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Shoe repair-shop owner Kim Hyoung Hwan might be startled to hear himself described as a pioneer of the type President Kim extols. But his shop in the port city of Inchon is a good place to see some of the changes sweeping Korea. After losing his job as a purchasing manager at a now bankrupt equipment-manufacturing firm, Kim noticed people were spending more on shoe repairs to save money during the turndown. Demand was also rising as paternalistic companies cut back on the coupons for new shoes they used to hand out to employees as part of Korea's benevolent corporate welfare system. So over his wife's objections, Kim found a partner and poured his savings into the shoe shop.
A graduate of a technical high school, Kim has brought engineering smarts to a low-tech business. Curbside shoe repairmen are still a common sight in Korea, so Kim's store is a shock to many customers. It is stocked with a huge array of heels, soles and polishes. Shoes Kim has miraculously salvaged sit out on display. Up by the front window is the computer he uses to track orders and customers. Boasts Kim: "They are surprised when I tell them I programmed it myself."
For many young people, the new frontier has been liberating. As a university student, photojournalist Kim Woo Kyoung fantasized about becoming a taxi driver just to have a chance to drive around and meet ordinary people, but he felt social pressure to stick to a narrow range of "respectable" career choices. Recently Kim left a large television network to set up his own media company. Says Kim: "IMF has broken down the university-credential wall."
Corporate Korea may also be getting the message that it needs to change. The Housing & Commercial Bank, for example, was a clunky, state-run institution until two years ago and the only bank in Korea allowed to make mortgage loans to home buyers. Lending money used to be a relaxed affair. Loan officers decided what a property was worth after a quick look at the house and a chat with the owner or a local real estate agent. Assessments were so rough that the bank could count just 30% of the assessed home value as collateral, and could only lend accordingly. The system was also open to bribery--slipping an envelope full of cash to a bank official was a good way to boost your property value, according to Kim Jun Tae, head of the now privatized bank. "The culture was very bureaucratic," says Kim. "I told people we have to be doing business, we have to sell things."
Since Kim became chief executive last year, that's exactly what bank employees have been doing. Property assessments were computerized with help from U.S. consulting firm McKinsey & Co., and loan officers must spend their time drumming up new business. Or else: 30% of their paycheck is tied to performance. Improved efficiency means homeowners today can get loans of up to 80% of the assessed value of their homes. The bank's president and CEO wants his employees to think like entrepreneurs and sends frequent e-mail to hammer home the message. He even brings in motivational speakers from other walks of life--unheard of in the old days--then broadcasts the talks to every bank branch before opening hours. A Chinese chef recently shared his views on survival in the new global economy, reminding the bankers that "if you don't make the best Chinese food, you won't survive."