The Korea Times
amn_close.png
amn_bl.png
National
  • Politics
  • Foreign Affairs
  • Multicultural Community
  • Defense
  • Environment & Animals
  • Law & Crime
  • Society
  • Health & Science
amn_bl.png
Business
  • Tech
  • Bio
  • Companies
amn_bl.png
Finance
  • Companies
  • Economy
  • Markets
  • Cryptocurrency
amn_bl.png
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to President
  • Letter to the Editor
amn_bl.png
Lifestyle
  • Travel & Food
  • Trends
  • People & Events
  • Books
  • Around Town
  • Fortune Telling
amn_bl.png
Entertainment & Arts
  • K-pop
  • Films
  • Shows & Dramas
  • Music
  • Theater & Others
amn_bl.png
Sports
amn_bl.png
World
  • SCMP
  • Asia
amn_bl.png
Video
  • Korean Storytellers
  • POPKORN
  • Culture
  • People
  • News
amn_bl.png
Photos
  • Photo News
  • Darkroom
amn_NK.png amn_DR.png amn_LK.png amn_LE.png
  • bt_fb_on_2022.svgbt_fb_over_2022.svg
  • bt_twitter_on_2022.svgbt_twitter_over_2022.svg
  • bt_youtube_on_2022.svgbt_youtube_over_2022.svg
  • bt_instagram_on_2022.svgbt_instagram_over_2022.svg
The Korea Times
amn_close.png
amn_bl.png
National
  • Politics
  • Foreign Affairs
  • Multicultural Community
  • Defense
  • Environment & Animals
  • Law & Crime
  • Society
  • Health & Science
amn_bl.png
Business
  • Tech
  • Bio
  • Companies
amn_bl.png
Finance
  • Companies
  • Economy
  • Markets
  • Cryptocurrency
amn_bl.png
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to President
  • Letter to the Editor
amn_bl.png
Lifestyle
  • Travel & Food
  • Trends
  • People & Events
  • Books
  • Around Town
  • Fortune Telling
amn_bl.png
Entertainment & Arts
  • K-pop
  • Films
  • Shows & Dramas
  • Music
  • Theater & Others
amn_bl.png
Sports
amn_bl.png
World
  • SCMP
  • Asia
amn_bl.png
Video
  • Korean Storytellers
  • POPKORN
  • Culture
  • People
  • News
amn_bl.png
Photos
  • Photo News
  • Darkroom
amn_NK.png amn_DR.png amn_LK.png amn_LE.png
  • bt_fb_on_2022.svgbt_fb_over_2022.svg
  • bt_twitter_on_2022.svgbt_twitter_over_2022.svg
  • bt_youtube_on_2022.svgbt_youtube_over_2022.svg
  • bt_instagram_on_2022.svgbt_instagram_over_2022.svg
  • Login
  • Register
  • Login
  • Register
  • The Korea Times
  • search
  • all menu
  • Login
  • Subscribe
  • Photos
  • Video
  • World
  • Sports
  • Opinion
  • Entertainment & Art
  • Lifestyle
  • Finance
  • Business
  • National
  • North Korea
  • 1

    Kim Da-mi, Jeon So-nee team up for coming-of-age film 'Soulmate'

  • 3

    Park Hyung-sik to play crown prince in tvN series 'Our Blooming Youth'

  • 5

    SM to introduce multi-production system to increase business capabilities

  • 7

    Plan to construct new memorial center for ex-president faces backlash

  • 9

    First lady expands presence in domestic politics

  • 11

    'Ant-Man 3' promises bigger, better action with same family dynamic: cast

  • 13

    Able C&C sale attracts dozens of potential buyers

  • 15

    Seoul to discuss reforming free transportation benefits for seniors

  • 17

    Naver 2022 net profit down 96% on one-off factor

  • 19

    Britain's trade with N. Korea more than doubles last year: report

  • 2

    Teens feel peer pressure to buy luxury goods endorsed by K-pop stars

  • 4

    Itaewon tragedy's bereaved families harassed by far-right protesters

  • 6

    Too many emergency text alerts? Gov't to halt daily COVID-19 notifications

  • 8

    Discussions on raising age for free subway rides gain momentum

  • 10

    Ex-justice minister gets 2-year prison term for academic irregularities surrounding family

  • 12

    Apple Pay can be launched in Korea: financial regulator

  • 14

    FSC OKs Apple Pay to be available in Korea

  • 16

    Yoon's office to press charges over report on fortune teller

  • 18

    Naver to roll out conversational AI service

  • 20

    SEMICON Korea defies chip industry downturn

Close scrollclosebutton

Close for 24 hours

Open
  • The Korea Times
  • search
  • all menu
  • Login
  • Subscribe
  • Photos
  • Video
  • World
  • Sports
  • Opinion
  • Entertainment & Art
  • Lifestyle
  • Finance
  • Business
  • National
  • North Korea
Finance
  • Companies
  • Economy
  • Markets
  • Cryptocurrency
Sun, February 5, 2023 | 01:20
Economy
'No hope for domestic-oriented firms'
Posted : 2014-01-03 17:28
Updated : 2014-01-03 17:28
Print PreviewPrint Preview
Font Size UpFont Size Up
Font Size DownFont Size Down
  • facebook
  • twitter
  • kakaolink
  • whatsapp
  • reddit
  • mailto
  • link
Korean economy on course toward rebound on back of global recovery

Analysts talk about economic issues of Korea and the world in a roundtable discussion held by The Korea Times at Dalgaebi restaurant in central Seoul. They are, from left, Park Sung-wook, director of the Macroeconomic & International Finance Division from the Korea Institute of Finance; Jung Sung-chun, research fellow at the Korea Institute for InternationalEconomic Policy's Department of International Economy; and Shin Min-yong, head of the Economic Research Department at the LG Economic Research Institute. / Korea Times photo by Shim Hyun-chul

Analysts talk about economic issues of Korea and the world in a roundtable discussion held by The Korea Times at Dalgaebi restaurant in central Seoul. They are, from left, Park Sung-wook, director of the Macroeconomic & International Finance Division from the Korea Institute of Finance; Jung Sung-chun, research fellow at the Korea Institute for International
Economic Policy's Department of International Economy; and Shin Min-yong, head of the Economic Research Department at the LG Economic Research Institute. / Korea Times photo by Shim Hyun-chul

Analysts talk about economic issues of Korea and the world in a roundtable discussion held by The Korea Times at Dalgaebi restaurant in central Seoul. They are, from left, Park Sung-wook, director of the Macroeconomic & International Finance Division from the Korea Institute of Finance; Jung Sung-chun, research fellow at the Korea Institute for InternationalEconomic Policy's Department of International Economy; and Shin Min-yong, head of the Economic Research Department at the LG Economic Research Institute. / Korea Times photo by Shim Hyun-chul
By Na Jeong-ju

Korean conglomerates must develop their global sales network instead of competing with smaller firms in the domestic market, economists said.

During a roundtable discussion recently arranged by The Korea Times, they said there is no hope for domestic-oriented conglomerates in this era of global competition.

"Globalization is no longer a matter of choice for chaebol. They should go abroad," said Shin Min-yong, a senior researcher at the LG Economic Research Institute. "Most of the firms are still complacent with their leading positions in the domestic market. That's not good for them as well as Korea's economy. They must see the much bigger markets out there."

Park Sung-wook, director of the Macroeconomic & International Finance Division from the Korea Institute of Finance, said chaebol firms have become an obstacle for the growth of promising small companies.

"It's difficult for a small firm to compete in the domestic market being dominated by chaebol. They are stifling growth of small players," said Park. "Under the current circumstances, it's impossible for a small firm to become a company like Apple here. The first step to address this is to give firms equal opportunities and remove the barriers posed by chaebol."

Park said Samsung cannot make another Samsung.

"We need to establish a system in which any firm can become a company like Samsung. Of course we need to help Samsung compete better internationally, but it's a different matter if a small firm cannot grow because of Samsung," he said.

Jung Sung-chun, research fellow at the Korea Institute for International Economic Policy's Department of International Economy, agreed.

Analysts talk about economic issues of Korea and the world in a roundtable discussion held by The Korea Times at Dalgaebi restaurant in central Seoul. They are, from left, Park Sung-wook, director of the Macroeconomic & International Finance Division from the Korea Institute of Finance; Jung Sung-chun, research fellow at the Korea Institute for InternationalEconomic Policy's Department of International Economy; and Shin Min-yong, head of the Economic Research Department at the LG Economic Research Institute. / Korea Times photo by Shim Hyun-chul
"It's meaningless for chaebol to compete in a saturated domestic market," Jung said. "It's time for them to set up globalization strategies with a long-term perspective instead of competing with small players here for squeezed margins. That's a matter of the country's economic future."

Shin said conglomerates that rely on domestic demand for growth, such as Lotte, will have to face harsh reality.

"We can divide chaebol into two types ― globalized ones and stagnant ones," Shin said. "Look at Samsung and Hyundai Motor. They are selling goods to international consumers. LG is expanding globalization plans because it knew that's the way it must go for survival. But there are still many more firms that don't take this situation very seriously."


Globalization for survival


A recent data on economic performances of chaebol suggests the gap between globalized firms and domestic-oriented firms are widening fast.

According to the Bank of Korea, Samsung Electronics and the two automakers of Hyundai Motor Group ― Hyundai Motor and Kia Motors ― accounted for more than a quarter of the combined net profit of about 460,000 Korean companies in 2012.

The three firms reaped combined earnings of 24.8 trillion won ($23.4 billion) in 2012, which was about 28.6 percent of the 86.6 trillion won earned by 464,425 enterprises.

The combined net profit of the firms excluding Samsung, Hyundai and Kia fell 33.9 percent from 93.5 trillion won in 2010 to 61.8 trillion won in 2012. In contrast, the three's earnings rose 36.8 percent from 18.1 trillion won to 24.8 trillion won during the same period.

Jung said Korean conglomerates can compete better than small firms on the global stage.

"Competing with global players requires a lot of capital and brand power. In this sense, conglomerates are better positioned than small firms to expand overseas markets," Jung said. "Small firms should be given opportunities to grow in the domestic market, and then compete internationally. That's how the country's economic power grows."

Park said conglomerates tend to take the government's preferential tax rates or electric consumption charges for them for granted.

"These benefits were offered to firms to spur exports and rapid industrialization. However, that doesn't mean they should be given special treatment forever," Park said. "There will be a huge backlash from firms if the government scraps all these benefits. However, it must do so eventually because it violates fair competition."

Shin said the government's another big job is to make chaebol's governance structure more transparent.

"One of the easiest ways of making money is to get exclusive business licenses from the government. That's how the oil and mobile phone industries have grown here," Shin said. "These firms didn't have to compete. They didn't have to raise their competitiveness and revamp their governance systems. This poses a big challenge for Korea's globalization."

Emailjj@koreatimes.co.kr Article ListMore articles by this reporter
 
Top 10 Stories
1Teens feel peer pressure to buy luxury goods endorsed by K-pop stars Teens feel peer pressure to buy luxury goods endorsed by K-pop stars
2Itaewon tragedy's bereaved families harassed by far-right protesters Itaewon tragedy's bereaved families harassed by far-right protesters
3Too many emergency text alerts? Gov't to halt daily COVID-19 notifications Too many emergency text alerts? Gov't to halt daily COVID-19 notifications
4Plan to construct new memorial center for ex-president faces backlash Plan to construct new memorial center for ex-president faces backlash
5Discussions on raising age for free subway rides gain momentum Discussions on raising age for free subway rides gain momentum
6First lady expands presence in domestic politics First lady expands presence in domestic politics
7Able C&C sale attracts dozens of potential buyers Able C&C sale attracts dozens of potential buyers
8FSC OKs Apple Pay to be available in Korea FSC OKs Apple Pay to be available in Korea
9Naver to roll out conversational AI service Naver to roll out conversational AI service
10SEMICON Korea defies chip industry downturn SEMICON Korea defies chip industry downturn
Top 5 Entertainment News
1Kim Da-mi, Jeon So-nee team up for coming-of-age film 'Soulmate' Kim Da-mi, Jeon So-nee team up for coming-of-age film 'Soulmate'
2Park Hyung-sik to play crown prince in tvN series 'Our Blooming Youth' Park Hyung-sik to play crown prince in tvN series 'Our Blooming Youth'
3'Ant-Man 3' promises bigger, better action with same family dynamic: cast 'Ant-Man 3' promises bigger, better action with same family dynamic: cast
4[INTERVIEW] Disney+ 'Big Bet' director on portraying greed and desire INTERVIEWDisney+ 'Big Bet' director on portraying greed and desire
5TXT, Le Sserafim top Oricon album and singles chart TXT, Le Sserafim top Oricon album and singles chart
DARKROOM
  • Nepal plane crash

    Nepal plane crash

  • Brazil capital uprising

    Brazil capital uprising

  • Happy New Year 2023

    Happy New Year 2023

  • World Cup 2022 Final - Argentina vs France

    World Cup 2022 Final - Argentina vs France

  • World Cup 2022 France vs Morocco

    World Cup 2022 France vs Morocco

CEO & Publisher : Oh Young-jin
Digital News Email : webmaster@koreatimes.co.kr
Tel : 02-724-2114
Online newspaper registration No : 서울,아52844
Date of registration : 2020.02.05
Masthead : The Korea Times
Copyright © koreatimes.co.kr. All rights reserved.
  • About Us
  • Introduction
  • History
  • Contact Us
  • Products & Services
  • Subscribe
  • E-paper
  • RSS Service
  • Content Sales
  • Site Map
  • Policy
  • Code of Ethics
  • Ombudsman
  • Privacy Statement
  • Terms of Service
  • Copyright Policy
  • Family Site
  • Hankook Ilbo
  • Dongwha Group