Industries for smaller players to be chosen

A semi-government committee on mutual growth said it will select in August the industries conglomerates would be discouraged from entering or expanding in to give their smaller counterparts more opportunities.

At their meeting in Seoul, the members, led by former Prime Minister Chung Un-chan, said for now, they have confirmed the selection guidelines and will be choosing the industries based on how they promote the efficiency of the program, how suitable they are for smaller players, how effective they would be in preventing side-effects and promote the competitiveness of smaller companies.

But the committee decided against limiting the industries to those with worth between 100 billion won ($93.3 million) and 1.5 trillion won, or where fewer than 10 small and mid-sized firms are operating.

The committee will start receiving recommendations about which industries to choose by next month.

The move to better protect smaller players comes as the government takes strong initiatives to level out the playing field in the corporate sector.

Choosing industries where conglomerates would not be welcome is a revisit of a similar system for protecting the smaller business players that was phased out in 2006, and it faces as much criticism and protest from the bigger companies.

Chairman Chung, however, on Friday said “we need to push forward,” adding that mutual growth between large and small companies cannot be pursued with campaigns and events, indicating the committee will try to put some teeth behind its slogans.

A similar program was ended in 2006 due to side-effects, such as weakening competitiveness and less-than-satisfactory customer services.

But there are also reasons to see more campaigns to protect smaller players, industry watchers said, citing that larger companies are expanding too fast and too wide.

As of April 1, the nation’s 10 largest companies saw a 57 percent increase in their assets compared to three years earlier.

By Kim Ji-hyun (jemmie@heraldcorp.com)