Middle Age
The decrease in global competitiveness of South Korea’s major industries that have sustained the nation’s economy, including the electronics, automobile, construction, and chemical industries, has accelerated across all sectors after the financial crisis.
According to LG Research Institute and industry sources on Aug. 26, domestic companies have seen drops in sales for two years in a row and rates of return this year, showing a slump in business performance. It is true that the global business environment is deteriorating overall, including a recession in the manufacturing industry. However, Korean companies’ businesses are weakening at a faster pace.
The fact can be confirmed in the global competitiveness index from Thomson Reuters, the world's leading source of intelligent information for businesses and professionals. According to Thomson Reuters, 182 Korean companies were included in the top global 5,000 company list last year. The figure is dropped 14 from 196 in 2004. Also, the rate of return of Korean firms stood at 2.3 percent, down 1.3 percent from 3.6 percent 10 years ago, among top global 5,000 companies.
The global competitiveness of Korean companies by industry has even worsened. The decrease in South Korean key industries, which has led the nation’s economic development, has shown across the board.
Electronics and automobiles, which are Korea’s key export industries, moved down to 11th and 12th place in terms of global growth last year from the fourth and sixth spots of 2004. The construction and chemical industries also fell from seventh place to 10th and 13th position, respectively, while the steel, distribution, and service industries dropped from fifth, ninth, and fifth position in 2014 to the ninth, 12th and 13th spots last year. In the comprehensive rankings, which combine growth, profitability, and market share, all industries back down, the electronics falling from fourth to ninth, automobiles from fourth to 15th, construction from 12th to 15th, chemicals from 11th to 13th, steel from seventh to 11th, distribution from sixth to 11th, and the service industry from 13th to 15th.
In contrast, China, which has recently shown low growth, has seen the biggest increase in the global competitiveness of businesses in the past decade. In the top global 5,000 firms list, 720 Chinese firms made the list last year, more than double from 308 in 2004, ranked third following the U.S. and Japan. The ratio of sales of Chinese companies also rapidly increased from 2.6 percent in 2004 to 11.8 percent last year, while the ratio of profits surged from 3.9 percent to 11 percent.
With the rapid growth of China, the U.S. has seen its 1262 companies making the list of the top 5,000 global firms last year, inching up from 1183 in 2004.