On April 4th, at the Lotte Hotel in Jung-gu, Seoul, Choi Tae-won, the Chairman of the Korea Chamber of Commerce and Industry and head of SK Group, delivered a critical keynote address at the launch ceremony of the Business Growth Forum. In his speech, Choi issued a stark warning about the current trajectory of the South Korean economy, which he noted is approaching a growth rate of zero percent. He emphasized the urgent need for regulatory reform, stating, “If we do not ease regulations, there will be no economic growth.”
Choi’s address was marked by a visual display of three large panels densely filled with various regulations, illustrating the complex and often burdensome nature of the regulatory environment facing businesses in South Korea. He argued that while differentiated regulations for businesses based on their size made sense in the past, particularly to support small enterprises while managing larger corporations, the current economic climate has rendered such an approach ineffective.
The Business Growth Forum, organized in collaboration with leading economic organizations including the Korea Economic Association and the Korea Federation of Small and Medium Businesses, aims to address the restrictive regulations that are stifling the vitality of the economy and provide expert recommendations for policy alternatives. Choi pointed out that over the past three decades, the private sector has contributed 8.8% to economic growth, in stark contrast to the government’s mere 0.6%. He expressed concern that only four out of every 10,000 small businesses transition to become medium-sized firms, and even fewer make the leap to become large corporations. He attributed this stagnation to the negative impact of increasing regulations, suggesting that businesses conclude it is more advantageous to remain small rather than pursue growth, often leading them to either split their enterprises or refrain from expanding.
A joint study conducted by the Korea Chamber of Commerce and Industry and a research team led by Professor Kim Young-joo from Pusan National University revealed a staggering 343 regulations differentiated by company size among just 12 economic-related laws. The study found that transitioning from a small to a medium-sized enterprise incurs 94 additional regulations, while the leap to a large enterprise results in an increase of 329 regulations. Choi’s presentation of the panels underscored the overwhelming regulatory landscape that businesses face, serving as a visual representation of the challenges inhibiting economic progress.
Choi stressed the necessity of creating mechanisms that would enable the economy to sustain a growth rate of 3% to 5%. He advocated for the removal of discriminatory regulations, but clarified that this should not entail the complete elimination of regulations. Instead, he proposed a system that rewards companies based on their performance, which could encourage innovation and growth. Drawing parallels to the export-led growth era, Choi noted that incentives were provided to firms that met their export targets, suggesting that similar strategies could be employed to foster the emergence of large corporations. He reiterated that nurturing the growth of large enterprises is crucial for revitalizing the economy and achieving sustainable growth.
[관련기사] https://n.news.naver.com/mnews/article/021/0002734210?sid=101
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