South Korea Keeps Producing Global Hits as Japan's Cool Japan Policy Burns Through 540 Billion Yen

South Korea keeps turning out global hits through K-pop and television dramas, while Japan's Cool Japan policy has accumulated losses of about 540 billion yen. Japanese media say the contrast comes down to one failed principle: choosing where to concentrate.

ITmedia Business Online examined the policy in an article titled “Why South Korea keeps producing global hits while Japan melted away 540 billion yen.” It argued that Cool Japan did not sufficiently select and focus on industries with the strongest competitive prospects.

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Why South Korea keeps producing global hits while Japan melted away 540 billion yen.

Japan established the Cool Japan Fund in 2013 as a public-private vehicle to support the overseas expansion of anime, manga, food and other parts of Japanese culture. About 1.3 trillion yen in public money has reportedly gone into the initiative, but its cumulative deficit has reached roughly 540 billion yen.

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Selection and concentration did not take place.

The publication pointed to investments outside core content industries. Cool Japan invested 14 billion yen in Spiber, a biotechnology fiber venture that later liquidated with about 36 billion yen in debt. It also invested 8 billion yen in theme-park developer Dora and 3.1 billion yen in education platform Rough&Peace Mother, though neither delivered the expected results, according to the report.

The analysis contrasted this with South Korea's concentrated investment in entertainment and cosmetics, sectors aimed at overseas markets. It cited the growth of HYBE, home to BTS and LE SSERAFIM, and Studio Dragon, which has produced internationally successful works through platforms including Netflix. It also linked the difference to the countries' economic structures: South Korea has a smaller population and domestic market, making overseas-oriented industries more important, while Japan's large domestic market supports a wider range of sectors. The article said Japan's preference for distributing public support across more industries and workers may have made strategic concentration harder.

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The problem was that the Cool Japan Fund spread money across various fields, including biotechnology, education and theme parks, rather than content such as anime and manga.