Having analyzed companies and market dynamics in Korea for over a decade, I believe there continues to be some conflict between status quo and real entrepreneurial and social change. Change takes time in Korea. But when it happens—most recently with attitudes toward smoking—it seems to happen very quickly.
While back in Seoul recently, I was pleasantly surprised to witness this shift in sentiment. At Matthews, we spend a lot of time talking about entrepreneurship in Asia, about consumer demand and a changing landscape of corporate governance and improved business practices. These can be the antithesis of the “old school” mentality that was perhaps more prevalent when Korea’s chaebol (large, often family owned conglomerates) were more dominant.
So how do shifting views on smoking play into this? Until recently, Korea ranked second-highest in number of smokers among the Organisation for Economic Cooperation and Development (OECD) member nations (ahead of just Greece). Not surprisingly, Korea’s anti-smoking policies were ranked second to last among 25 OECD members in effectiveness. A few years ago, the affluent Seoul district of Gangnam took controversial measures to ban public smoking. Since then, government officials have drastically increased the number of smoke-free zones, including all outdoor bus stops and building entrances. Today, most parks, beaches and public areas now ban smoking.
Naturally, there are a few designated areas where smokers still congregate—in narrow alleys of the central business district buildings, sending up smoke like chimneys. However, it has been interesting to see the momentum around smoking reforms in a short period of time. In Korea, where military service for most men is compulsory after age 18, many seem to pick up the habit while serving. But now all South Korean Air Force bases make smoking off-limits and the country’s Air Force Academy bans pilots and cadets who smoke from flying.
While smoking crosses many demographics in the West, in Korea, it has historically been taboo among women. People used to joke that if you didn’t drink and didn’t smoke, you didn’t socialize and by extension, get promoted. As recently as 2001, the majority of men in Korea were smokers (nearly 53%) while just 4% of women smoked. In an ironic shift toward “gender equality,” the number of male smokers has decreased, while the number of female smokers has been moving slightly in the opposite direction.
How does smoking touch on society’s views toward gender politics, quality of life issues and even corporate governance? Perhaps all of this becomes a commentary on Korea’s changing corporate and social landscape. Suddenly, Korea’s anti-smoking policies appear more progressive than its regional peers.
Large corporations in Korea are now championing fierce anti-smoking campaigns. Some employees are not only being tested to show they are nicotine-free, but are being passed over for promotions as employers strongly encourage, or even require, employees to quit. Attention to such behavioral modification touches on many important elements around sustainable growth. That includes choices around a higher quality of life, better health care, overall productivity and perhaps even promoting a more level playing field for women in the workplace.
As an investor, I see Korea’s anti-smoking campaign as more encouraging evidence of society’s continuing efforts to address all these concerns.