Seoul: A group of South Korean business lobbies on Thursday launched a joint forum aimed at revamping the country's corporate regulations and revitalizing growth engines. The Korea Chamber of Commerce and Industry (KCCI), the Federation of Korean Industries, and the Federation of Middle Market Enterprises of Korea have initiated the Business Growth Forum to address excessive regulations and punishments that affect the corporate community.

According to Yonhap News Agency, the move came amid criticism that excessive regulations can hinder companies' business expansions. Data from the government and market watcher FnGuide Inc. indicates that only 0.04 percent of small-sized businesses grew to become mid-sized firms from 2020 to 2023, and only 1.4 percent of mid-sized companies became conglomerates during this period.

The KCCI highlighted that the average annual sales growth of conglomerates was estimated at 10 percent from 2004 to 2014, but this figure plunged to just 2.6 percent from 2014 to 2023. Song Seung-heon, head of McKinsey and Company's Seoul office, stated that the biggest challenge in South Korea's business environment is that it hinders entrepreneurship. He noted that business managements are more likely to avoid risks due to this structural issue.

Song further emphasized the need for South Korea to provide more safety nets and incentives for companies. The forum plans to hold regular gatherings and conduct research on how existing regulations hinder business expansion and economic growth.