Subscribe
E-Paper
 |
By Park Si-soo
President Park Geun-hye may be one of the most committed preachers of creativity and innovation in Korea. Since her inauguration in February 2013, Park has pushed government bodies to come up with ways to ease business regulations, believing this will help reinvigorate the slowing engine of Korea Inc.
But judging from what is happening, her voice seems to have largely gone unheeded. Simply put, her government is still sticking to old-fashioned regulations and red tape, destroying, rather than nurturing, the incubating ground for creative and innovative business ideas.
One case in point is the "call bus" service. The late-night bus-hailing app, when it debuted in December, was considered an innovative service to help reduce chronic complaints about the difficulty of catching a taxi late at night. The app got off to a flying start. Last month its developer, Call Bus Lab, decided to expand its service area. But soon after the decision, regulatory hurdles installed by Seoul City hit the firm. Company officials say the city seems to be moving to derail the expansion plan with multiple "outdated" rules favorable to taxi companies.
Call Bus claims the city's rules, if applied, will significantly undercut the freedom and profitability of the service.
"Under the regulations, we will end up discontinuing the service," said Park Byung-jong, CEO of Call Bus Lab. "People's demand for new services is diversifying rapidly. But the government is trying to put them under control with regulations set decades ago." He noted that it would be difficult for game-changing innovative services to take root on Korean soil unless regulators embrace ideas that run afoul of old rules.
Call Bus is not the only victim of old-fashioned regulations.
Another app, "Pinda," was launched in January. It was designed to provide users with tailored information about financial products to buy, based on their gender, income and other private data ― a service similar to that of Credit Karma, a U.S. app used by 350 million people worldwide. But shortly after the launch, financial regulators banned its use, citing rules applied to banks and other conventional lenders.
"Current regulations are structured to encourage competition among companies within the league, while being hostile to those seeking to enter the league," said Lee Byung-tae, an economics professor at the Korea Advanced Institute of Science and Technology. "Innovative and creative ideas will be able to take root and evolve into lucrative business only when such regulations are changed to embrace new challenges to existing players."
