Conglomerates nurture growth engines at fastest pace in decade: FKI survey

The signboard of the Federation of Korean Industries (FKI) is seen at the main entrance of its headquarters in Seoul. Korea Times file

By Yi Whan-woo

Korea's major conglomerates nurtured future growth engines at the fastest pace in a decade between 2020 and 2021, amid the COVID-19 pandemic, which has prompted greater reliance on digital technology.

According to a survey recently released by the Federation of Korean Industries (FKI), 70 ― or 23.6 percent ― of the 297 affiliates set up by the large business groups from May 2020 to April of this year were related to renewables, virtual and augmented realities, next-generation networks, big data and other future industries.

All surveyed companies had assets valued at 5 trillion won ($4.21 billion) or more.

The 2020-21 rate was higher than those in each of the preceding nine years, including 13.7 percent during the April 2011-March 2012 period, 9.8 percent during the April 2014-March 15 period and 23 percent during the May 2017-April 2018 period.

The increase in the number of the aforementioned affiliates was especially distinctive before and after the outbreak of the COVID-19 pandemic. A total of 30 companies were founded during the pandemic.

“The result shows that the conglomerates, after relying on traditional businesses for decades, are becoming more agile in adapting to the Fourth Industrial Revolution and to sustainable development,” FKI said.

By industries, virtual and augmented realities-related businesses expanded fastest in the past year, seeing the creation of 32 companies.

Big data and renewable energies saw the establishment of 25 companies, respectively, while next-generation networks and high-tech materials had 24, respectively, customized healthcare, 23, next-generation pharmaceuticals, 21 and artificial intelligence, 20.

In the 10 years combined, 132 companies have been trading in renewable energies, 111 in virtual and augmented realities, 110 in next-generation networks, 103 in big data and 95 in high-tech materials.