THE ECONOMICS OF ENGLISH

Samsung Economic Research Institute, 12, 11-18 (2006)

JEON Hyo-Chan

I. THE DOMINANT LANGUAGE

In this era of knowledge-based revolution, where knowledge is essential for creating value, the
English language has become the most influential tool for conducting global communication. It
doesn't matter that English is spoken by only 8% of the world's population as their first language.
What does matter is that English functions as the main language for creating and exchanging
knowledge all over the world.
The English language is accepted as the common language for commerce and knowledge. Three
quarters of the world's top 100 universities listed by Newsweek magazine recently for helping to
create knowledge are located in countries where English is the first language of communication.
Thus, English plays a pivotal role in acquiring and spreading knowledge. It is estimated that
about 70% of information delivered on the Internet uses English; and English is the dominant
language used in writing intellectual and scientific journals.
Koreans spend substantial time and energy learning English. Between 2004 and 2005, 102,340
Koreans sat for TOEFL (Test of English as a Foreign Language). Koreans represented 18.5% of
the total 554,942 people taking the test worldwide. According to Korea's Munhwa Broadcasting
Corporation (MBC), each Korean student spends an average of 15,548 hours learning English
from middle school through college. If you add the portion of preschoolers taking English in
kindergarten, Korea spends an enormous amount of time studying the language.
Koreans do not simply spend a lot of time studying English. According to an estimate by
Samsung Economic Research Institute, Koreans spend a total of 14.3 trillion Won annually for
taking private English tutoring classes. In addition, they spend 700 billion Won a year applying
for tests evaluating their English proficiency. Together, these two expenses accounted for 1.9%
of Korea's nominal GDP (806.6 trillion Won) in 2005. Overall, it's a staggering cost. Japan,
which has more than two and a half times Korea's population, spends far less. According to
estimates, Japanese people spend 5 trillion Won (628.3 billion yen) annually on private English
tutoring and English proficiency tests.
One would expect that spending so much time and money on English language should make
Koreans highly proficient in English. Not so. According to a survey taken by the Political and
Economic Risk Consultancy in Hong Kong, foreigners rate Koreans as the worst communicators
in English among 12 Asian countries.

Koreans freely admit this fact. In a 2003 survey by the Seoul metropolitan government, 74.2% of
people polled said that had difficulty communicating in English.
This is a troubling trend. In the current era of globalization, English is indisputably a major tool
for promoting international competitiveness. The English language opens access to quality
information and ensures participation in the global knowledge network. To remain globally
competitive, Koreans must be able to use their English skills. Their communication skills in
English should be used to build an economic infrastructure on which they can upgrade their
competitiveness - individually as well as nationally.

II. POWER OF ENGLISH

1. Business opportunities
For Korea to become the "knowledge hub" of Northeast Asia, it needs to attract core units of the
leading multinational companies. By doing so, it opens access to the global knowledge network
and further expands business opportunities. An abundant pool of competent workers who are
fluent in English and armed with expertise is an essential asset for attracting global companies to
Korea.
But Korea has lagged behind other Asian countries in luring core units of global companies due
to a shortage of English speaking workers. At the end of 2005, Hong Kong and Singapore had
drawn 1,167 and 350 regional headquarters of global companies respectively. Seoul, however,
attracted only 11 regional headquarters of global companies.
In recent years, big-name Korean companies have worked hard to increase their overall global
competitiveness. However, they can't succeed without breaking the language barrier. Currently,
non-Koreans are being recruited for executive posts in Korean subsidiaries abroad, but they run
into difficulty adequately communicating with their corporate headquarters in Korea due to the
language barrier and cultural differences.
2. Personal opportunity
Not only executives, but average workers must also enhance their competitiveness by sharpening
their language skills. More and more Korean companies rate English proficiency as a main
consideration for promotion and salary increase. This is also the case in Europe where English is
not the native language. In Switzerland, male workers fluent in English generally receive 30.7%
more in salary than their counterparts who can't speak it. Female workers proficient in English
earn 21.6% more than their counterparts who don't speak it.
People dreaming of joining the global talent pool must be fluent in English. Those proficient in
English are more likely to be hired and promoted over those who are not. Those who easily
communicate in English can establish a global network with workers of other global companies.

3. Opportunities in the cultural market

In recent years, Korea's popular culture has gained wider acceptance overseas. This popularity
could spread further if language barriers are overcome. A recent Korean movie, "The Host,"
drew a record 13 million viewers earning total box office receipts of US$96 million (91 billion
Won). "The Host's" appeal, however, pales in comparison next to the Harry Porter series from
UK that has so far earned US$960 million. This comparison shows the power of language. If
Korea's cultural productions were produced in English from the beginning or were accompanied
by superb English translation, their global appeal would certainly increase.
This should also be the case with popular music. Some European music groups, such as
Sweden's ABBA and Germany's Scorpions, have written their songs in English to promote
international acceptance. If Koreans improved their English skills, the cultural industry could
become more globally competitive. Further, if they initially record in English, they do not have
to waste time translating. Some specialists believe that Korean writers have failed to win the
Nobel Prize in Literature because, among other things, the Korean language is hard to translate
into English.
But those fluent in English can certainly contribute to Korea's intellectual growth by joining the
global knowledge network. This is because English is the most frequently used medium in
developing the global knowledge network.

III. INVESTMENT IN ENGLISH LANGUAGE

How should investment in English language skills be made more efficient?
First of all, Korea must overhaul its current English language education program in use from
primary to secondary schools. It should change the program to one proven successful in other
countries such as that in Denmark. In Denmark, people have no difficulty communicating in
English after taking English lessons for six years (from fourth grade to the ninth grade). The
amount of time spent on English education in Denmark is almost the same as that in Korea,
however, Koreans admit that their English language is not as strong as that used by the Danish.
To improve the quality of English instruction, Korea needs to develop first class instructors. In
order to achieve this, the Ministry of Education and Human Resources Management (MOE) is
considering an education program to secure quality English teachers. Also, students should be
given more opportunity to use oral English. Developing English education programs suitable for
Korean students would be a good solution.
At the same time, Korean universities should strengthen efforts to expose students to Englishfriendly environments. From a short-term perspective, educational institutions can increase the
share of non-language courses offered in English. From a long-term perspective, they need to
attract more foreign students into Korean schools. Also, they can choose qualified students and
send them overseas, thus helping them better understand global culture. If these students also
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work with Korean companies overseas, the program will effectively integrate educational and
commercial needs.
Third, Korea should make English a "common language." The concept of a "common language"
is different from that of an "official language." A common language serves as an official
language in some geographical areas, but an official language is mandated for use nationwide.
This would allow English speakers to communicate without difficulties in certain areas and
allow Koreans to find English friendly environments. Setting up Special "English Zones" where
English is the official language can be an effective solution.
If Korea successfully creates an English-friendly business environment, it can qualify as a hub
for global business. Also, the "Special English Zone" can provide Korean people with
opportunities to communicate with foreigners. A business environment where English is more
frequently used can give more opportunities to Korea's next generation. Korea's elementary
schools have provided English courses for pupils since 1997. According to a study by the MOE,
Korean students who take English during elementary schools are better in communicating in
English than those who do not.
What should come together with efficiency is cost reduction. Korea can start with what is known
as Globish - a combination of "global" and "English" - a simplified version of English words
using words and phrases in English. For example, "nephew" is described as "child of my brother"
in Globish. Globish can be an effective tool to reduce the monetary and psychological burden of
English learners. Korea needs to develop its own version of Globish designed to help Korean
speakers. At the same time, it needs to set up more English villages and provide free English
education courses.
Finally, Korea needs to invest more in automatic translation machines. Many countries have
raised their investment in automatic translation machine to deal with growing demand for instant
translation and the Internet. The European Union, comprising of 25 nations, provides a good
example in this area. For the German and French languages, automatic translation machines have
an accurate translation rate of 80 to 90%. The US has shown much interest in the automatic
translation system and related machines since 65% of global Internet users use languages other
than English. In order to help the military, the US Department of Defense is currently striving to
develop automatic translation system to translate English into local languages where various
armed forces are based.
If Korea successfully develops a high-quality automatic translation system, it could reduce
overall translation and interpretation costs. Given that Korean word order is different from
English, the Korean government should make a large investment in developing efficient
translation system which can help Korea's digital content and knowledge reach global audiences.
The writer is a research fellow at the Money and Finance Department, Samsung Economic
Research Institute. Inquiries on this article should be addressed to hc.jeon@samsung.com.