Under @mmpiatkowski’s post comparing Poland 🇵🇱 and South Korea 🇰🇷, there was a surprisingly large number of salty Korean replies: “Poland is just Europe’s version of Vietnam”, “its productivity is an optical illusion due to R&D by foreign companies”, “if we were located in Europe, we would have smashed the heads of Western Europe”. The post was hardly meant to diminish Korea’s success IMO. A lot of it is simply wrong. Yet it is worth exploring how the two countries got to the same place in very different ways. 1. East Asian vs post-communist development model Korea is a textbook case of the East Asian model, pioneered by Japan and later followed by China: suppressed consumption created high savings, which were funnelled into investment through state-directed credit to build domestic industrial champions. In its catch-up decades Korea also bought foreign technology on a massive scale and ran large current-account deficits, with investment peaking close to 40% of GDP in the early 1990s. Even today it invests around 30% of GDP, against 17-20% in Poland. Korean households consume 48% of GDP, Polish ones 57%. Koreans save and invest far more of what they earn; Poles spend more. Poland instead opened up to foreign investment and plugged into European, largely German, supply chains, importing technology through foreign firms. So yes, the “foreign companies” point has something to it. But crucially, neither country could have taken the other’s path. Korea industrialised from scratch, with no rich single market next door and no EU funds. Equally, after 1989, and certainly inside the EU, state-directed credit, capital controls and protected industries were off the table for Poland. The two simply responded to very different conditions. 2. Korean juggernauts attached to a much less productive economy Korea indeed produces world-renowned tech mega-corporations with massive innovation output. But the rest of the economy lags far behind. Business services employ 41% of Korean workers, yet a service worker is less than half as productive (48%) as a manufacturing worker. In Poland, they are more productive (115%). The same split shows up by firm size. SMEs employ 80% of Korean workers, but their productivity is only 44% of that of large firms, one of the widest gaps in the OECD (Poland 58%, OECD average 65%). Samsung alone accounts for roughly a quarter of all business R&D in Korea. This concentration is also reflected in Korea’s low number of so-called hidden champions (mid-sized world market leaders): Poland has 37, Korea 22. Per person, that’s 0.96 vs 0.42 per million. Both are tiny next to Germany’s 19 per million. Poland and post-communist Europe certainly need more homegrown champions, many of which are already growing, and more R&D to keep converging. But they will hardly match Korea’s R&D spending, which no country in Europe, nor the US, comes close to. And their champions will look more like the German Mittelstand than Samsung: inside a single market, not every country needs its own Samsung; that is the point of the model. So far, it has delivered the same productivity with less investment, more consumption and an arguably more balanced economy, which may yet prove the more efficient path. None of this diminishes Korea’s achievement: rising from poverty to the technological frontier largely on its own is one of the great economic stories of the last century.