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Economic Report

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The Economics of English

The Economics of English

JEON Hyo-Chan

Nov. 20, 2006

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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.

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