South Korea's Lack of Young, Innovative Businesses Slowly Pushes Country Out of List of Globally Competitive Companies
South Korean companies are losing its grip on Financial Times' Global 500, an annual list of the world's biggest companies in a given year. In 2015, South Korea showed its most lackluster performance since 2001.
Only Samsung Electronics, SK Hynix, Hyundai and Korea Electronic Power Corporation (KEPCO) were included in this year's Global 500 list. South Korea's representatives are down to four from 2006 and 2009, during which nine companies got in.
According to Chosun Ilbo, analysts say the global competitiveness among Korea firms is dwindling due to their satisfaction with their current achievements in the local market, thus making the companies lax when it comes to developing new overseas ventures.
The LG Economic Research Institute also explained that the diminishing appeal of Korean businesses can be attributed to their age. A study showed that the average age of Korean companies in the list increased from 32.9 years in 2005 to 37.8 in 2015, indicating a lack of new, innovative firms and groundbreakers that can compete in the international arena.
"At a time when young and innovative businesses are taking the world by storm armed with new business models, Korean companies will quickly lose ground if they cannot keep themselves from aging and losing their cutting-edge skills," Kang Seung Hoon of the LG Economic Research Institute said.
Business Korea noted on Mar. 26, 2014 that the number of global South Korean companies remained the same in the last decade, which means the growth rate of local businesses is slower than those in China, India, Russia and Brazil.
Meanwhile, the United States and China soared high in terms of having the most number of companies included in the Global 500. China's number jumped from eight in 2007 to 37 companies in 2015, putting the country second to the U.S., which dominated the ranks with 209 listed firms.
Financial Times' Global 500 list is based on market capitalization.
