By Radu Magdin
Romania has spent three decades learning how to become a functioning capitalist economy. The next decade will demand something considerably harder: learning how to become a competitive one. These are not the same thing, and the difference is about to define us.
The Romanian model after 1989 was, in many respects, an extraordinary success. European integration, foreign investment, entrepreneurial energy, relatively inexpensive skilled labour, access to Western markets and the slow emergence of a Romanian managerial class produced one of Europe’s most impressive convergence stories. In purchasing-power terms, Romanian GDP per capita rose from about 43% of the OECD average in 2004 to 71% in 2024 — one of the fastest catch-up trajectories in the developed world.
But convergence carries its own trap. What works when you are catching up rarely works when you are trying to reach the frontier. Romania must therefore ask an uncomfortable question: what comes after the model that got us here?
A large part of the answer is a capability we have under-built. Call it businesscraft.
If statecraft is the art by which a nation projects strategic power in the world, businesscraft is the art by which its companies learn, adapt and win in international markets. It is not industrial policy, and it is not luck. It is not cheap labour, and it is not a single charismatic founder. It is a repeatable organisational capability: the discipline of studying the world’s best, borrowing intelligently, moving fast, owning something proprietary, and building for international competition by design. A country can host a great deal of competitiveness, as Romania does, without yet producing enough of its own. Businesscraft is how you produce it.
The country that turned businesscraft into a national art form sits 8,000 kilometres east of Bucharest. Not because Romania can become Korea — it cannot, and should not try. But because Korean companies mastered exactly what Romanian companies now need to master: the ability to borrow intelligently, learn rapidly, adapt relentlessly, and eventually compete globally on their own terms. Koreans have a name for this discipline. Tiger Management.
The end of comfortable capitalism
Romanian capitalism grew up in an unusually forgiving era. Globalisation was expanding, European markets integrating, capital cheap, security assumed, supply chains lengthening. Romanian firms could grow at home while multinationals imported capital, technology and managerial practice.
That world is gone. The business environment of the 2020s is defined by polycrisis: geopolitical competition, war on Europe’s borders, demographic decline, technological disruption, artificial intelligence, rising labour costs, energy insecurity, protectionism, and an accelerating contest between the United States, China and Europe over strategic industries.
For Romanian companies, this is a double squeeze. They must become more competitive at home precisely as competing at home grows more expensive — and more capable abroad precisely as foreign markets grow more political. The old advantages — cost, flexibility, inexpensive talent — still matter. They are no longer sufficient.
The numbers mark the turn. Romanian labour productivity grew by an impressive 3.6% a year over two decades, then stalled; in 2024 it actually fell by 1.2%, even as wages accelerated — public-sector pay rose 18.5% in a single year and the minimum wage climbed more than 30% between 2023 and 2024. The OECD’s verdict is blunt: Romania must move from a cost-driven model toward higher-value-added competition built on innovation, technology, skills and business sophistication.
One figure captures the stakes. Foreign-owned firms in Romania generate roughly €45,000 in gross value added per employee; domestic firms, around €24,000. Romania has become very good at hosting competitiveness. Its next task is producing more of it. That is a businesscraft problem — and this is where Korea becomes instructive.
Tiger Management: the world’s great school of businesscraft
The term comes from Martin Hemmert, Professor of International Business at Korea University, in Tiger Management: Korean Companies on World Markets (2012) and its expanded successor, The Evolution of Tiger Management (2018). His central observation is deceptively simple: Korean management is neither American management nor Japanese management with Korean characteristics. It became a distinctive system in its own right.
Korean firms absorbed ideas from Japan, the United States and elsewhere, fused them with Korean institutional and cultural traits, and kept modifying the result as the economy matured. Hemmert identifies its signatures — ambition, aggressiveness, resilience, strong leadership, speed, flexibility — and, crucially, treats Korean success as a combination of strategy, leadership and human-resource practice, not merely industrial policy or the famous chaebol conglomerates.
That distinction is the whole point. The deep Korean lesson is not about Samsung, Hyundai or LG alone. It is about organisational learning. Korea became extraordinarily good at learning from countries and companies that started far ahead of it. American management supplied professional management, marketing, finance, global strategy. Japanese industry supplied manufacturing, quality, production systems, supplier relationships. Korean firms absorbed both — and Koreanised them, producing a hybrid particularly suited to closing enormous gaps with established competitors. The Tiger, in other words, was a learning machine. That is businesscraft in its purest form.
Learn. Adapt. Accelerate.
The most persistent myth about emerging economies is that imitation and innovation are opposites. Korea shows the reverse. Before Korean firms became technology leaders, they became exceptional technology learners — what scholars call absorptive capacity: the organisational ability to spot useful external knowledge, acquire it, assimilate it, and eventually improve on it.
Hyundai is the classic case. The management scholar Linsu Kim documented how it deliberately acquired foreign technology, assimilated it, and built increasingly independent capability — even manufacturing internal crises and stretching targets to force the pace of learning. The sequence is the lesson: import, understand, adapt, improve, export, innovate.
This may be the single most useful Korean idea for Romanian business, which too often swings between two poses. One is provincialism — our market is different, foreign models don’t apply. The other is imitation — McKinsey or Silicon Valley or Germany does it this way, so we must copy exactly. Businesscraft is the third path: steal with your eyes, not with your identity. Study the best obsessively, understand why their systems work, take what fits, reject what doesn’t, fuse it with your own strengths, and build something adapted to your circumstances. That is what Korean capitalism did, over and over.
Ambition as management technology
There is another Korean trait Romanian business could profitably import: disproportionate ambition. Many Korean firms began expanding internationally without the resources, brands or technology of their Western and Japanese rivals. Their goals exceeded their apparent means — and that gap became a management instrument, forcing the company to keep closing the distance between what it was and what it intended to become.
Ambition, in other words, stopped being rhetoric and became organisational pressure. A firm that means to defend its home market optimises differently from one that means to become a global top five. It recruits differently, invests differently, benchmarks differently, tolerates failure differently — and, above all, thinks about time differently.
Romanian capitalism could use far more of this. We have produced excellent entrepreneurs and several genuine internationalisation stories, yet too many successful Romanian firms still treat expansion abroad as an optional second act, attempted only once the domestic business is comfortable. Tiger logic reverses the order: international competitiveness should shape the company before international expansion begins. The question for a Romanian CEO should not be “How do I become number one in Romania?” but “What would my company need to beat the best Polish, German, Turkish, Korean or American firm in this industry?” That small change of question builds a very different organisation.
Speed beats perfection
One element of Tiger Management deserves special attention: speed. Korean corporate culture became famous, sometimes infamous, for ppalli-ppalli — “quickly, quickly.” The dangers are real and should not be romanticised: weak governance, burnout, hierarchical pressure, too little deliberation. But behind the slogan sits a hard competitive truth. Latecomers cannot behave like incumbents. If your rival has more capital, more technology, a stronger brand and better distribution, running the same processes at the same speed merely preserves the gap. The challenger has to compress time — learn faster, decide faster, build faster, correct faster, internationalise faster.
Romanian firms understand improvisational speed instinctively; flexibility is among the underrated strengths of Romanian entrepreneurship. The problem is that this speed often remains informal. A charismatic founder makes the calls, networks solve the problems, employees improvise around the systems. It works beautifully at €10 or €50 million of turnover and becomes dangerous at €500 million. The Romanian Tiger therefore needs something the Korean original never emphasised enough: institutionalised agility. Keep the Romanian flexibility; build Korean execution discipline around it.
Strong leadership — without the succession trap
Tiger Management also rested on powerful leadership. Founders and chairmen wielded extraordinary authority, which enabled fast capital allocation, long-horizon bets and mobilisation around audacious goals. Romanian entrepreneurs will recognise the model instantly, because many of their firms are still founder-centric. That is an enormous asset during entrepreneurial growth — and eventually a constraint.
Here Romania should learn from Korea’s problems as much as from its successes. The chaebol system has drawn persistent criticism for dynastic succession, opaque governance and over-concentrated power, and Korean management scholarship itself now stresses professionalisation and stronger boards. The Romanian Tiger should fuse founder energy with institutional management: the founder supplies ambition, professional management supplies scalability, boards supply challenge, data supplies accountability, succession supplies continuity. The aim is not to weaken strong leadership but to stop strong leadership from curdling into organisational dependency.
From cheap labour to expensive intelligence
The next Romanian model must also accept something psychologically difficult: Romania is losing one of the advantages that powered its rise — cheapness. That is, in truth, good news; rising wages are a purpose of development, not a failure of it. But firms built on inexpensive labour eventually hit an unforgiving arithmetic: salaries converge faster than organisational productivity. Romania is at that point now, with pay growth outrunning productivity and price competitiveness eroding.
The answer cannot be to keep Romanians cheap. It must be to make Romanian companies more valuable — to move from labour arbitrage to knowledge arbitrage; from subcontracting to products; from products to brands; from implementation to intellectual property; from local distribution to international platforms; from imported technology to adapted and finally proprietary technology. Korea climbed versions of exactly this staircase, from low-cost production and imitation to sophisticated manufacturing and frontier industries — and the research is clear that imitation was not a detour from innovation but the training that made innovation possible.
Romanian managers should internalise the corollary. You do not need to invent everything. But you eventually need to own something — a technology, a brand, a distribution network, a process, a dataset, a patent, a customer relationship, a capability rivals struggle to reproduce. The strategic question is therefore simple, and every CEO and investor should be able to answer it in one sentence: what does my company know or control that the world will pay a premium for?
Seven disciplines of Romanian businesscraft
Romania should not import Korean management wholesale. The Korean model grew from a particular history, culture and geopolitics; Romania is an EU democracy inside the Single Market and NATO, with different institutions, demographics and corporate structures. But mutatis mutandis, the principles travel. I would define a Romanian businesscraft — a New Romanian Tiger — around seven disciplines.
Ambition beyond the domestic market. Every serious mid-sized Romanian firm should ask whether it can become a regional champion; every regional champion, whether it can become European; every European one, where it can become global.
Institutionalised learning. Benchmark global leaders systematically, not as the occasional conference visit. A management team should be able to say exactly why the world’s best five competitors outperform it.
Adaptive imitation. Borrow aggressively but intelligently. The goal is not originality for its own sake; it is advantage. Take American scale thinking, German process discipline, Japanese quality, Korean speed, Israeli innovation, Nordic governance — whatever works — and Romanianise it.
Execution speed. Move strategy out of PowerPoint and into operating rhythm: shorter decision cycles, clearer ownership, faster experiments, earlier termination of what is failing.
Talent intensity. A company climbing the value chain cannot treat people as administration. Recruiting, leadership development, international exposure and succession become strategic functions.
Ownership of intellectual capital. Every firm should name the proprietary asset it intends to accumulate over the next decade — not just factories and buildings, but knowledge, technology, brands, networks, data.
Internationalisation by design. Stop treating exports as selling Romanian products abroad. Real internationalisation means understanding another market well enough to compete almost as intelligently as a local — which takes local teams, partnerships, acquisitions, political intelligence, cultural adaptation and patience.
Businesscraft needs statecraft
There is a final Korean lesson no company can implement alone. Successful international firms live inside ecosystems. Korea’s rise involved unusually close — and sometimes unhealthy — relationships between government, finance and industry, in which export performance, technological upgrading and industrial capability became matters of national strategy.
Romania cannot and should not reproduce the authoritarian developmental state of 1960s Korea. But the alternative cannot be an economic philosophy in which state and business politely ignore each other. This is where the two crafts meet. Businesscraft is what companies do; statecraft is what the state does — and in today’s world the boundary between them has collapsed. Washington does industrial policy. Beijing does industrial policy. Brussels increasingly does industrial policy. Wars, semiconductors, energy, AI, critical minerals, defence manufacturing and supply-chain resilience have demolished the neat line between economics and geopolitics.
Romania therefore needs a more sophisticated conversation between the state and its companies — not favouritism, not oligarchy, not subsidy without accountability, but strategic economic statecraft. Which Romanian sectors could realistically become internationally competitive? Where can European financing build lasting capability rather than temporary consumption? Which firms could become regional champions? Where could defence spending seed dual-use technological ecosystems? How can universities connect to industry, and Romanian diplomacy support Romanian commercial expansion? And, above all: what do we want Romania to be exceptionally good at in 2040? These are no longer abstract policy questions. They are competitiveness questions — the point where a nation’s businesscraft and its statecraft either reinforce each other or fail together.
From convergence to conquest
Romania’s first capitalist generation had an extraordinary mission: build companies, create markets, attract capital, learn capitalism, integrate into Europe. That mission is largely accomplished. The next generation has a harder assignment: build institutions, raise productivity, own technology, create brands, export capital, internationalise Romanian firms — compete. The shift is from convergence to competitiveness and, where Romanian companies hold genuine advantages, from competitiveness to the conquest of international market share. It is worth remembering that Romania has already quietly tripled its share of European exports, from 0.5% in 2005 to 1.4% in 2024. Taking share is not a fantasy. It is a track record waiting to be scaled.
This is why South Korea matters. Its greatest lesson is not Samsung or shipbuilding or semiconductors. It is a mentality. Korea looked at economies far richer and companies far stronger than its own and decided the gap was not permanent. It studied them, borrowed from them, adapted what it borrowed, worked faster, invested longer, failed repeatedly, learned relentlessly — and eventually stopped following.
Romania starts from a far stronger position than Korea did: European institutions, access to the world’s largest single market, sophisticated entrepreneurs, excellent technical talent, a large diaspora, NATO security and real geopolitical weight on Europe’s eastern flank. But advantages are only potential until management converts them into capability. That conversion has a name.
Romania does not need Korean management in a copy-paste operation. But it can be inspired by it. Romania Inc. needs its own businesscraft: outward-looking but locally rooted, ambitious but pragmatic, fast but increasingly institutional, comfortable borrowing ideas but determined to eventually produce its own. The Romanian capitalism of the last thirty years proved we could catch up. The Romanian capitalism of the next thirty must prove something harder — that we can compete at the front.
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