.

[GWS] To add on to that, I think Korea should proactively participate in upholding and creating an international order that facilitates a resurgence of democracy. Korea has not really played this role before, but with the 10th largest economy in the world, it is now in a position to play a positive role.

[FF] There is a set of values that underpin America’s alliances, both in Asia and Europe. Throughout the whole Cold War, the Soviet Union never actually invaded a Western democracy, but that’s what Russia did. NATO has suddenly become very relevant once more. I think that both in Korea and Japan, there is also recognition of a comparable challenge from an authoritarian China. Unless all democracies work together and show solidarity with one another, they could be picked off by these two authoritarian powers.

[GWS] There is a lot of debate about whether China is going to invade Taiwan or not. I have a two-part question. First, could the situation in Ukraine reduce the possibility of China invading Taiwan? Second, if China still invades nevertheless, what should Korea do? This is a difficult question for Korea. It cannot say no to the United States as a military ally, but at the same time, it cannot antagonize China. I think this is the most difficult question for Korea at the moment.

[FF] This is a difficult question for the United States because it’s not clear that Congress or the American people actually want to go to war with China in order to save Taiwan. I think if you ask them a polling question stated like that, probably a majority would say, “No, we’re not going to send our troops to die.” But I think it’s likely that the United States will get dragged into such a conflict one way or the other. Among other things, the Chinese would probably have to preempt some of the American forces that are in the theater. American military personnel will get killed as the Chinese attack unfolds, and I think there will be a lot of political pressure to help Taiwan.

[GWS] How much can the United States be involved? Some in Korea are skeptical that Washington will step in.

[FF] This is really the problem. During the Cold War, we had a good idea of what a war would like look like if it actually happened. The military planning was very concretely designed against certain types of escalation. With China, we don’t have a clear set of expectations for what escalation would look like. It could just start with a Chinese invasion. It could start with a blockade. It could start with something in the South China Sea. It could actually start on the Korean Peninsula, with North Korea doing something. If it happens, it’s going to be much more devastating than the war in Ukraine. So much of global production comes out of Asia, and there’s a strong incentive not to let things get out of hand. Whether we have the wisdom to do that is not clear. I also think that people’s expectations and opinions will change once the conflict begins. The moment people see cities being bombed, they will change their minds.

[GWS] I also think that a conflict over Taiwan would affect the American people more directly than what is happening in Ukraine. What’s your view on how seriously Korea should be taking this possibility?

[FF] It is likely enough that it is absolutely important for everyone to take it seriously and plan against it. What you want to do is deter China from taking any military action against Taiwan. They’re not going to be deterred unless they see that there’s a response on the other side that is going to raise the cost for them. That’s not going to happen unless people take the scenarios seriously and start thinking about concrete ways that they could help Taiwan or stymie any kind of Chinese attack. I think it is very important for Korea to think this through and think about ways they could support Taiwan and be part of a larger alliance that can push back against China.

[GWS] I keep telling my friends and colleagues in Korea that they should take this problem much more seriously. Taiwan could become the biggest challenge for the Yoon administration’s foreign policy, not North Korea. China policy has become an extremely divisive partisan issue in South Korea, and it could tear the country apart. What advice would you have for President Yoon?

[FF] There’s two things. First is the rhetorical position. Korea should make its position clear in advance that it would oppose Chinese military action and would support the United States, for example. Korea is going to get dragged into this because so much U.S. military equipment is in Korea, and that is going to be moved in closer to the theater. I think making that position clear in advance is important.

The other thing that’s been very clear from the Ukraine war is that democracies are not prepared for an extended conflict. Everybody is running out of ammunition in Europe and the United States is running low on certain types of ammunition. The Ukrainians have used so much of it just in the 10 months they have been fighting. I think that any high-intensity conflict in East Asia is also going to be very costly in terms of supplies. South Korea is in a better position than other countries because it has been preparing for a North Korean attack for decades. Everybody needs to be prepared for an extended conflict. It may not be over in 48 hours.

[GWS] Koreans are quite nervously watching the ongoing escalation of tensions between the United States and China. In the past, the paradigm was “United States for security, China for the economy” (an-mi-gyeong-joong). Now, security and the economy are linked together. The Yoon government is promoting the strengthening of the alliance with the United States, but South Korea faces the fundamental problem of how to position itself as U.S.-China tensions escalate. Do you have any wisdom for Korea?

[FF] I don’t know if it’s wisdom, but I think Korea needs to take a clearer position. Under the previous government, there was a belief that Korea could somehow be halfway between China and the United States. That’s just not a tenable position. The tension between the United States and China has really been driven by China ever since 2013, when Xi Jinping took power. China has become a much more severe dictatorship internally, and it has become much more aggressive externally. You see the influence of the Belt and Road Initiative and the militarization of the South China Sea. In the last 10 or 15 years, China has been picking fights with India, Japan, Korea, and all of Southeast Asia over territorial issues. They built the size of their military much more rapidly than any other great power in that period of time. As a result, the United States and other countries have simply reacted to this. I think that a democracy like Korea cannot pretend that it is somehow in between the United States and China. It has to make the decision that it is going to be on the side of democracy.

[GWS] I agree that an-mi-gyeong-joong is now obsolete, but I think that South Korea must be more sophisticated in its response. As they say, the devil is in the details. On the economy, Seoul can actively work with Washington on areas closely related to security, but it can still partner with Beijing on sectors that are not. There can be a fine-tuned policy.

I now want to ask about North Korea and U.S. policy. I have been saying that the Biden administration policy is one of “strategic neglect,” not the “strategic patience” of the Obama administration. Kim Jong-un keeps testing missiles and provoking, and South Koreans are puzzled by the lack of response from Washington. Why is that? Is it because all the attention is on Ukraine and China?

[FF] Not every problem has a solution, and I don’t think this problem has a solution. You could use diplomacy. You could use military force. You could use deterrence. There are a limited number of possible approaches, and I think none of them are going to work. There has been a long history of negotiation. That has not worked. I think confrontation is not going to work. I think preemption is certainly not going to work. I just don’t think there’s a good solution, so we’ve ended up with trying to ignore the problem by default. Part of the reason North Korea is launching all of these missiles is that they want people to pay attention to them. Ignoring the problem is not much of a solution either, but it’s not as if there is a better solution.

[GWS] I agree with you that for many people in government, North Korea has been a hot potato. You don’t want to touch it because there is no clear solution, and it won’t help your career. But if we just ignore the problem, then five years later it’s going to be worse. What kind of North Korea are we going to face in five or ten years?

[FF] Everybody has been hoping that something would happen internally. It’s fine to think that, but it’s also not taking place. That said, Kim Jong-un is obese and unhealthy. Who knows what might happen?

[GWS] Let’s now turn to domestic politics here in the United States. I think many Americans were relieved by what happened in the midterm elections last month. Trump’s influence was much more limited than what people thought. But he’s still there, and he’s likely to run again. I think he is still a strong candidate for the Republicans.

[FF] He declared his candidacy, but I think that he is declining very rapidly in influence. We have had four elections now where he was playing a major role in the Republican Party. In three of those elections, he really hurt his own party. He can stir up a third of the electorate that loves him, but it’s never enough to win an election, especially in a swing state. I think he’s gotten crazier in recent months. He is doing so many self-destructive things, having dinner with neo-Nazis and repeating all these conspiracy theories. These are things that no rational candidate would do. The Republicans are going to want somebody that can actually beat the Democrats, and I don’t think it’s going to be him.

[GWS] You don’t expect a rematch between Biden and Trump in 2024?

[FF] This gets into a technical issue, but the Republican primaries are mostly winner-take-all primaries. Any candidate that can get 30% of the vote is likely to be nominated. If you have a Republican field that has several people competing, they may split the alternative vote and Trump may end up winning. I think he still has a good chance of being the Republican nominee. If you’re a Democrat, that’s not the worst thing in the world. It is probably easier to run against Trump than a more normal Republican candidate.

[GWS] Two years is still a long time in politics. You said that Trump is likely to be nominated. Would Biden also run again?

[FF] I think that Biden is going to run again. Part of the problem is in the Democratic Party. It’s not clear who the successor would be. There are a lot of potential new-generation politicians, but I don’t think any of them has enough presence and attention that they can clearly take over the mantle to run as the Democratic candidate. If there is a rematch, I think Biden will win.

[GWS] Now to South Korea. Last June, I did some interviews advocating a parliamentary system, and they received good attention. There is still a lot of hesitancy among Koreans, though. I think there are a few reasons. The first is that we need a strong presidential system to deal with North Korea. There’s no stability if the prime minister keeps changing. Second is that it may drive politicians closer to big business (chaebol) because there’s less direct accountability. What would you suggest for South Korea in terms of institutional reform?

[FF] There are several possibilities even short of a parliamentary system. You can coordinate the presidential and parliamentary terms. It’s still the case that the president has a five-year term, but the legislature is on an even-year term. If you want to have strong government, you need a president that has majority support in the legislature. If they get elected simultaneously on a regular basis, you’re more likely to see strong leadership emerge. In a presidential system, the legislature itself is a check against the president. If you don’t have a strong majority in the legislature, you can’t do anything.

[GWS] That is what is happening right now in Korea.

[FF] In a parliamentary system like the British one, if you have a majority in parliament, you can do what you want. I think the presumption that somehow a presidential system is inevitably stronger than a parliamentary system is not historically correct.

[GWS] Is a parliamentary system maybe one solution to political polarization?

[FF] Sometimes a parliamentary system will have that effect, but the kind of plurality voting system that we have in the United States and in Britain tends to promote polarization. To the extent that you make it possible for third parties to run, that’s probably a better system. If you have more parties and it becomes harder to get a majority in the legislature, that forces coalitions and some degree of power sharing.

This essay originally appeared in Korean on November 27 in Sindonga (New East Asia), Korea’s oldest monthly magazine (established 1931), as part of a monthly column, "Shin’s Reflections on Korea." Translated by Raymond Ha. A PDF version of this essay is also available to download. 

Two great waves of change are sweeping across the world. The first is the economic and technological transformation of the Fourth Industrial Revolution. At the same time, declining birth rates and aging populations have triggered social and demographic changes, mostly in developed countries. The global demand for highly skilled labor is rising to due to rapid technological progress, but the working-age population is shrinking. This has created a widening supply-demand imbalance for global talent. Companies and countries are locked in a fierce competition to attract the most talented individuals.

Korea is no exception. It severely lacks the workforce that it needs to successfully navigate the Fourth Industrial Revolution. Moreover, the demographic changes noted above are proceeding at a much faster pace in Korea than in other developed countries. Until now, Korea has focused on attracting low-skilled labor from abroad to address domestic labor shortages. However, Korea must now pivot to attracting high-skilled talent from across the world to safeguard its future. New economic and demographic realities leave no alternative.

Although it faces such formidable challenges, Korea is lagging far behind in the global competition to attract talent. It does not present a welcoming environment for foreign workers. The size of Korea’s economy ranks in the top 15 worldwide, but it ranked 27 out of 134 countries in INSEAD’s 2021 Global Talent Competitiveness Index.[1] Specifically, it falls worryingly short on two elements that are central to talent competitiveness: brain gain and tolerance for immigrants, respectively ranking at 45 and 65.

If Korea is to overcome its current demographic crisis and find a new engine of economic growth amidst the Fourth Industrial Revolution, it is vital to formulate policies and strategies to attract and utilize highly skilled talent from abroad. To be sure, the government has recognized this problem for many years. The Presidential Committee on Aging Society and Population Policy was formed in 2005, and the Yoon Suk-Yeol administration is preparing to create a new agency to coordinate and direct immigration policy.[2] Nonetheless, government policies still fall short in many respects. Countries with a long history of immigration, such as the United States and Australia, are taking proactive steps to attract global talent. The same holds true of countries that have key historical and social similarities with Korea, including Japan and Germany. What can Korea learn from their experiences?

The Front Lines of a Global Talent War

The 21st century has given rise to a veritable global war to attract talent. The competition is quickly intensifying in cutting-edge technologies, including artificial intelligence, big data, self-driving vehicles, and robotics. Faced with falling birth rates and aging populations, many developed countries are eager to attract global talent. Since demand for such talent is not confined to any region or country, highly skilled individuals are crossing oceans and continents to destinations that provide the most promising opportunities. These individuals consider not only potential wages, but also quality of life and the socioeconomic environment. As their skills are in high demand, they hold all the cards.

Political factors, such as the rise of anti-immigrant sentiment and chauvinistic nationalism, are also having a significant impact on talent flows. Tensions between China and the United States, especially in the areas of technology and information, further complicate the picture. Silicon Valley is at the front lines of this Sino-U.S. competition, as well as the global war to attract talent. There is a sense of urgency in the struggle against China to secure talent in critical technologies like those mentioned above. Trade disputes between Washington and Beijing are only the tip of the iceberg. The real battle is taking place over technology, information, and the highly skilled individuals who work in these sectors. Since the Chinese government is making a concerted effort to gain the upper hand in talent recruitment, the United States is compelled to respond. The Biden administration has been taking legislative steps at home and crafting multilateral initiatives abroad to bolster economic security in key sectors, including semiconductors.[3]

The rise and fall of global companies over the past 30 years highlights the gravity of the global war to attract talent in the technology sector. As of April 2022, the top five companies in the world in terms of market capitalization were Apple, Saudi Aramco, Microsoft, Alphabet (Google’s parent company), and Amazon.[4] With the exception of Saudi Aramco, which has benefited from the recent surge in oil prices, all of them are relatively young IT companies that have amassed enormous wealth by utilizing advanced technologies. These companies heavily rely on talent from countries across the world, including China and India. The battle between the United States and China to attract talent in these fields will only grow more complex in the years to come.

In 1989, which marked the heyday of Japan’s postwar economy, the situation was quite different: 7 of the top 10 and 32 of the top 50 companies in the world were Japanese. Thirty years on, there are no Japanese companies in the top 30. Only Toyota barely clings on to the top 50.[5] While Japanese companies succeeded in creating products for a global market, a rigid organizational culture and the failure to attract overseas talent precipitated a prolonged economic decline. Japan fell behind in the competition to attract global talent because of an inward-looking and exclusionary corporate culture.

Korea should reflect on Japan’s experience, as it is in the midst of an unprecedented perfect storm. It is facing a crisis on three fronts: a plummeting birth rate, an aging population, and a serious brain drain. The first two crises are leading to a shrinking working-age population in the coming decades. In addition, the ongoing brain drain will have grave repercussions for Korea’s future by thinning out its domestic talent pool.

Korea and Japan in an Aging World

In the past, Korea focused on achieving economic growth by controlling population growth. Under Park Chung-Hee, for instance, the South Korean government recognized population policy as an integral element of its plans for economic development. It increased access to contraceptives and launched a nationwide campaign to encourage people to have fewer children.[6] Little thought was given, however, to how a low birth rate and an aging population would affect the economy. In addition, several socioeconomic changes and strains have also further contributed to South Korea’s declining birth rates and population: expensive housing, intense job market competition, and young people choosing to pursue their careers over starting families. However, Japan’s experiences prove cautionary: among advanced countries, Japan was the first to encounter a demographic crisis, and its failure to anticipate and properly respond to this problem was an important factor in its economic slowdown. The country’s “Lost Two Decades” were partly related to sudden changes in its birth rate and population age structure.

Korea’s demographic crisis is unfolding at a much faster pace. Its birth rate is already lower than that of Japan, and its population is aging more quickly. Combined with the severe brain drain, these demographic changes will have far-reaching effects on Korea’s society and economy.

According to Korea’s national statistical office, 260,600 infants were born in 2021.[7] This represents a 4.3% decline compared to the previous year. The annual figure hovered around 600,000 until 2000, but it has fallen to less than half that figure in only two decades. In terms of the total fertility rate (TFR), Korea fell from 0.84 in 2020 to 0.81 in 2021. This statistic represents the average number of children that a woman would have by the end of her reproductive period (age 15 to 49).[8] Simply put, Korea has reached the point where the average woman does not give birth to even one child over her lifetime.

The OECD classifies countries with a TFR of 1.3 or lower as having an extremely low birth rate. Korea entered this category in 2002. Of the 38 OECD member states, Korea has had the lowest birth rate since 2017. The impact of this demographic downturn is already clear, with a noticeable decline in the population of college-age students.[9] Korea’s economy will have an ever-shrinking domestic pool of talent to draw from.

Korea’s population is also aging rapidly. It is projected to become an “extremely aged society” by 2025, when 20.6% of its population will be 65 or older. This figure is expected to reach 40% by the middle of the century. The pace of this change is much faster than it was in Japan, which is well known across the world as an aged society. An Aging World: 2015, a 2016 report by the U.S. Census Bureau, predicts that Korea will become the second-most aged society by 2050, exceeded only by Japan. Korea had been one of the youngest countries, it notes, but will become one of the oldest in the next 50 years.[10]

Korea’s government may have succeeded in its efforts to control population growth, thereby facilitating the “Miracle on the Han River,” but the demographic consequences of those policies now pose a significant obstacle to the country’s sustainable development. The working-age population (age 15 to 64) peaked at 73.2% of the population in 2017. This proportion will plunge to 66.0% by 2030 and 51.1% by 2050. A shrinking labor force will have to shoulder an increasingly heavy burden to support the elderly.

While the government already recognized the gravity of the problem many years ago, its efforts to alleviate the situation have yielded only dismal results. It poured $200 billion into various initiatives aimed at lifting the birth rate over the last 16 years, but the country now has the lowest fertility rate.[11] Attempts to address the aging problem have also been unsuccessful. Although the government is allocating greater resources to deal with the issue, the situation is dire. The relative poverty rate among the elderly reached 40.4% in 2020.[12] In addition, the suicide rate among the elderly was 54.8 per 100,000 in 2017. This is 3.2 times the OECD average. More resources are required to effectively address the problem, which is likely to worsen in the coming decades.

Exit: An Outflow of Talent

These population issues are compounded by the fact that Korea is also experiencing a serious brain drain. This is especially pronounced among highly educated individuals in STEM fields, who will play a vital role in the era of the Fourth Industrial Revolution. In 2016, the Biological Research Information Center, an online forum for biologists in Korea, surveyed 1,005 of its members about this issue. When asked, “If you had to find a job within a year, would you prefer staying in Korea or going abroad?” 47% of respondents indicated that they would look overseas.[13]Furthermore, Korean students who graduate from PhD programs in the United States in STEM fields mostly prefer to find jobs in America instead of returning home. Around half of these individuals remain in the United States after graduation, and the number has grown over time. In 2011, the 5-year stay rate of Koreans who had graduated with a PhD from the United States in science or engineering was 42%.[14] In 2017, it was 57%.[15]

Companies in China and Europe are working hard to recruit Korean talent in advanced technologies. Northvolt, a Swedish battery manufacturer, revealed that it hired personnel from LG Chemical to play a central role on its own R&D team soon after the company was established. The electric vehicle division of China’s Evergrande Group is hiring talent from abroad, including Korea. As the Sino-U.S. competition intensifies, Chinese companies are pulling out all the stops to attract foreign talent in key sectors, including the semiconductor industry. They are offering salaries that are two to four times higher than what Korean companies can provide. There are growing concerns that a brain drain could also lead to an outflow of critical technologies.

According to a 2016 report by the Swiss-based Institute for Management Development, Korea ranked 41st of 63 countries in terms of brain drain and 33rd in terms of brain gain.[16] The countries analyzed in this report can be divided into four groups, depending on whether they rank high or low on the two dimensions of brain drain and brain gain. Countries such as the United States and the United Kingdom have low brain drain and high brain gain, which means that they can draw on a large talent pool. Korea, Japan, and Taiwan are in the opposite situation. They have high brain drain and low brain gain. Even among this group, Korea shows the largest gap between talent inflow and outflow. It finds itself in an especially disadvantageous position as it enters the era of the Fourth Industrial Revolution.

There is no time to lose. If Korea is to find its way out of the perfect storm of a demographic decline compounded by a brain drain, it must be able to attract and rely on foreign talent. It cannot remain a bystander in the intensifying global competition to recruit talent. Until now, Korea has mostly drawn on low-skilled workers from China and Southeast Asian countries. As of 2021, there were 855,000 such migrant workers in Korea. The number of highly skilled migrant workers is less than 10% of this figure. There must be a shift toward attracting foreign talent before it is too late.

This will not be a straightforward task. Immigration is a highly sensitive issue in Korea. Chronic youth unemployment, especially among college graduates, continues to be a serious problem. This is largely due to a mismatch in Korea’s labor market, whereby there is strong preference among young Koreans for skilled, professional jobs, which are on a decline.[17] As youth unemployment is a structural problem that cannot be quickly resolved, the public will be anything but receptive to calls for high-skilled immigration. A wave of anti-immigrant sentiment swept across Europe and reached the shores of the United States, where Trump entered the White House by capitalizing on the anger of white working-class voters. It would be unwise to ignore similar political undercurrents in Korea. Nevertheless, concerns about the possible economic costs of high-skilled immigration fail to appreciate the bigger picture. An influx of foreign talent could contribute to job creation, especially in the skilled sector, thereby alleviating youth unemployment. Moreover, assembling a diverse workforce will stimulate creativity, which plays a pivotal role in the technology sector.[18]

Who Will Make the Next iPhone?

Silicon Valley provides an important data point for informing discussions in Korea about high-skilled immigration. The region’s success would not be possible without the unique history of the United States as a nation of immigrants. However, it is the inclusive culture of Silicon Valley, which recruits diverse talent without regard for ethnicity or nationality, that has enabled its companies to become the driving engine of the global economy. In only 30 years, these individuals have transformed the orchards and vineyards of a small corner of northern California into the global epicenter of the technology industry. Some of them first arrived as students at Stanford or UC Berkeley and then settled down in the Bay Area. Others came in search of jobs from the very beginning. Together, they are competing and collaborating with each other as they push humanity toward new frontiers of technological innovation.

Without such a multinational, multiethnic workforce, Silicon Valley as we know it would not exist. It stands at the cutting edge of technologies that define the Fourth Industrial Revolution, including AI, self-driving vehicles, augmented reality, and IoT. The brightest minds in the world have gathered in Silicon Valley from all corners of the globe. It is no coincidence that engineers and entrepreneurs of Indian, Chinese, and Taiwanese heritage play a leading role in the region’s largest companies. Sundar Pichai (Google), Satya Nadella (Microsoft), and Rajeev Suri (Nokia) all completed their undergraduate studies in India before coming to the United States to build their careers. Jen-Hsun Huang (Nvidia) and Steven Chen (YouTube), both prominent figures in Silicon Valley, emigrated to the United States from Taiwan at a young age. Marc Tessier-Lavigne, the president of Stanford University, came to the United States as a post-doc after completing his PhD in France. It is common to see other faculty members who first came to the United States as students from India or China.

The INVEST Act of 2012, introduced by representatives Adam Schiff and Charles Bass, provides a pathway for foreign students in STEM fields to create companies and obtain permanent residency in the United States. In a March 2012 op-ed, Schiff and Bass observe that “for every foreign-born worker who puts his or her advanced degree to work in this country, more than two jobs for American-born workers are created.” They stress that “our universities are educating the next generation of Steve Jobs’; let’s make sure that they build the next Apple—and the next iPhone—in the United States.”[19] At a congressional hearing in 2008, Bill Gates similarly noted that “Microsoft hires four Americans for supporting roles for every high-skilled H-1B visa holder it hires,” calling on the U.S. government to take proactive measures to attract foreign talent.[20]

Around a quarter of all technology and engineering-related companies created in the United States between 2006 and 2012 were formed by immigrants. In Silicon Valley, the proportion is nearly 50%.[21] The experiences of first-generation immigrant entrepreneurs such as Elon Musk (Tesla, SpaceX), Sergey Brin (Google), Andrew Grove (Intel), and Vinod Khosla (Sun Microsystems) are anything but exceptional. One analysis finds that “immigrant founders from top venture-backed firms have created an estimated average of 150 jobs per company.”[22] Numerous studies demonstrate that high-skilled immigration, instead of taking jobs away from native-born workers, leads to job creation and promotes economic development through technological innovation. Companies such as Google, Apple, and Facebook (Meta) spoke out strongly against the Trump administration’s anti-immigration policies for this very reason.

Making the Most of Global Talent Flows

Many countries have now entered the global competition for talent, some of which bear similarities to Korea. Widely hailed for its success as a “startup nation,” Israel was able to develop its economy by attracting talent from diverse countries. Just like Korea, Israel lacks natural resources and is located in a volatile, conflict-prone region. Despite these disadvantages, Israel succeeded in recruiting foreign talent and attracting multinational companies. After the Soviet Union collapsed, there was a large influx of immigrants into Israel. Many of them were professors, scientists, and engineers, and their skills and experiences played a pivotal role in facilitating Israel’s economic growth.[23]

Germany, which is arguably the originator of ethnic nationalism, also merits a closer look. Before 2000, Germany enforced stringent restrictions on high-skilled immigration for foreign talent. Concerns about its declining birth rate, aging population, and shortage of highly trained STEM personnel prompted the government to revise its immigration policies. It introduced a “Blue Card” system in 2012 that enabled highly qualified foreign workers to seek employment in Germany. In only two years, Germany succeeded in attracting 17,000 individuals through this system from non-EU member states. Unlike the United Kingdom or France, where anti-immigrant sentiment remains prevalent, Germany is poised to further expand high-skilled immigration. This will bring economic benefits that will cement the country’s role as a pillar of the EU.

Japan has also transformed its policies to overcome its demographic malaise. While it previously focused on low-skilled immigration for “3D” occupations, just as Korea has, Japan has now set its sights on attracting foreign talent.[24] One of the major elements of Abenomics was attracting foreign talent. The government announced a plan to host 300,000 foreign students. It provided tailored assistance at every step of the way, from admissions to graduation and job preparation. In particular, foreign students who sought to find employment in Japan after graduation were offered career counseling and employment assistance. Visa regulations were amended to allow such students to stay in Japan for a year while seeking employment. There has already been a change in atmosphere among Japanese businesses. In a survey of 732 Japanese companies in December 2018, 57.2% indicated that they had already hired (or planned to hire) a foreign worker with a college degree.[25]

China has also thrown its hat in the ring. Hao Zhen, chief consultant for Zhaopin, a popular Chinese job search website, noted that “China desperately needs highly skilled workers in AI and other sectors, but it does not have an education system that is capable of creating such a workforce.” This is “why major Chinese IT companies such as Baidu and Alibaba are seeking to recruit foreign talent,” Hao added.[26] China is taking steps to promote high-skilled immigration by relaxing regulations for employment visas and permanent residence. These policies were initiated by the central government, but in 2016 these measures were also extended to immigration policies at the provincial level. Furthermore, the Chinese government also introduced a policy to provide permanent residence to foreigners who start a company in Zhongguancun, also known as China’s Silicon Valley, provided that they meet certain criteria.

Time to Tear Down the Walls

A truly global competition is underway to attract highly skilled workers, and it is past time for Korea to join the fray. This is matter of survival for Korea, given its demographic crises and brain drain. There is a pressing need to form a public consensus in Korea on high-skilled immigration.

Any number of policy proposals could help attract foreign talent. One example that could be implemented with relative ease in Korea is to draw foreign students into the labor market. Although the number of foreign students has surpassed 100,000, hosting foreign students is still primarily seen as a means of compensating for declining enrollment numbers at home. These students have the potential to make valuable contributions to Korea’s society and economy, but as some have noted, they are not always as skilled or qualified as their Korean counterparts. Moreover, the industries they seek to enter are not necessarily the ones where Korea needs foreign talent. This could be remedied by establishing a comprehensive system to nurture and train foreign students, starting from the admissions process. This can help ensure that foreign students play an essential role in Korea’s economy, especially in sectors that face critical labor shortages. Creating successful pathways to employment for foreign students will help attract even more students down the line.

The United States, the United Kingdom, Australia, Canada, and now Japan have already taken similar steps. In Japan, around 30,000 foreign students found jobs in 2019 after graduating. Assuming that around a quarter of the 300,000 foreign students in Japan graduated after full-time enrollment, the employment rate is roughly 40%. The goal is to reach 50% employment for foreign-born graduates, and the current success rate is already playing an important role in attracting more talented students from abroad. Korea should also put in place the institutions to enable this virtuous cycle and use global talent flows to its advantage.

Drawing highly skilled foreign workers into Korea’s economy will not only strengthen the overall talent pool, but also stimulate creative thinking and enhance productivity by raising cultural diversity.[27] In an industrial economy, it was vital to have a homogeneous and cohesive workforce that could quickly and efficiently achieve a given objective. We now live in an economy where creativity and innovation are the order of the day. There is an emphasis on the power of creative destruction. Korea remains one of the most homogeneous societies in the world, and Koreans have traditionally placed a high value on ethnic and cultural unity. Increasing diversity is an urgent and daunting challenge. An influx of global talent could help revitalize Korea’s economy and stimulate technological innovation. The recent surge of interest in Korean culture across the world could provide a crucial window of opportunity to attract foreign talent.[28]

In this vein, it is timely that the Yoon administration is preparing to establish a new agency to handle immigration policy. However, it will not be enough to revise the Immigration Act or pass laws to create new institutions. There must be a profound social and cultural transformation. In particular, Koreans must tear down the walls of their exclusionary “super-networks,” which are often built around common alma maters, shared regional backgrounds, and family ties. We must move beyond the emphasis on purity and homogeneity. Only then can Korea foster an open, inclusive, and tolerant culture where individuals of diverse backgrounds can freely come together and strive for new heights of innovation.

Two thousand years ago, all roads led to Rome. When in Rome, as the saying goes, people had to “do as the Romans do.” We now live in a world of complex global talent flows, where highly skilled individuals around the world cross oceans and continents to seek the most promising opportunities. If Koreans insist that foreigners “do as the Koreans do,” they will simply look elsewhere.

[1] Bruno Lanvin and Felipe Monteiro, eds., The Global Talent Competitiveness Index 2021: Talent Competitiveness in Times of COVID (Fontainebleau, France: INSEAD, 2021), https://www.insead.edu/sites/default/files/assets/dept/fr/gtci/GTCI-2021-Report.pdf. The full breakdown of Korea’s scores is on p. 146.

[2] Lee Hyo-Jin, “Gov’t Prepares to Set Up Migrant Policy Agency,” Korea Times, November 9, 2022, https://www.koreatimes.co.kr/www/nation/2022/11/177_339429.html.

[3] Gi-Wook Shin, “Walking a Tightrope,” Shorenstein APARC, November 16, 2022, https://aparc.fsi.stanford.edu/news/walking-tightrope.

[4] “The 100 Largest Companies in the World by Market Capitalization in 2022,” Statista, May 2022, accessed November 30, 2022, https://www.statista.com/statistics/263264/top-companies-in-the-world-by-market-capitalization/.

[5] “100 Largest Companies in the World,” Statista.

[6] Wie Young, “Korea’s Population Policy, Past and Present” [in Korean], Quarterly Journal of the National Archives of Korea 16 (2011): 72–74, https://www.archives.go.kr/archivesdata/upFile/palgan/1320392249078.pdf.

[7] Unless noted otherwise, all population statistics in this section are from KOSIS (Korean Statistical Information Service), Korea’s national statistical office, https://kosis.kr/index/index.do.

[8] The full definition of TFR given by the World Health Organization is “the average number of children a hypothetical cohort of women would have at the end of their reproductive period if they were subject during their whole lives to the fertility rates of a given period and if they were not subject to mortality.” See “Total Fertility Rate (per Woman),” WHO, https://www.who.int/data/gho/indicator-metadata-registry/imr-details/123.

[9] Children who were born in 2002, when Korea’s TFR first fell below 1.3, would have entered college in 2020.

[10] Wan He, Daniel Goodkind, and Paul Kowal, An Aging World: 2015 (Washington, D.C.: U.S. Government Publishing Office, 2016), https://www.census.gov/content/dam/Census/library/publications/2016/demo/p95-16-1.pdf.

[11] Paula Hancocks, “South Korea Spent $200 Billion, but It Can’t Pay People Enough to Have a Baby,” CNN, December 4, 2022, https://www.cnn.com/2022/12/03/asia/south-korea-worlds-lowest-fertility-rate-intl-hnk-dst/index.html.

[12] This is defined as the proportion of households among the elderly population (65 or over) whose disposable income falls below the poverty line. The poverty line is defined as 50% of the median household disposable income for the entire population. See also “Relative Poverty Rate of Elderly Is Highest Among OECD Member Countries,” Dong-A Ilbo, April 7, 2022, https://www.donga.com/en/article/all/20220407/3299509/1.

[13] Lee Kang-Soo and Park Ji-Min, “A Survey Regarding the Brain Drain among STEM Personnel” [in Korean], Biological Research Information Center, July 12, 2016, https://www.ibric.org/myboard/print.php?Board=report&id=2534.

[14] The 5-year stay rate counts foreign students who remain in the United States for five years after their PhD is awarded. This represents an increase from 10 years prior, when the stay rate was 22%. See “Stay Rates of Foreign Doctorate Recipients,” Oak Ridge Institute for Science and Education, https://orise.orau.gov/stem/workforce-studies/stay-rates-of-foreign-doctorate-recipients.html.

[15] “Survey of Doctorate Recipients: Survey Year 2017,” National Center for Science and Engineering Statistics, National Science Foundation, 2017, https://ncsesdata.nsf.gov/doctoratework/2017/.

[16] The 2016 IMD World Talent Report (Lausanne, Switzerland: Institute for Management Development, 2016), https://www.imd.org/contentassets/5665db95f401437a802c0d86aaa2dfb1/com_november_2016.pdf.

[17] Kyungsoo Choi, “Why Korea’s Youth Unemployment Rate Rises,” KDI Focus 88 (2017): 4. https://doi.org/10.22740/kdi.focus.e.2017.88.

[18] See Gi-Wook Shin, “Beyond Representation: How Diversity Can Unleash Korea’s Innovation,” Shorenstein APARC, June 30, 2022, https://aparc.fsi.stanford.edu/news/beyond-representation-how-diversity-can-unleash-korea%E2%80%99s-innovation.

[19] Adam Schiff and Charlie Bass, “Winning the Global War for Talent,” Glendale News-Press, March 10, 2012, https://www.latimes.com/socal/glendale-news-press/news/tn-gnp-xpm-2012-03-10-tn-pas-0311-congressman-adam-schiff-and-congressman-charlie-basson-winning-the-global-war-for-talent-story.html.

[20] Timothy B. Lee, “Gates to Congress: Microsoft Needs More H-1B Visas,” Ars Technica, March 13, 2008, https://arstechnica.com/tech-policy/2008/03/gates-to-congress-microsoft-needs-more-h1-b-visas/.

[21] Sarah McBride, “One Quarter of U.S. Tech Start-Ups Founded by an Immigrant: Study,” Reuters, October 2, 2012, http://reut.rs/Wduege.

[22] Jason Wiens, Chris Jackson, and Emily Fetsch, “Immigrant Entrepreneurs: A Path to U.S. Economic Growth,” Ewing Marion Kauffman Foundation, January 21, 2015, https://www.kauffman.org/resources/entrepreneurship-policy-digest/immigrant-entrepreneurs-a-path-to-us-economic-growth/.

[23] Shin, “Beyond Representation.”

[24] 3D jobs are those that are dirty, dangerous, and demeaning (or demanding/difficult). 

[25] Yuta Koyanagi, “More Japanese Companies Hire Talent from Overseas Universities,” Nikkei Asia, January 30, 2019, https://asia.nikkei.com/Business/Business-trends/More-Japanese-companies-hire-talent-from-overseas-universities.

[26] Kim Dong-Yoon, “Baidu’s Li Yanhong to Silicon Valley Developers: If You Don’t Like Trump, Come to China” [in Korean], Korea Economic Daily, November 20, 2016, https://www.hankyung.com/international/article/2016112020801.

[27] Shin, “Beyond Representation.”

[28] See Gi-Wook Shin, “Will Hallyu Swell to a Tidal Wave? Korea’s Future as a Cultural Superpower,” Shorenstein APARC, August 1, 2022, https://aparc.fsi.stanford.edu/news/will-hallyu-swell-tidal-wave-koreas-future-cultural-superpower.