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 launched the Business Growth Forum aimed at reducing excessive regulations and punishments for the corporate community. The move came amid criticism that excessive regulations can hinder companies' business expansions.

According to Yonhap News Agency, SK Group Chairman Chey Tae-won, who also heads the KCCI, emphasized the need to abolish regulations differentiated by company size to achieve economic growth. Chey noted that businesses are becoming reluctant to take risks and seek growth without adequate incentives. He stressed that as long as such regulations persist, businesses will opt to remain as small and medium-sized firms or even split divisions. Chey added that the government should encourage small companies to grow into conglomerates, as an increase in the number of large firms will eventually lead to economic growth.

Citing data from the government and market watcher FnGuide Inc., the forum highlighted that only 0.04 percent of small-sized businesses grew to become mid-sized firms from 2020 to 2023. Over the same period, only 1.4 percent of mid-sized companies became conglomerates. The KCCI also noted that the average annual sales growth of conglomerates was estimated at 10 percent from 2004 to 2014, but the figure plunged to just 2.6 percent from 2014 to 2023.

Song Seung-heon, who heads McKinsey and Company's Seoul office, pointed out that South Korea's business environment hinders entrepreneurship. He noted that business managements are more likely to avoid risks due to the structural issues present. Song added that South Korea needs to make efforts to provide more safety nets and incentives for companies.

The forum plans to hold regular gatherings and carry out research on how existing regulations hinder business expansion and economic growth.