How to Cure South Korea’s English Fever?

November 12, 2013, 9:52 AM

How to Cure South Korea’s English Fever?

By Jasper Kim 

How much should a country pay to master the English language? Based on the economics and outcomes of English tuition in South Korea today, the country is throwing excessive amounts at the task with meager results. According to Swiss-based language learning company EF Education First, the average South Korean gets nearly 20,000 hours of English education from kindergarten through university. Much of that tuition comes at private institutes known as hagwon that Korean kids flock to stay ahead in the nation’s hyper-competitive educational race. There are currently over 17,000 hagwon that teach English in South Korea. That’s roughly one hagwon for every 647 students.The annualized growth rate of the hagwon industry from 2005 to 2009 was an astonishing 20.5%, according to Kookmin Financial Group.

On the student side, in 2012 alone, total expenditures on private education were approximately 19 trillion won ($17.7 billion), according to Statistics Korea. The average cost of private education per student is nearly 3 million won per year, or around 13% of total economic output by value per person.

Still, with so much spending based on South Korea’s notorious “English fever,” surely there must be a nice payoff to show for it.

Unfortunately, this has not been the case. In a recent English Proficiency Index surveyof 60 countries worldwide by EF Education First, South Korea ranked 24th–just two notches ahead of Japan and below Argentina and the Czech Republic. Based on this evidence, South Korea ranks as a mid-tier English speaking country at the global scale.

Malcolm Gladwell argues in his best-selling book Outliers that it takes about 10,000 hours to become a “genius” in a particular area. South Korean kids get double that amount of training but most clearly aren’t geniuses.

So what is the solution?

While there is no silver bullet, there are some radical options. One approach could be for the country to embrace English fully and entirely by making it an official national language (similar to Singapore), requiring it at all levels.

Or perhaps South Korea should focus on less (not more) English education for most of its students–continuing “extreme English” only for those who will need it on a regular basis for their future global career trajectory.

This would free up not just capital, but millions of South Korean young minds to learn the skill-sets that most interest and fit their individual talents.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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