"Industrial Structure Stagnant for 20 Years"... KCCI, FKI, and KOFOME Launch 'Corporate Growth Forum'

There have been criticisms that over the past 20 years, South Korea's corporate and export structures have stagnated. In contrast, during the same period, the United States experienced a significant transformation in its industrial structure, with the rise of artificial intelligence (AI) and platform companies. Industry representatives have emphasized that in order for companies to regain growth momentum, differentiated regulations must be lifted and policy direction should shift toward growth.

The Korea Chamber of Commerce and Industry, the Federation of Korean Industries, and the Korea Federation of Middle Market Enterprises held a kickoff meeting for the launch of the 'Corporate Growth Forum' at the Chamber of Commerce building in Jung-gu, Seoul, on August 20. They agreed on the need for institutional reform, stating, "Differentiated regulations by company size, which are embedded throughout the legal system, are weakening incentives for corporate growth."

Participants raised concerns by comparing Korea's stagnant corporate structure to that of the United States. Twenty years ago, companies such as ExxonMobil, GE, and Citibank were among the top ten in the U.S., but now most of these have been replaced by new industry leaders like Nvidia, Apple, Amazon, and Alphabet. In contrast, Korea's leading companies-Samsung Electronics, SK, Hyundai Motor, LG, and POSCO-have remained largely unchanged, and the main export items, including semiconductors, automobiles, and ships (a total of eight categories), have also stayed the same, leading to assessments that industrial transformation has been slow.

Attendees unanimously agreed on the urgency of eliminating differentiated regulations. Park Iljun, Executive Vice Chairman of the Korea Chamber of Commerce and Industry, stated, "The government is also showing willingness to address differentiated regulations," adding, "We should prioritize measures that can be implemented through changes to enforcement decrees or rules, and consider allowing exceptions to regulations such as the separation of banking and commerce or the same-person rule for advanced industries."

Kim Youngjoo, a professor at Pusan National University, pointed out, "Not only the Commercial Act, Fair Trade Act, and Capital Markets Act, but also the Financial Holding Companies Act, the Restriction of Special Taxation Act, and the Distribution Industry Development Act contain regulations that impose increasing obligations as companies grow in size."

There were also calls to strengthen the growth ladder for mid-sized companies. Kwak Kwanhoon, President of the Korea Association of Middle Market Enterprises, said, "What mid-sized companies need in the process of growing into large enterprises is deregulation rather than financial support," and suggested, "If high-quality mid-sized companies pursue business diversification, it may be worth considering easing holding company regulations."

Kim Changbeom, Executive Vice Chairman of the Federation of Korean Industries, commented, "It is time to shift the focus of the corporate ecosystem from survival to scaling up," and added, "By expanding the external funding limits for corporate venture capital, sufficient funds should flow to growth-oriented companies." He also stated, "We need to redesign incentive structures so that companies are motivated to grow on their own," emphasizing the need to eliminate discriminatory regulations by company size, ease various financial and tax support disparities, and improve excessive criminal penalties.

Vice Chairman Lee Hojun remarked, "To efficiently allocate limited resources, it is important to take a value-creation-oriented approach to expanding the economic pie," and added, "The method of policy evaluation should shift from simple output-based distribution to outcome-based assessment of what has actually been achieved." He continued, "Policies that limit support to specific groups such as small and medium-sized enterprises may encourage complacency," and stressed, "To ultimately survive in global competition through challenge and innovation, we need to adopt a long-term nurturing policy that views corporate growth as a full cycle-from small to medium, to mid-sized, and then to large enterprises."

In this way, the Corporate Growth Forum reached a consensus on the need to overhaul the regulatory framework and redesign policy support directions in order to restore dynamism to the stagnant corporate ecosystem. Participants plan to officially launch the forum soon, present policy alternatives to the National Assembly and relevant ministries, and continue with a series of research and reports titled 'Creating Superstar Companies.'

This content was produced with the assistance of AI translation services.