But in recent years Seoul has become an exporter of much more than electrical goods and cars.
Korean music, television, food and video games have become hugely popular across Asia with the term the "Korean wave" dubbed to describe their spread and influence.
An example of that is the music video "Gangnam style" which has had almost 190 million hits on Youtube since its release two months ago.
Presenter: Jim Middleton
Speaker: Jasper Kim, CEO, Asia Pacific Global Research Group.
JASPER KIM: I think we can look at it in two ways, literally what is it and symbolically what is it? I mean literally in Korean, converted into English it means south of the river. And the river is Han River that runs east to west. It basically bifurcates the city of Seoul. And Seoul's a megacity of 10 million people. And the southern part, the Gangnam part, is viewed as an affluent, posh area of the city of Seoul.
So for youngsters they want to be seen in Seoul and they want to hang out in this area Gangnam. So that's what it is geographically. Symbolically it represents wealth and it represents the hip youngsters, the creative class. And entertainers hang out there, and so it is a place to be, in short.
JIM MIDDLETON: Why has this Gangnam Style tune become so significant at this point in Korean history?
JASPER KIM: I think, first of all, it's a real surprise that it became so popular. It wasn't that popular originally when it was released in South Korea. But it received extraordinary attention outside, especially in places like the US, but other places as well.
But I think what it does is we have this person who is an unlikely hero. He is a person that's not dolled up, he doesn't look like a Chipmunks dancer, a Chippendales dancer sorry., and he just looks like the average person; a person who you would see or work with at the office or see on the street. But what he does in the video is miraculous. He transforms into a person who is dancing around hip-hopping around, like he just drank five espresso shots in a row. And he has this energy. And he's dancing, he has this unique horse dance which is very creative and it has these universal beats and synthesiser mix that we haven't really seen before.
But the undertone of it, the invisible side of this song is that it is a satire with synthesisers. Basically what it's talking about is the dichotomy and the inequality of wealth in Korea. And I think that undertone is one that is almost a universal perspective in the era of Occupy Wall Street and so forth. So that is part of the reason why it became so popular, but most of it is because of the unique dancing, creative beats and so forth.
JIM MIDDLETON: I don't want to get too profound about this but what sort of implications does this development have for policy makers in Korea looking, as they look ahead to the next phase of Korean development?
JASPER KIM: I think first I would never have imagined that his video of him dancing around in his horse dance and him hanging out with attractive people and nice cars would have political implications. But I think it might very well.
South Korea is undergoing a huge presidential election process at the end of the year. I think what the politicians are thinking about is, well first, for much of the 2000s it was a boom period. But 2008, it was a bust period and now there is a great recession. But I think the question going forward and running into the elections is the great redistribution. Who should get what type of wealth? Why is there a society of haves and have nots? And how come I am getting paid what I have, but we have a person right next to me who is driving around in a Bentley? Now is my piece of the economic pie fair, is it just? And these are the questions that people think about and therefore politicians will be forced also to think about.
JIM MIDDLETON: You mentioned coffee a moment ago, espresso shots. At one stage in the video Psy talks about coffee and I've read that this is a reference to frivolous young Korean women who crimp on the basic necessities but spend up on accessories and Starbucks coffee and things like that. Is this focused on appearances a new development in Korean society?
JASPER KIM: Yeah, I think if we zoom out a little big, go back in historyIn the 1960s South Korea was one of the poorest countries in the world, equivalent in terms of GDP (Gross Domestic Product) per person to Ghana. But now it's one of the wealthiest countries in the world. In a very short, compressed period of time, in four decades rather than four centuries, Korea has gone from nothing to having almost everything.
And as a result of that it's the people in South Korea are eager to show that they have reached this economic success. And that has led to a culture in part based on conspicuous consumption. So buying fancy cars as Psy's video illustrates, hanging out with attractive looking people who wear brand name clothing and also $5 or $6 coffees, I think it goes up to $10 in certain regions here. And there is a name given to people who spend frivolously in this way. And it's a derogatory term in Korean called doenjang.
JIM MIDDLETON: And what does that mean?
JASPER KIM: And that means basically Korean bean paste. And so Westerners may not see a direct affiliation but Koreans will see that term as meaning well it's a person who just spends frivolously on name brand things to show off to people.
JIM MIDDLETON: Korean exports, Samsung, LG and so on, they have won plaudits internationally. But did you ever think that Korean popular culture, K-Pop especially, would find such a big audience internationally?
JASPER KIM: Well I think the Korean government approached it like its products from Samsung and LG, basically as a manufactured export. So in the 1990s there was funding given to the film industry and also mixed with a little bit of deregulation. But the Korean Wave itself, the way it has taken on across overseas into Asia, I think that was hoped for and it's definitely been attained.
But I think what South Korea is really looking for is an international success, Korean Wave going global. And that particularly means to many South Koreans, the US. And that's why Psy is such a big, controversial issue right now is how did he become so successful?
And I'm sure that as we speak now there will be plenty of big Korean Wave companies trying to emulate that type of success. How do you do it? Well we need some crazy dance, some good looking people and a car.
But I think that is going to be the problem. I think instead of following one successful case and trying to copy and paste that, Korea would benefit by another rule which is basically just be yourself, be an individual. That's what Psy did. He didn't create that video for money, he did it because that was just him, that was his nature. And people picked up on that.
JIM MIDDLETON: I won't ask you to do the horse dance now, maybe on another occasion, but Jasper Kim, thank you very much for talking to us.
JASPER KIM: Thank you so much.