North Korea in 2030: Four scenarios

Based on a scenario planning approach, here are 4 possible North Korean landscapes that could emerge over the next decade. 

I’m going to go out on a limb and guess that fully 100% of the people reading this article here on LinkedIn work for companies with no interest in North Korea whatsoever. It is not a market for you; you have not meticulously worked out a “North Korea strategy”; the country does not figure in your plans in any way at all.

That’s all well and good in 2018.  But what about the future?  It’s very early to say for sure, but after the Singapore summit, it looks like things might change there. The key word here is might.  Compared to how we all thought just a couple of years ago, there is much more uncertainty now about how North Korea might plausibly end up by, say, the year 2030.

This is where scenario planning comes in. Scenario planning is the tool I use to help companies visualize and assess potential alternative futures. Obviously, if you visualize several alternative ways that the future could develop, it is impossible that they will all materialize, but seen from today’s vantage point, one of these ways might indeed prove to be pretty close to what actually happens, so it can be a valuable exercise in order to anticipate any new business landscapes that could evolve.  As each of the landscapes, or scenarios, will be different in some key aspect, they will each present a somewhat different set of opportunities and challenges – ones that these companies would like to be ready for.

So what about North Korea?  I don’t profess to be an expert on the country, but if I wanted to make use of scenario planning’s structured, creative approach to thinking about how it might develop – and how it therefore might become a place your company should be keeping an eye on – here’s how I would go about it. 

I’m oversimplifying the process, but the key step is to identify what the critical uncertainties are that would have the greatest potential impact on how North Korea turns out between now and 2030.  Let’s say that these would boil down to these two: 

First, either the talks that have just started succeed, or they fail. We’re all hoping for success, i.e. a denuclearized Korean peninsula, and peaceful integration of North Korea into the family of prosperous nations. But there’s no guarantee that this is what will happen. Lots of things could go wrong. Failure of the talks would mean, at best, a continuation of the country’s dour status quo, or, at worst, actual confrontation and conflict.

Second, the other big uncertainty affecting the country’s future is the role China decides to play. China could actively help North Korea get on its feet. Or conversely, China could decide that it is not going to get so involved. Perhaps it is under financial pressures of its own and can’t afford to.  Perhaps it sees North Korea drifting more into the orbit of South Korea and ultimately, the West.  For whatever reason, it takes a passive role. 

There may be many other uncertainties that are more critical to North Korea’s future than these two, and certainly many more complex ones. But as a layman I chose these because they seem reasonable and help illustrate the thinking process.

Next, you draw up a matrix based on these two critical uncertainties, which you can see in the accompanying graphic.  Assuming that the uncertainties will play out in one direction or its opposite, you arrive at four quadrants, each of which represents a possible North Korea “landscape” in 2030.  Without going into too much detail, I think those could be:

1. “Beijing lapdog”: Somewhere along the line, the talks have failed. China, having assumed a leadership position all along, is now calling the shots in Pyongyang, and possibly even feeding the country. Kim must do its bidding.
2. “BRI goodies”: The talks have been a success and investment money is pouring into the country from many sources.  Significantly, China incorporates North Korea in its ambitious Belt and Road Initiative and ramps up its infrastructure, fast.
3. “Seoul Jr.”:  The talks have been a success, although China’s attention is elsewhere.  So South Korea steps up, with investment projects and greater economic integration, possibly including a currency unification, with political reunification in the offing.  By 2030 Pyongyang has become an urban growth miracle, heading an increasingly vibrant economy, a true junior partner to its neighbor to the south. 
4. “Armed and dangerous”: This is more or less the same as the status quo through 2017.  Denuclearization talks fail, China has no appetite for keeping Kim propped up, and the country veers back into angry isolation. 

At this point, the objective of the scenario generation exercise (assuming that these four scenarios make some sense – and I emphasize again that they are merely examples, not based on any real know-how) is to assess how well positioned your company is for success in these different landscapes. Would North Korea be an interesting market for you in these scenarios? If so, what products or services could succeed there? What competitive skills would you need to build up? How, and when, would you plan to enter the market? Or what strategy could you envisage that would allow you to benefit from the emergence of these scenarios, without actually committing to entering or investing in North Korea itself? These and many similar questions could help you develop a “North Korea strategy” – and possibly be one step ahead of your competitors.

As I said at the outset, North Korea is probably not on your radar screen at all – and up until today, for good reason. But that doesn’t mean that it will never be worth looking at. And when you look at a new market and try to foresee how it might develop in your favor (or not), a scenario approach is a very sensible way to structure your thinking – whether that new market is North Korea, Northumbria, or North America.