Changes in RED
By Kim Jae-heun
Korea is less competitive than many advanced countries based on the number of its major global companies.
According to an analysis released by the Federation of Korean Industries (FKI) on Thursday, only 16 local firms (3.2 percent) have been included in the world’s top 500 companies. It is not a big improvement compared to the 15 companies that made the Fortune Global 500 list last year.
Chinese companies account for the largest number with 136 (27.2 percent), followed by 124 in the United States (24.8 percent), 47 in Japan (9.4 percent), 28 in Germany (5.6 percent), 25 in France (5 percent) and 18 in the United Kingdom (3.6 percent).
Looking at the sales analysis by country, the total revenue of South Korean firms stood at $996.2 billion (1,271.3 trillion won), the lowest among major countries such as the United States ($11.2 trillion), China ($11.1 trillion) and Japan ($2.9 trillion).
South Korea also lacks diversity in its industrial portfolio. The local firms listed in the Fortune 500 are operating in only eight sectors out of 21 in total. It fell short compared to the United States with 19, China with 15, Japan and France with 13 each, Germany with 11 and Britain with eight.
Korean firms are relatively inferior in new industries such as aerospace and healthcare, in particular.
Korea’s leading companies in the export sector also showed a performance gap up to 4.6 times lower compared to the world’s top firms.
In the major industries of electronics and semiconductors, Apple’s sales this year stood at $365.8 billion, which is 1.5 times higher than that of Samsung Electronics’ $244.3 billion. The country’s largest car firm Hyundai Motor’s revenue also recorded $102.8 billion, which is almost three times lower than Volkswagen’s $295.8 billion.
“It is necessary to ease discriminatory regulations against major local companies here in order to foster businesses that can represent the country in the global market,” said Yoo Hwan-ig, deputy secretary general of the industrial research division at FKI.
The U.S. economic magazine Fortune releases its list of the world’s top 500 companies every year based on their sales. The companies listed in Fortune’s Global 500 for 2022 were researched as of the end of 2021.
Source: Korea Times