Samsung's massive spending should boost 'innovative growth'
Samsung Electronics unveiled a much-anticipated investment and employment plan Wednesday. The tech giant will spend 180 trillion won ($161 billion) and hire 40,000 workers over the next three years, helping to reinvigorate the sluggish economy and develop new growth engines for both Samsung and Korea Inc.
Above all, the plan surprised the public with its scale, doubling the number of directly recruited employees from the original 20,000, and raising annual investment from 40 trillion won to 60 trillion won. Also, Samsung is focusing most of its expenditure on industries related to future growth, such as biotechnology and artificial intelligence, in sync with the government's slogan of "innovative growth."
The announcement came at the right time, too. The Korean economy has been on a downward spiral, as shown by sluggish growth and job creation. There is agonizingly little the government can do, however. It can neither lower the interest rate nor expand fiscal spending beyond certain limits.
Samsung's massive spending reminds us of the decisive role business giants can play in the national economy. The public often tends to harbor anti-business sentiment, forgetting businesses' contribution to growth in the form of investment, employment, exports, tax payments and innovation.
However, it is regrettable that the announcement gives the impression of businesses yielding to government demands. The plan came just two days after Strategy and Finance Minister Kim Dong-yeon visited Samsung's chip-making plant in Pyeongtaek, south of Seoul. Needless to say it is corporations that should make investment and employment plans according to their own needs and strategies, not because of coercion by policymakers.
Corporate investment at the government's behest often leads to overlapping and wasteful spending. Other major chaebol _ Hyundai Motor, SK, LG and Shinsegae groups _ have already announced investment plans after their owners met with Kim, President Moon Jae-in's economic czar. Nor was it natural for the Samsung Group's headquarters to announce its subsidiaries' investment plans, revealing its fleet-type management is still in operation.
It is desirable for family-controlled conglomerates to contribute to economic growth through investment and employment. That does not mean, however, the government should overlook chaebol's unfair practices, including their heavy-handed handling of subcontractors. Chaebol reform should continue _ for both chaebol themselves and the national economy.
Samsung Electronics unveiled a much-anticipated investment and employment plan Wednesday. The tech giant will spend 180 trillion won ($161 billion) and hire 40,000 workers over the next three years, helping to reinvigorate the sluggish economy and develop new growth engines for both Samsung and Korea Inc.
Above all, the plan surprised the public with its scale, doubling the number of directly recruited employees from the original 20,000, and raising annual investment from 40 trillion won to 60 trillion won. Also, Samsung is focusing most of its expenditure on industries related to future growth, such as biotechnology and artificial intelligence, in sync with the government's slogan of "innovative growth."
The announcement came at the right time, too. The Korean economy has been on a downward spiral, as shown by sluggish growth and job creation. There is agonizingly little the government can do, however. It can neither lower the interest rate nor expand fiscal spending beyond certain limits.
Samsung's massive spending reminds us of the decisive role business giants can play in the national economy. The public often tends to harbor anti-business sentiment, forgetting businesses' contribution to growth in the form of investment, employment, exports, tax payments and innovation.
However, it is regrettable that the announcement gives the impression of businesses yielding to government demands. The plan came just two days after Strategy and Finance Minister Kim Dong-yeon visited Samsung's chip-making plant in Pyeongtaek, south of Seoul. Needless to say it is corporations that should make investment and employment plans according to their own needs and strategies, not because of coercion by policymakers.
Corporate investment at the government's behest often leads to overlapping and wasteful spending. Other major chaebol _ Hyundai Motor, SK, LG and Shinsegae groups _ have already announced investment plans after their owners met with Kim, President Moon Jae-in's economic czar. Nor was it natural for the Samsung Group's headquarters to announce its subsidiaries' investment plans, revealing its fleet-type management is still in operation.
It is desirable for family-controlled conglomerates to contribute to economic growth through investment and employment. That does not mean, however, the government should overlook chaebol's unfair practices, including their heavy-handed handling of subcontractors. Chaebol reform should continue _ for both chaebol themselves and the national economy.
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