How Large Corporations Dominated Design of South Korea

Kim Sang-kyu

Professor, Department of Design, Seoul National University of Science & Technology

Design in South Korea Now

From the late 1990s until the present time, design culture in South Korea has been dominated by large corporations such as Samsung and LG. These companies have their own design divisions. At the same time, outside design firms depend on them as clients for their services, while the events and exhibitions that smaller, independent design studios rely on for exposure are often sponsored by these large corporations as well. For many young designers, the ultimate aim is to find employment with a big company, rather than explore their own initiatives. One could argue that this stifles creativity. How did this situation arise? How did these large Korean corporations come to exist, and how did designers come to depend so much on them?

Today's situation is the output accumulated from the past. At present, the status of Korean design may have been influenced by Korea's traditions and design education system. However, the formation of large corporations has had an even greater impact. South Korea's well-known large corporations emerged around the Korean War, which falls within the period of the Cold War. Therefore, it is necessary to trace back to the Cold War era to understand today's Korean design.

Korean Society and Design during the Cold War Era

The Establishment of the South Korean Government and the Birth of Large Corporations

The Republic of Korea was established in 1948 after the country's liberation from Japan in August 1945, and the Korean War broke out soon thereafter, further cementing the division of the Korean peninsula. During this era of the Cold War, South Korea built its foundation as a modern nation and realised rapid economic growth. This does not differ greatly from the processes that many of Asia's industrialised countries underwent during the same period. The route by which Western design was introduced into South Korea was also similar. As part of a national reconstruction programme, American craft, design and architecture experts were sent to South Korea and helped lay the basis for the country's industries and education. In addition, South Korea promoted the development of its own industries with the help of the government's export policy, which was primarily geared towards the U.S. market.

However, the processes of industrial development in South Korea were not smooth. Though a new nation and government were established after the end of Japanese occupation, Korean politics and society remained confused and conflicted. Amid the disorder, many South Koreans who were pro-Japanese, and were thus given a privileged position under Japanese rule, were not reprimanded but instead solidified their power in politics, the economy, and the military. These capitalists bought industrial facilities left behind by Japan and were able to secure an industrial base in the 1950s. Moreover, they were able to accumulate further wealth thanks to the aid, in goods and cash, that flowed from foreign countries into South Korea.

The Formation of Organisational Structures of Large Corporations

Foreign aid provided by the U.S. was an important reconstruction resource for South Korea (though it was also a means for the U.S. government to intervene in South Korea's policies). Foreign aid continued from September 1945, when the US began its three-year military occupation of Korea, until the early 1970s. Eventually, the aid funds were directed to companies that had production capacity, which gave important momentum to the birth of large Korean corporations.

The organisational structures of these large corporations may have been influenced by those of Japan. Most of all, this was because it was largely the capitalists who were familiar with the Japanese system who operated these companies. They also benefited from the technical investments made by Japan's private companies starting in 1965, when diplomatic relations between South Korea and Japan were normalised. The exchanges deepened: For example, Yong-gui Park, a designer for GoldStar (currently LG Electronics), occasionally visited the design studio of Hitachi in Japan to participate in training programs.

In addition, the military influenced the organisational structures and cultures of large corporations. South Korean armed forces played the role of an industrial training school for about 30 years after the Korean War, attesting to the strong connection between South Korea's economic development and its military. Moreover, in pushing for extremely rapid industrialisation, the military regime that governed South Korea for 32 years, from 1961 to 1993, directed the country's growing companies to invest in industries it judged as necessary for industrialisation. During this process, the relationship between the government and corporations grew closer.

The Birth of Conglomerates and the Establishment of Design-led Corporations

Conglomerates (chaebol in Korean) form the core concept for understanding South Korea's unique corporate culture. Defined as large-scale business groups in which specially related people, including families, centred on a certain individual, make management decisions, South Korea's chaebols have had profound effects on both South Korean society and the country's overall design development.

These corporations, whose power has been compared to that of 'sub-states', are a product of the Cold War era. Within the ideological disputes of the period and its anti-Communist imperatives, the chaebols received support and protection from the U.S. government. In addition, they enjoyed special procurement advantages from the Americans during the Vietnam War. Vietnam became a new market for goods and equipment from numerous South Korean companies, including those in the construction industry. The situation mirrored that of Japan, which received an economic boost when it supplied American troops during the Korean War. One can say that war has played a significant role in the economic development of East Asia.

The Birth of Radios: Listening to Modernisation in the 1960s

Against this backdrop, South Korean industrial design may have started in 1959 with the introduction of the country's first domestically produced radio, the A-501 from the GoldStar company (Fig. 1). Designed by a Korean for a Korean company, the A-501 became a political and social symbol of the 1960s, especially after the general Park Chung-hee led a military coup and became president in 1961. Under Park's regime, the A-501 became a tool of both entertainment and propaganda. For an administration that placed top priority on anti-Communism and modernisation, the radio was crucial in delivering its policies and opinions in real-time. After GoldStar developed the A-501, their electronic products were developed quickly with strong support from the government. GoldStar would go on to produce South Korea's first domestically made electric fan (1960), telephone (1961), television (1966) and washing machine (1969).

(Fig. 1) Yong-gui Park, A-501 Radio, 1959,
manufactured by GoldStar (now LG Electronics). © LG Electronics

The 1960s also saw the beginning of the automotive industry in South Korea with the founding in 1967 of Hyundai Motors, and its production of the Cortina automobile, in association with Ford, the following year. Although products then were made in South Korea by South Korean companies that had their own design teams, they depended on overseas companies for technology. Furthermore, Korean design relied heavily on imitating foreign designs. As a result, the wealthy and the middle class in South Korea preferred imported goods right up until the 1970s. That being said, the average South Korean mostly used traditionally produced objects in their everyday lives. Eventually, those objects began to be replaced by plastic products at a rapid pace, while the emergence of apartment buildings in the 1970s — then a new phenomenon in South Korea — further transformed the typical Korean home and lifestyle (Fig. 2). Meanwhile, the government launched a design promotion policy under the slogan of 'Art Exports', putting the highest priority on the country's exports. Thus, enabled by economic policies and the cultural shifts that accompanied them, the birth of the Korean design profession in the 1960s came about largely at the hands of the government and big businesses and as the result of a strong mission to modernise South Korea.

(Fig. 2) Ban-po Apartment, 1975–85. © National Archives of Korea

Policies for Heavy Chemical Industry in the 1970s

A new era was launched with the opening, in 1970, of the Gyeongbu Expressway as a shortcut across the country from Seoul to Busan. For South Koreans, the next decade is remembered as a time when much of their lives was controlled by the government, all in the name of economic growth and the 'modernisation of the Fatherland'. It was also a time when South Korea was becoming more Westernised, though people were also growing more conscious of national identity. While it was a political 'dark age', it was also the age of budding consumerism. The government did its best to promote what it declared to be the top six priority industries: steel, chemistry, automobiles, shipbuilding, machine tools and electronics. President Park Chung-hee called in the heads of conglomerates and assigned them their roles. Hyundai Motor Company launched its first independent model, the Pony (Fig. 3) and Samsung Electronics embarked on the production of home appliances. Samsung Electronics established a new design division under its sales department and began to recruit design major graduates as in-house designers. The company started to produce black-and-white TVs and refrigerators in 1972. In the same year, Seoul National University and Hong-ik University established departments of industrial design.

(Fig. 3) Giorgetto Giugiaro of Italdesign Giugiaro S.p.A, Pony,
designed 1974 and produced 1975–82. © Hyundai Motors

In terms of design promotion policy, the Korea Design & Packaging Center (KDPC) was established in 1970. The field of design was developed in earnest soon thereafter, spurred by such government agencies. In the private sector, designers began to work with the press and the publishing industry. Although popular culture from the West, especially from the U.S., was widely embraced in Korea, the period was also marked by greater efforts at defining Korea's national identity.

Furthermore, as farmhouses were upgraded and modern apartment buildings proliferated throughout the country in the 1970s, home interiors went through rapid changes as well. Modernised kitchen furniture emerged, and the demand for electronic goods grew. Such changes paved the way for the emergence of South Korea's middle class in the 1980s.

Democratisation and the Birth of the Middle Class in the 1980s

The 1980s in South Korea began with the onset of the Gwang-ju Democratisation Movement on May 18, 1980. As the decade and its democracy movements continued, labour and social problems kept arising one after another, rooted in the country's rapid industrialisation.

However, the 1980s were also a 'golden era' for South Korea. From 1979 onwards, Korean construction and other companies broadened their reach, for example, by doing business in the Middle East. By the mid-1980s, South Korea recorded economic growth of over 12 percent a year for three consecutive years due to the three 'lows': low oil prices, low interest rates and a low exchange rate against the U.S. dollar. Meanwhile, colour broadcasting started in 1980 and the Chun Doo-hwan administration vitalised sports and popular entertainment; in 1981, after Seoul was selected as the host city of the 1988 Olympics, South Korea's politics, economics, culture and design all converged on this one seminal event. Everything, it was deemed, needed to undergo some kind of change to reach the level of a developed country, from urban public and residential spaces to popular etiquette. A high standard was also applied to the country's design, especially architecture and visual communication design. Seoul's Olympic stadium and the accompanying promotional materials had to be executed at the highest international standards. Large corporations also developed new brands and unique technologies under forward-looking slogans that incorporated words such as 'technopia'. In 1986, Hyundai Motors started exporting its Excel model to the U.S. market, and in 1988 it produced the first of its Sonata series. Soon after, Samsung Electronics released the first cell phone made in Korea. An economic boom, an upswing in the construction industry, a surging real estate market, qualitative improvement in entertainment and increased availability of consumer goods all became the foundation for the rise of the middle class and the start of a new era of popular consumption. Domestic demand for electronic goods and automobiles grew in tandem with the rise of the middle class, which was gaining more and more purchasing power.

South Korean Society and Design after the Cold War

The Expanded Role of Design within Large Corporations

At the end of the Cold War in the late 1980s, American neo-liberalism became mainstream in South Korean society through globalisation. State-led economic development models also came to an end. There were certain reasons for this. First, as large corporations or conglomerates had already accumulated huge wealth, they no longer had the need to rely on the government. Secondly, and crucially, the Asian economic crisis erupted, as will be elaborated on below.

However, previous to the crisis, in the mid-1990s, South Korea enjoyed the most prosperous days in its history with brisk private consumption and business investments in R&D and facilities. Large corporations elevated their design teams to the status of design research centres and further increased their manpower. They established overseas design centres and hosted design competitions. Large corporations gathered high-quality design-related human resources and led design trends.

The Economic Crisis and the Movement of Design-related Manpower

On November 21, 1997, at the height of the Asian economic crisis, the South Korean government requested financial assistance from the IMF. Within this context, drastic corporate restructuring was underway by 1998. The top five conglomerates including Samsung, Hyundai and Daewoo negotiated restructuring agreements with the government. Samsung gave up automobile production and Hyundai Motor Company took over Kia Motors Corporation. Daewoo Group was dissolved and Daewoo Motor Company was acquired by the American firm General Motors. A number of other companies were either merged or liquidated. During this process, unemployment exceeded 1.3 million people, and corporate design organisations were not immune to the layoffs. Many designers who had stable in-house jobs had to work instead as independent designers.

As more designers were employed by design firms or opened their own businesses, the number of those firms increased rapidly within a short time. Because designers moved from large corporations to smaller, independent organisations, the large corporation-centred system appeared to be changing. However, because more design firms appeared while the number of corporate projects decreased, market competition intensified. As a result, the environment for design service businesses was worsened by competitive bidding and unfair contracts.

The Persistence of the Large Corporation-centred System

In 2001, the South Korean government repaid the entire amount of its relief loans and thus emerged from the IMF's economic trusteeship. Although the country's economic situation began to improve, the weakened state of design service businesses did not recover accordingly. During this process, many designers moved to the field of digital content. Large corporations were still either designing on their own or commissioning overseas 'star' designers to conduct design projects. Small and medium businesses had no capacity to carry out design projects since they could not grow under the existing system of large corporations. Although the fields in which professionals could work were diversified, the country's industrial structure has remained heavily dependent on a small number of large corporations. In 2013, Samsung Group's total sales were ₩380 trillion won, accounting for 23% of South Korea's GDP.

In the 2000s, the government's core industries were shifted to the IT and digital content industries, and the number of government design-related projects in those fields increased accordingly. While public design projects were also carried out actively for a while, they did not produce marked changes in the make-up of the design industry due to the lack of a long-term policy for supporting independent talents and creative industries. Nowadays, global Korean enterprises including Samsung and newly emerging companies such as NHN and Hyundai Card are important clients for design. However, most of them carry out their projects within their own design divisions. On the other hand, traditional design practices such as graphic design and product design are going through changes themselves, incorporating expanding areas that combine engineering, management and ICT expertise, such as UX design and service design, thus creating more opportunities for independent practitioners. Moreover, the number of small design studios in Korea is also increasing. While such developments are unlikely to become mainstream, they may prompt small changes to Korean design culture. The current structure and culture that relies on a very few large corporations is not sustainable. Design practitioners should be acutely aware of the difficulties they are facing and enter into critical discussions to encourage a wider range of design activities. This could be a first step to overcoming the highly centralised role of large corporations in Korean design and society.

Organised by WKCDA
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