Wayne Arnold

Sorry, Bieber, you can't compete with Psy.

As it crept toward a staggering billion views on YouTube, "Gangnam Style" made history this week when it was crowned the most-watched video of all time. It first showed up on YouTube in July and has now broken the previous record, surpassing teen idol Justin Bieber's song "Baby," which was uploaded in early 2010.

The ascent of "Gangnam Style" was hard to miss. It swept across chat shows, Google corporate events and "Saturday Night Live," and was a popular Halloween costume to boot. That it smashed all viral-video records is noteworthy. On its trends blog, YouTube wrote: "It's been a massive hit at a global level unlike anything we've ever seen before. Each day, "Gangnam Style" is still being watched between 7 and 10 million times."

Still, some may still deem it an internet one-off: a funny dance by a quirky Asian dude and a catchy tune, but not much more.

I would beg to differ. If you dig deeper, it's clear this is no flash in the pan but the latest example of the influence South Korea is having on modern popular culture. I'd argue that Park Jae-sang, or Psy to his friends, and "Gangnam Style" is not an accident, but the result of decades of careful planning, investment and a certain amount of geographical bad luck. These factors have helped propel South Korea into a cultural and economic powerhouse that punches well above its weight, arguably impacting more lives per capita than any other nation.

While Psy's song undoubtedly is one of the most popular examples to reach U.S. shores, K-Pop culture is highly influential. Korea has served in recent years as an impressive exporter of popular bands such as Girls Generation, Wonder Girls and Super Junior, to name a few that have dominated Asian music charts for years. Korean drama "Winter Sonata" has generated revenues of more than $2.7 billion for its writers and the Korean economy.

To provide some context, the Harry Potter franchise is estimated to be worth $15 billion.

You may not have heard of these supergroups nor "Winter Sonata," but when it comes to businesses, we all know South Korean "chaebols" (large, usually family-owned business groups) Samsung, LG, Kia and Hyundai. South Koreans even have a term to describe this surge of Korean entertainment and products on the international stage: "hallyu," or the Korean Wave.

Taking a step back prompts an interesting question. Why does a country of only 50 million people, the majority of whom speak only Korean, have such a large cultural and economic influence? Here are three reasons.

Geography

South Korea was dealt a weak hand. Wedged between three giants -- China, Japan and Russia -- not to mention the "Hermit Kingdom" of North Korea. All of these governments at one time had a negative obsession to try to destroy South Korea's history and culture. These powerful neighbors relied on selling goods to their own markets and eventually reached beyond their domestic consumers. First, Japan rebuilt after the war and created an economic boom that positioned the country as a tech leader. And now, China expands its reach. But South Korea, due to its minnow size, realized early on that its success had to come from outside. Without such a large internal force, it has focused almost entirely on the exterior, nurturing a culture that inherently seeks the global stage. Exporting ideas and products to the world has been its path to success. Hence Samsung TVs on our walls and Hyundai cars on our streets.

Investment

While most countries have been decreasing their spending on infrastructure and the arts (my homeland and the demise of the UK Film Council being a sad case in point), the Korean government was the first nation to invest in high-speed broadband after the 1997 financial crisis, creating a multimedia-obsessed nation. The Ministry of Culture, Sports and Tourism's annual budget next year is $3.5 billion, and it will spend $295 million in promoting the "hallyu" externally. In comparison, the National Endowment for the Arts in the U.S. will spend $146 million in 2012. It is no wonder this has led to the emergence of artists and entertainment that have dominated Asia and, now with Psy, the global scene.

The Underdog

A more subjective reason: The country is very good at creating brands we all like to belong to. While buying a car from Shanghai Motor Company would feel like a slap to Uncle Sam, buying a Hyundai feels green and right on, while a Samsung Galaxy slightly alternative. And while Japan's longer branding history looms large, South Koreans seem attuned to the global soft spot for the little country that could. Korean companies don't threaten; they are easy brands to belong to and so they are becoming the new wave of challenger brands, and we all love those.

Is this all a good thing? Well if our TV sets get sharper, our cars get cleaner, we get to watch more extraordinary films like "Oldboy" and their singers get to entertain us a little more, why not? South Korea, I for one thank you for punching well above your weight and making the world a more interesting place.