KCCI Inaugurates ‘Corporate Growth Forum’ in Cooperation with Other Organizations

Dignitaries, including Deputy Prime Minister-MOEF Minister Koo Yun-cheol, Chmn. Chey Tae-won of the Chamber of Commerce and Industry, Minister of Employment and Labor Kim Young-hoon, and Vice Minister Moon Shin-hak of the Ministry of Trade, Industry and Energy, attend a ceremony to inaugurate the Corporate Growth Forum at Lotte Hotel in Jung-gu, Seoul, on Sept. 4. (Photo: KCCI)

As the growth of Korea’s corporate ecosystem has declined, economic growth has dwindled.

The gate for corporate growth has narrowed substantially and is now akin to “a hole in a needle,” findings showed.

Economic organizations have joined forces to slash more than 343 regulations and penalties, which have accompanied corporate growth. To this end, they have launched the Corporate Growth Forum.

The Korea Chamber of Commerce and Industry (KCCI), the Federation of Korean Industries and the Federation of Middle Market Enterprises of Korea (FOMEK) jointly held a ceremony to inaugurate the Corporate Growth Forum at Lotte Hotel in Jung-gu, Seoul, on Sept. 4.

Economic circles claimed that entrepreneurship, a growth incentive, has no choice but to subside due to growth-suppressing restrictions and regulations on economic development.

They shared the view that there has to be institutional reform a shift in which growing companies are given incentives and corresponding rewards.

Among some 30 people from the private, government, political, academic and research circles on hand at the event were KCCI Chmn. Chey Tae-won, FKI Executive Vice Chmn. Kim Chang-beom, KOMEK Executive Vice Chmn. Lee Ho-joon, Deputy Prime Minister-MOEF Minister Koo Yun-cheol, Minister of Employment and Labor Kim Young-hoon, Vice Minister Moon Shin-hak of the Ministry of Trade, Industry and Energy, Chmn. Jin Ok-dong of Shinhan Financial Group, Chmn. Yang Jong-hee of KB Financial Group, Chmn. Ham Young-joo of Hana Financial Group, Chmn. Yim Jong-yong of Woori Financial Group, Samsung Electronics President Park Seung-hee, Chmn. Lee Hyung-hee of SK Communications Committee, Senior Executive Vice President Kim Dong-wook of Hyundai Motor, Senior Executive Vice President Park Joon-sung of LG, Senior Executive Vice President Lim Sung-bok of Lotte Holdings, YG-1 President Song Si-han, Chmn. Oh Won-suk of Korea Fuel-Tech Corp., President Song Seung-heon of McKinsey Korea, KIET President Kwon Nam-hoon, Chmn. Kim Se-wan of the Korea Capital Market Institute, and Chmn. Kwak Kwan-hoon of Korean Academy of High Potential Enterprises.

In his key-note speech, KCCI Chmn. Chey said, “Today’s topic is growth, and we have a problem.” “Korea is praised to be a country that has so far carried out economic growth and democratization in a superb fashion, and it is our matter of pride.

From now on, it is an issue in which we have to make it so, but the problem facing us is that we do not grow,” he said.

The two issues could have synergetic effects, but they could be in conflict and cause contradiction on the other hand, and the fundamental reason is quietly different in terms of measurement, Chmn. Chey said.

Chmn. Chey said the nation is approaching almost zero growth, and there appears to be no change in the government’s contribution, but vigor from the private sector has declined.

He cited the stagnation of Korea’s economic growth, caused by declining dynamics of the private sector, saying that four in 10,000 SMEs grow to middle market enterprises while one or two out of100 middle market companies go up to large-sized ones.

Chmn. Chey stressed the need to create an economic force so that the nation grows at least 3 percent to 5 percent annually.

He demanded that restrictions limiting growth be lifted on top of provisions of support for growing companies.

Such an approach of encouraging SMEs and middle market companies to become middle market firms and large-sized ones, respectively, and rewarding growing companies would achieve both economic growth and democratization.

He noted that companies are reluctant to grow into large-sized anchor companies as they are faced with risks since most support is given to SMEs and middle market enterprises.

Chmn. Chey showed three large panels, reaching from the ground to the ceiling, to depict 343 restrictions facing companies.

KCCI is worried about a decline in the overall corporate growth rate.

Figures released the same day showed that large-sized companies saw annual average sales growth stand at 10 percent only 20 to 30 years ago, but the figure plummeted to an annual average of 2.6 percent, or one-fourth, in the past decade.

SMEs saw their corresponding figure drop from up to 9 percent down to 5.4 percent.

Experts are demanding the government enact growth-oriented policies to spur corporate growth, departing from declining support, citing the growth difference among small- and large-sized companies during the most recent high growth period.

KCCI called for a corporate policy paradigm shift, citing the creation of the ecosystem for companies wanting to grow.

Participants came up with a variety of policy proposals, including rewarding growing companies regardless of whether they are an SME, middle market or large-sized company.

In a lecture, President Song of McKinsey Korea said the nation is predicted to growth 0.9 percent this year with a potential growth rate expected to approach zero growth soon.

He took issue with the current Korean corporate environment, in which entrepreneurship cannot be nurtured. He cited a structural issue in which the upside is small and the downside is big, so business leaders are more likely to evade rick.