Call for Collaboration Between Large and Small-Sized Firms

Pending economic issues with FKI business leaders

Minister of Knowledge Economy (MKE) Choi Kyung-hwan urged business leaders to advance the industrial structure of the software industry and promote coexistence and collaboration between large- and small-sized companies.Minister Choi made the remarks during a dinner hosted by the Federation of Korean Industries (FKI) at the Lotte Hotel on May 12. Choi said, “Major economic indexes on investment, exports and employment show signs of an economic turnaround, so chances are high that Korea will attain 5 percent growth.” He discussed the pending major economic issues with business leaders, saying that the Korean economy is entering a full-fledged growth phase and close collaboration between government and business circles is needed to help the Korean economy evolve into a more advanced economy.
The FKI leaders said domestic investments and exports have played major roles in turning around the economy and the global economy has continued to maintain a more than 1 percent growth rate in each quarter, but they cautioned that there could be an “optical illusion” stemming from the effects of last year’s low growth. Given such unfavorable external uncertainties as Greece’s request for relief funds and China’s possible belt-tightening policies as well as a surge in household debts, vulnerable repayment of debts and other domestic economic conditions, they said, the government should stick to such policies as the ones to ease restrictions.
Among those business leaders on hand at the dinner were FKI Chairman S.K. Cho; SK Chairman Chey Tae-won; Daelim Group Chairman Lee Joon-yong; POSCO Chairman Chung Jun-yang; and Lotte Vice Chairman Shin Dong-bin.
FKI Chairman Cho said the national economy was faring well with a 7.8 percent growth rate and a more than 30 percent surge in exports ― an encouraging sign to business circles ― and business leaders appreciated the MKE’s introduction of temporary tax credits on investments. The problem is that labor-management relations have yet to be stabilized, and the government has set up room for business circles to concentrate on business by introducing the time-off system, a ceiling for paying employees assigned to their unions, he said.
Minister Choi said Korean and foreign evaluations indicated that Korea was one of the OECD economies recovering from the global financial crisis. The government was put on alert and did its best, and in particular, Korean businessmen made a remarkable showing, thus contributing to enhancing the national standing dramatically. Companies in advanced countries were stumbling about what to do, whereas Korean concerns were taking more aggressive approaches, and they saw their global market shares in such areas as semiconductors, automobiles and handsets rise due to the improving recognition of Korean-made products, he said.
There were signs of improving economic indexes, including the employment market, but it was true that there were many worries, Choi said. “The truth was that the Korean economy has strong fundamentals and the nation could do better than any other countries and the government will strive to make more efforts to creates an environment conducive for doing business,” he continued. The government is devoting itself to nurturing future growth engines and it recruited Hwang Chang-kyu, a former Samsung Electronics president in the semiconductor division as the nation’s chief technology officer to overhaul the R&D sector.
The government is working on enacting a law on boosting the convergence of industries, as a variety of legal and institutional sector-by-sector barriers fail to follow the market changes and the speed of converging industrial technologies.
The minister called for business leaders to promote collaboration with smaller business partners, saying the standing and image of products can be downgraded overnight as was the case with Toyota, struggling with massive recalls due to faulty automotive parts and tainted fame. nw

Minister of Knowledge Economy Choi Kyung-hwan speaks at a dinner with business leaders from the Federation of Korean Industries at the Lotte Hotel in Seoul on May 20.