Choi Tae-won, the Chairman of the Korea Chamber of Commerce and Industry (KCCI), delivered a keynote speech on the 4th at the launch ceremony of the Business Growth Forum held at the Sapphire Ballroom of Lotte Hotel in Jung-gu, Seoul. The event was co-hosted by KCCI, the Korea Employers Federation, and the Association of High Potential Enterprises of Korea.
In his speech, Choi stated, “In the past, during periods of rapid growth, it was considered good policy to support small businesses and somewhat restrain large corporations by imposing regulations based on business size. That approach was suitable in the past but doesn’t apply today. At present, with growth stagnant, imposing such regulations means no one can achieve growth.”
Chairman Choi, who also serves as Chairman of SK, stressed the necessity of creating an economic engine that can sustain growth rates of 3% to 5%. He emphasized the need to support companies that are growing regardless of their size and pointed out that the absence of the thought ‘we must grow’ due to regulatory constraints is a fundamental reason for the decline in private sector vitality. He also presented a large panel listing 343 regulations.
According to the results of the “survey of differential regulations” conducted and announced by KCCI and a research team led by Professor Kim Young-joo of Busan National University, South Korea has 343 differential regulations across 12 economic-related laws. Such regulations increase as a company’s size grows. When a small company becomes a medium-sized enterprise, it faces 94 regulations, and this number jumps to 329 when it becomes a large corporation.
This results in a paradoxical structure where the benefits for a company diminish as it grows, with an increase in regulations. It was pointed out that these regulations are an obstacle to business growth. Data presented at the forum indicated that from 2020 to 2023, the rate at which small businesses transitioned to medium-sized enterprises was a mere 0.04%, and the rate at which medium-sized enterprises became large corporations was 1.4%.
The forum highlighted concerns from the business sector that “the stepwise growth-suppressing regulations embedded in legislation and economic penalties diminish entrepreneurial drive, which should serve as an incentive for growth.” It was suggested that the system should be reformed to provide incentives and corresponding rewards to growth-oriented companies.