ⓒ Big Hit Entertainment

K-pop sensation BTS has topped the Billboard Hot 100 main singles chart for the second consecutive week with its latest hit “Dynamite,” through which the boy band hopes to console fans under stress during the COVID-19 pandemic. BTS became the first-ever Korean singer or group to make it to No.1 on the chart. Out of 43 hit songs, including those of Michael Jackson, which debuted on top of the Billboard Hot 100 chart, “Dynamite” is the 20th to have stayed atop the chart in its second week. Indeed, BTS has rewritten the history of K-pop.

Here is Lee In-chul, director of the Real Good Economic Institute, to examine the potential economic ripple effects of BTS’ phenomenal success.

In a report published jointly by the Ministry of Culture, Sports and Tourism and its affiliate Korea Culture and Tourism Institute, BTS’ conquest of the Billboard Hot 100 chart is estimated to generate 1.2 trillion won in terms of production-inducing effects and 480 billion won in added value. Overall, the economic effect is expected to reach 1.7 trillion won, which is roughly 1.5 billion US dollars.

Thanks to the feat, exports of related consumer goods, such as cosmetics, foodstuffs and clothing are forecast to increase by 312 million dollars. The group’s achievement is also expected to create nearly eight thousand jobs. The result is based on the analysis of the sales volume of BTS’ agency, Big Hit Entertainment, statistics from the Korea Customs Service and the Bank of Korea, and the Google Trends data.

Global sales of “Dynamite” are estimated at 245.7 billion won or about 207 million US dollars, based on revenue from BTS’ previous album “Map of the Soul: Persona,” which topped the Billboard 200 in 2019. The numbers did not take into account revenue from offline concerts but included income from one online concert, reflecting the COVID-19 situation. On top of the direct sales, BTS’ success has a tremendous industrial impact as well.

The economic effect of BTS’ new song on production, added value and employment will be enormous. According to a study by Hyundai Research Institute, when the popularity of BTS increases by one percentage point, based on the search volume in Google Trends, Korean exports of cosmetics rise 0.72 percentage points, while those of food and clothing go up 0.45 and 0.18 percentage points, respectively.

Given the analysis, BTS will likely contribute to increasing overseas sales of cosmetics by 276 billion won, food by 74 billion won and clothing by 21 billion won. Their production-inducing effects are tallied at 595 billion won, 178 billion won and 40 billion won, respectively.

But the study did not consider the potential impact on the Korean tourism industry, such as a rise in the number of foreign tourists visiting Korea, as the pandemic has restricted overseas travel.

Considering BTS’ future concert tours, the effect of drawing foreign tourists and the enhanced brand image of Korea, the economic effect of BTS’ topping the Billboard Hot 100 will likely far exceed the recent estimate of 1.5 billion dollars.

BTS started its activities in earnest in 2014 and took the entire world by storm in October 2019, promoting the image of South Korea worldwide. According to a report released by the Korean Foundation for International Cultural Exchange, nearly 800-thousand foreigners have visited South Korea for BTS-motivated reasons every year. BTS is estimated to have been responsible for 7.6 percent of the total of foreign tourists who visit South Korea. The group’s annual production inducement effect is estimated at 3.6 billion dollars, with its added value inducement effect projected at 1.2 billion dollars.

Meanwhile, on September 8, K-pop girl group Blackpink ranked 13th on the Billboard Hot 100 with its latest single “Ice Cream.” With this accomplishment, it rose to a new career-high and took the highest position in the influential music chart as a Korean girl band. Blackpink made it into the chart with the songs “Sour Candy” and “How You Like that” earlier this year. According to Billboard, Blackpink is the first girl band to put three consecutive songs on the chart’s top-40 since American girl group Fifth Harmony in 2016.

The economic effect generated by K-pop singers or groups will be even greater, in line with their stellar performances on the global stage. Encouraged by the remarkable growth of Korean cultural content, as seen in BTS, Blackpink and the Oscar-winning film “Parasite,” South Korea took tenth place in the 2020 Global Innovation Index announced by the World Intellectual Property Organization on September 2.

No doubt, the film “Parasite,” as well as BTS, clearly demonstrated the power of South Korean cultural content. South Korea climbed up one notch to 10th in the Global Innovation Index from last year. It is the first time for Korea to be in the top 10. The ranking is the second-highest in Asia, after Singapore placed in eighth. Korea remained the same at 10th in “Innovation Input,” but rose from 13th to 10th in “Innovation Output.”

In the field of “Creative Goods and Services,” in particular, South Korea moved up a whopping 23 spots to 19th from 42nd. This indicates that the country’s cultural industry has made remarkable progress.

The Global Innovation Index was introduced in 2007. Its purpose is to measure countries’ innovation capability, which is an important element in economic development, so it can provide countries with the information needed to devise effective public policies and business strategies.

This year, South Korea has made it to the top ten in the index, reflecting that its consistent efforts to enhance global competitiveness have borne fruit. Indisputably, much of the credit should go to South Korean pop music, dramas and movies.

South Korea’s cultural industry’s output accounted for 3.7 percent of its GDP in 2000, but the figure rose to 5 percent last year. That is, the portion of the cultural industry in the economy is becoming larger. For the industry to move on to the next level, analysts say that it is necessary to strengthen the competitiveness of cultural content platforms.

Hyundai Research Institute says that South Korea’s cultural industry is the seventh-largest in the world and that the industry’s intellectual property presence is expanding on the back of the strong global fandom of hallyu or Korean pop culture.

For tools to contend with, the institute points out that Korea lacks in globally-competitive content platforms like Netflix and that labor productivity in the cultural industry is rather low. To develop hallyu into an industrial trend, and not just cultural content, it is necessary to make greater research efforts and expand overseas marketing further.

The Ministry of Culture, Sports and Tourism says it published the report in order to show the huge economic effect of BTS’ conquering Billboard’s benchmark chart. But it also says that the group’s achievement goes far beyond the numbers. In fact, the economic effect of 1.5 billion dollars is a conservative estimate. Moreover, you can’t just put a price on BTS’ music that has comforted and healed so many people suffering from COVID-19. We’re looking forward to another legend to be created by BTS and its positive effect on the Korean economy.