Can South Korea’s untouchable chaebols change?

Summary

Chaebols, South Korea's family-run conglomerates like Samsung, Hyundai, and LG, have played a pivotal role in transforming the nation's economy from poverty in the 1960s to a global export powerhouse. Despite their economic dominance, accounting for nearly 60% of South Korea's GDP, these entities face criticism and calls for reform due to high-profile scandals and controversies. The government's support for startups and the rise of new industries like smart mobility are seen as potential drivers for change, with a growing sentiment against the traditional chaebol structure and its impact on the economy.

Takeaways

• 🤝 Chaebols are large South Korean conglomerates, often run by a single family, with total assets exceeding 5 trillion won.
• 📈 Over 80 chaebols exist in South Korea, with the top 10 accounting for nearly 60% of the country's GDP in 2021.
• 🌏 Chaebols have played a significant role in transforming South Korea's economy from poverty in the 1960s to a major global exporter.
• 📢 There is a growing call for change and innovation within chaebols to continue propelling South Korea forward.
• 🔊 High-profile scandals and controversies have been associated with chaebols, affecting their international reputation.
• 💡 The Korean government's Heavy-Chemical Industry Drive in the 1970s laid the foundation for the growth of chaebols.
• 📊 South Korea's GDP saw a monumental increase from less than $4 billion in 1960 to almost $67 billion by 1979.
• 🛠️ The Korea Fair Trade Commission was established in 1981 to regulate economic competition and address monopolistic practices.
• 🚀 Startups in South Korea are gaining momentum, with a 12% growth in non-real estate startups between 2020 and 2023.
• 🌱 The Korean government is encouraging the growth of green companies to meet carbon reduction goals and create jobs.
• 🌐 Globally, there are successful multi-generational family businesses that have transformed and adapted to modern times, like IBM, Ford, and Porsche.

Q & A

What is a chaebol?

A chaebol is a large South Korean conglomerate, typically run by a single family, with extensive business interests and assets exceeding 5 trillion won.

How many chaebols are there in South Korea as of 2023?

There are more than 80 chaebols in South Korea in 2023.

What percentage of South Korea's GDP did the top 10 chaebols account for in 2021?

The top 10 chaebols accounted for almost 60% of South Korea's GDP in 2021.

What was the first manufactured item by a South Korean chaebol?

The first manufactured item by a South Korean chaebol was a wig, exported to someone in New York.

Which sectors were selected for government subsidies under Park Chung-Hee's plan to pull South Korea out of poverty?

The sectors selected for government subsidies were electronics, shipbuilding, machinery, petrochemicals, and non-ferrous metals.

What was the GDP of South Korea in 1960 and how did it change by 1979?

In 1960, South Korea's GDP was less than $4 billion, and by 1979, it had jumped to almost $67 billion.

When was the Korea Fair Trade Commission established?

The Korea Fair Trade Commission was established in 1981.

How has the startup scene in South Korea evolved between 2020 and 2023?

Between 2020 and 2023, the number of non-real estate startups in South Korea grew by 12% to more than 581,000 companies.

What are some recent South Korean startups that have gained international recognition?

Recent South Korean startups that have gained international recognition include messaging platform Kakao and e-commerce website Coupang.

What is the role of the Korea Fair Trade Commission?

The Korea Fair Trade Commission is the country's regulatory authority for economic competition, ensuring fair business practices and preventing monopolies.

What are some challenges faced by chaebols in terms of public perception and internal practices?

Chaebols face challenges such as high-profile scandals, controversies, and anti-chaebol sentiment fueled by corruption and financial scandals involving their leaders. Additionally, there are internal challenges like maintaining family succession and adapting to modern business practices.