More Big Businesses, More Room to Breathe

In our economy, the share occupied by large corporations is lower than in other advanced countries. It is less than half the level of Anglo-American countries and also lower than that of neighboring Japan. Some people assume that the share of large corporations must be high because we have global companies like Samsung, but in many areas of daily life the presence of large corporations is limited, creating economic and social problems.

As the number of large corporations increases, that reflects improved competitiveness, and many areas can be improved in ways that align with global standards. Outdated labor culture can be reformed, and our way of life can become freer and more relaxed. This is because as corporate management and competitiveness become more advanced, the quality of working life improves and workers can enjoy greater leisure in life.

There are still many sectors without large corporations. This is especially true in agriculture and fisheries and in services. The financial sector, meanwhile, is run more like a public enterprise: it may be large in scale, but it is not being operated like a large corporation. Most of these are sectors subject to heavy regulation, government protection policies, and control. We need to examine why large corporations are not emerging and improve the flawed systems that prevent them from doing so.

The most effective way to grow into large corporations is through engagement with global markets. Global competitiveness is gained through competition in the world market. Large corporations created artificially by the government are unlikely to be competitive. Nor is it easy to secure such competitiveness through protectionist or support policies.

Economic growth rises through the achievements made as companies grow into large corporations. It is difficult to expect high economic growth when no new large corporations are emerging. If there are areas where new firms are blocked from entering and capital investment is constrained, those barriers should be removed and companies should be allowed to compete. As a result, large corporations can emerge and economic growth can be achieved.

Capital and labor can work together to generate income. Large corporations, in particular, are the result of using capital effectively, so they benefit workers, investors, and managers alike. An increase in capital raises workers’ labor productivity and income, while also delivering greater returns to investors.

Large corporations create a trickle-down effect throughout society. The way our society as a whole has improved because of the presence of large corporations such as Samsung and Hyundai Motor is a good example of this. More quality jobs are created, and the income they generate revitalizes local communities and related commercial districts. Society as a whole becomes brighter and more transparent, enabling individuals to pursue a more comfortable life.

A comparison with underdeveloped countries that lack large corporations makes this trickle-down effect even clearer. In such countries, people face not only a lack of economic prosperity but also miserable working conditions and poverty.

What our society needs more is quality jobs and stability in life. This is possible through large corporations, because the jobs they provide make such stable, prosperous, and comfortable lives possible. Just as workers in advanced countries enjoy that kind of ease, our society too can increase good jobs through large corporations and move toward a more prosperous life. We must improve the institutional environment so that more large corporations can emerge.

Sung-no Choi, President, Center for Free Enterprise (CFE)

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Original title: 대기업 늘려야 삶의 여유 는다

Author: Sung-no Choi

Date: 2023-11-01

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=3&idx=26111