"Tesla and SpaceX led by Elon Musk are classic examples of "disruptive innovation." Musk is a genius who sees innovations others cannot, staking his entire fortune and taking on every risk in an unknown world where no one knows the right answer."
Jang Se-jin, Lim Kim San chaired professor at the National University of Singapore (NUS) and an authority on comparative management in Korea, Japan and China, offered a clear diagnosis using the orthodox methods of comparative management on "why Korea's conglomerates beat Japan but cannot pull off Musk-style disruptive innovation." Jang said, "Musk's success is not only about individual genius but a product of a system that combines a U.S. social ecosystem tolerant of failure with clear financial rewards," adding, "In Korea, it is difficult for innovation-driven leaders to emerge due to an education system that raises the average, a severe tilt toward medical schools, and structural limits that block bold resource allocation." He also said, "It is a mistaken analogy to cite Musk's concentration of control to justify third- and fourth-generation succession among Korea's chaebol families," emphasizing, "Musk should be compared to first-generation Korean founders who created something out of nothing."
Jang said that in businesses with extreme uncertainty, the strong decisions and breakthrough drive of a single founder are superior to collective intelligence. He added, "There is hope for Korean society only if there are young people who choose engineering over their parents' advice and dare to say they will change the world," and suggested, "Korea needs serious reflection at the national level on the reality that smart talent is leaving for Silicon Valley to avoid regulations." Jang retired from the Korea Advanced Institute of Science and Technology (KAIST) in Feb. and, after staying in Singapore, briefly returned to Korea for this interview.
How does the recent trajectory of Tesla and SpaceX under Musk differ compared with the past rivalry between Samsung and Sony?
"If the past rivalry between Sony and Samsung was about which technological paradigm to adopt during the shift from analog to digital, Musk's Tesla and SpaceX are classic cases of "disruptive innovation." Musk is a genius who sees disruptive innovations others cannot. Existing electric-vehicle makers kept failing as they tried to develop high-capacity batteries from scratch. Musk, by contrast, showed a distinct vision by linking 8,000 cylindrical laptop batteries from Panasonic to power a car. The strategy was excellent, too. Traditional EVs started with low-cost compact cars, which angered consumers due to short range. Musk did the opposite, targeting the wealthy, who own multiple cars and thus are less affected by short range, and approached with a "luxury sports car (Model S)."
SpaceX is the same. It completely smashed the bureaucratic, high-expense monopoly system centered on the National Aeronautics and Space Administration (NASA). With the innovative idea of reusing rockets, it dramatically lowered launch expense, and it achieved commercial innovation by connecting this to satellite businesses like Starlink."
Should Musk be seen as "individual genius," or as a "product of the American system"?
"Geniuses statistically appear about one in a hundred. So Korea surely has geniuses like Musk. The problem is that Korea fails to recognize them and does not give them a chance. It was possible because it was the United States. The presence of abundant software talent in Silicon Valley, venture capital willing to invest boldly, and above all a social ecosystem that tolerates failure allowed someone like Musk to emerge. If Musk had not come to the United States and had stayed in his hometown of South Africa, he would never have achieved today's success."
What in Korea's education or social structure prevents figures like Musk from emerging?
"Korea's social culture, education and economic systems overall are set up in ways that make it hard to produce innovation-driven leaders. First, the philosophy of the education system is different. Education in Korea and Japan is a system that raises the overall average, while U.S. education is a "system that increases variance." The United States allows both very poor performers and outstanding performers to emerge at the same time and gives clear opportunities to standout geniuses. Second, there is a severe tilt toward medical schools. The fact that the most outstanding talent heads not to engineering but to medicine or law is an enormous national and social waste. The tilt toward medical school that arose because vision and prospects disappeared in science, technology and engineering inevitably becomes a major obstacle to innovation.
On the other hand, innovation emerges where there is little regulation. K-pop is a good example. The reason innovators keep emerging in K-pop is that this industry was not initially a mainstay of the national economy or society. Thanks to limited government regulation, people with unique abilities could develop their talents to the fullest from early on."
What is needed for Korean companies to move beyond the "fast follower" model and achieve a paradigm shift?
"Within Korea's current system, there are broadly two strategic alternatives. First is a "low-risk strategy that focuses on what we do well." If we cannot become like the United States, then focus on what we are good at now: manufacturing, components and the arms industry (K-defense). In these fields, organizational strength and worker diligence matter more than a single person's genius, and they have in fact succeeded. Second is a "high-risk strategy that changes the system itself." This means completely overhauling the education system and shifting laterally to new capabilities, but that involves wrecking existing competitiveness and rebuilding from the ground up, so the risk is excessively high. A representative case is Sony, which declared a shift from hardware to software and then suffered through roughly 20 years of dark times. Samsung Electronics' recent crisis also stems from this structural limit. Because legacy memory semiconductors are so strong, corporate resources and talent gravitate there. To grow system semiconductors (non-memory) or foundry, you must push ahead while accepting at least 10 years of deficits and losses, but under the current structure such bold resource allocation is difficult."
Many worry about Musk's concentration of one-man, monopolistic power. How does this compare with the concentration of power and third- to fourth-generation succession in Korea's chaebol families?
"It is entirely the wrong analogy to compare Musk's concentration of power with third- or fourth-generation chaebol heads in Korea. Musk should be compared to first-generation Korean founders like Chung Ju-yung and Lee Byung-chul, who created something out of nothing. First-generation founders also wielded total control over their companies like Musk, and they worked like mad, eating and sleeping at the factory. The fundamental reason for the so-called "Korea discount" in the stock market is the statistical law of regression to the mean. A founder may be an exceptional genius, but by the second and third generations, capabilities tend to become merely average. Personally, Samsung Chairman Lee Jae-yong is also a very average person as a manager. Giving someone with average ability absolute power just because they belong to a chaebol family naturally leads the market to apply a discount."
Musk demands 80-hour workweeks from employees and shrugs off SpaceX rocket explosions. How can the two factors of harsh labor and tolerance for failure operate at the same time?
"Founders are fundamentally tenacious. Frankly, there is no startup that thrives on just 52 hours of work a week. In the United States, such harsh personnel practices are possible because there is enormous financial compensation (stock options). The clear reward that success can make you tremendously wealthy moves people. The investment culture's view of failure is also completely different from Korea's. This is the concept of so-called "failure accounting." Early-stage investment in the U.S. is led not by individual investors but by billionaire angel investors who think in portfolio terms. They know well that even if seven out of 10 companies they invest in fail, they can recover their entire investment and make a huge amount of money if just one or two hit it big. So even when a multibillion-won rocket explodes in midair in a major failure, they can acknowledge and accept it as a process of accumulating data for the next success."
Management theory values "collective intelligence" and mutual checks through boards. Can Musk's one-man governance keep outperforming collective intelligence?
"Collective intelligence is very advantageous for incremental improvements that steadily refine existing businesses. But when blazing a completely new trail under extreme uncertainty, as in the early days of SpaceX or Tesla, collective intelligence does not function. In an unknown world where no one knows the right answer, even dozens of smart people debating day and night cannot reach a conclusion. They try to avoid taking risks. In the end, only a single "founder" who can stake their entire fortune and personally bear all the risks can make the call and lead the organization. In the face of extreme uncertainty, the powerful breakthrough force of one-man governance is necessary."
Since the acquisition of Twitter (now X), Musk's political remarks and eccentric behavior have intensified, fueling criticism over "CEO risk." How do you assess his qualities as a manager?
"It is clearly inappropriate and a source of risk to the company that Musk repeatedly makes political statements on social media and engages in impulsive behavior, wasting energy. But even within the U.S. system, no one can control him. From an investor's perspective, you can only choose for yourself whether to "bet on this mad genius or not." Even so, Musk is an excellent manager. He is not merely a dreamer who only knows technology. He is someone who proved on the ground his ability to improve productivity and manage crises, such as removing conveyor belts at Tesla factories and efficiently coordinating the placement of robots and people. I see a very bright outlook for the synergy that will appear when Musk's artificial intelligence (AI) capabilities combine with SpaceX's space infrastructure."
What message does the "Musk phenomenon" send to Korean society today?
"There is hope for Korean society only if young people come forward who boldly refuse when their parents tell them to pursue a stable path to medical school, instead enter engineering, and say, "I will change the world like Elon Musk." These days, because Korea's regulations and environment make starting a business so tough, more smart people in their 20s are going straight to Silicon Valley in the United States to start companies. Looking at the lives of those who take on the challenge, they are very smart and deserve congratulations. But at the national level of Korea, which is losing its talent, we must think deeply about whether we can really call this success and be pleased."
Amid Elon Musk's solo run, the diverse leadership styles of global corporate leaders are drawing attention. If Musk is an icon of disruptive innovation who shakes entire industrial systems across multiple fields by taking on high risk, other chieftains trace distinctly different trajectories.