The 10 largest conglomerates pocketed a massive 41 percent of the total revenue of the manufacturing industry in the past five years, the largest portion ever, showing the ever growing dominance of a handful of chaebols against Seoul’s pursuit for shared growth.
More than half of listed manufacturing stocks here belong to the 10 largest conglomerates by assets, data from the Korea Exchange and Statistics Korea showed.
The report on chaebol dominance came at a time when the government is focusing its policy more on reducing disparities between the haves and the have-nots and between small firms and large business groups.
Manufacturing, still the backbone of Asia’s fourth largest economy, generated approximately 1,840 trillion won in the past five years, up 53.8 percent from 1,196 trillion won in 2005. Sales at the top 10 chaebol groups grew 83.5 percent to 756 trillion won in the same period while other smaller players posted only 38.3 percent in revenue increases on average.
“The big players have been advancing into numerous industries traditionally filled by only mom-and-pop stores which made things difficult for smaller players to grow,” Kim Woo-chan, a research fellow at Korea Development Institute said.
“Their assets grew sharply especially after the ceiling on share ownership was abolished in 2007,” he said.
Promoting broader-based growth and wide diffusion of wealth has been the Lee Myung-bak administration’s priority policy. Lee on Aug. 15 underlined the importance of shared growth between large and small companies in his Liberation Day speech. The Federation of Korean Industries, the largest business lobby group here, pledged their cooperation.
“The business community will do its part in expanding investment and creating jobs in particular for co-development, while taking the lead to achieve shared growth between large and small companies,” it said in a statement.
