[25 Years of Drastic Changes in the Business World] The Great Shift in Major Corporation Rankings... Revealing the Direction for South Korea's Economy

Looking into the Top 10 Large Corporations from 1997 to 2022

"Now is the time for all of us to tighten our belts once again and share the pain to overcome the crisis, rather than blaming or holding anyone responsible."

This is a snippet from the national address delivered by then-President Kim Young-sam on November 22, 1997, when South Korea applied for a bailout from the International Monetary Fund (IMF). Since then, 25 years have passed, and although our economy has recovered from the foreign exchange crisis, many companies fell into and rose from the quagmire of insolvency, leading to a shift in the leadership of the business world. The industrial center of gravity has moved from manufacturing to digital and knowledge industries. Companies that responded proactively to social demands and future growth industries survived, while those that did not were left behind. Changes in corporate rankings are evidence of the rise and fall of industries.

According to the Fair Trade Commission’s Corporate Group Portal on the 9th, among the top 10 large business groups that have maintained their rankings for 25 years since 1997, when statistics became available after the introduction of the Large Business Group System (1986), are Samsung, SK, Hyundai Motor, LG, Lotte, Hanwha, GS (after split), and Hyundai Heavy Industries (after split). Half of the names listed in the top 30 large business groups in 1997 have now disappeared into the annals of history. The three groups that were among the top 10 at the time?Daewoo, Ssangyong, and Kia?were either merged or dissolved.

25 Years Summarized as ‘Semiconductors and Mobile’

After the IMF crisis, our economy rose again on the pillars of semiconductors, automobiles, and IT industries. In particular, semiconductors have established themselves as the strongest backbone of our economy. Samsung expanded its semiconductor investments from the 1990s and developed the world’s first 64M DRAM in 1992. It has maintained its number one position by securing leadership in the memory semiconductor market. According to a 2020 survey by the Federation of Korean Industries (FKI) of 1,000 men and women aged 18 and over nationwide on “Issues that shaped South Korea over 70 years since the Korean War,” more than half of respondents cited Samsung’s entry into semiconductors (64.2%) as the most memorable issue related to industrial development.

SK Group’s rise to second place in the business rankings this year for the first time in history was also largely due to the power of semiconductors. SK, ranked fifth in 1997, rose to second place this year. It took 16 years since overtaking LG Group in 2006 to reach third place. In March 2012, SK dramatically acquired Hynix, changing the group’s direction and image from static to dynamic. Since acquiring Hynix, SK’s total assets have steadily increased. The asset growth achieved from 2001 to 2011 was accomplished in just one year, 2012. Thanks to SK Hynix’s performance, total assets have continued to grow steadily.

Although LG saw GS and LS split off as affiliates, it maintained fourth place by focusing on electronics, displays, chemicals, and recently, the battery industry. Lotte, which was ranked 11th right after the IMF crisis, rose sharply to fifth place. Looking at the past decade, the rise in rankings of Lotte (7→5), POSCO (8→6), and Hanwha (14→7) groups is also notable. Over the past 20 years, 15 new groups including POSCO, KT, Shinsegae, Mirae Asset, and Korea Investment & Securities have been newly included in the top 30 groups.

"Future New Businesses Will Change Business Rankings Again"

Twenty-five years after the foreign exchange crisis, we are now facing a new era crisis called COVID-19. The industrial sector is exposed to various risks such as deteriorating labor conditions and global supply chain crises. However, experts say that our economy, which has recorded steady growth since overcoming the IMF crisis, now faces another opportunity.

Professor Sung Tae-yoon of Yonsei University’s Department of Economics said, "Changes in the rankings of the top 10 groups are evidence that the dynamism of our economy is alive," adding, "I believe that our companies with competitiveness will seize new opportunities in the global market amid the industrial upheaval following the post-COVID era." He analyzed that investment strategies and decisions in future new businesses such as mobility, secondary batteries, and bio will shake the industrial world once again.

Professor Lee Jung-hee of Chung-Ang University’s Department of Economics said, "As seen in the current business rankings, the industrial trend after the IMF foreign exchange crisis concentrated on semiconductors," and added, "In the future, active investments in new businesses such as mobility and bio, along with companies at the center of the Fourth Industrial Revolution like Kakao (15th) and Naver (22nd), will influence the business landscape."