Emerging from the ashes of a destructive civil war that had devastated every aspect of the nation’s economy, South Korea seemed doomed to becoming yet another third-world country trapped in an eternal vicious cycle of poverty. Emphasizing the fact that South Korea lacked both industrial infrastructure and abundant natural resources, economic speculators were skeptical of South Korea’s chances for success. Yet with pure grit and determination, South Korea was able to make the miraculous transformation from a poverty stricken nation to an economic powerhouse, over the course of 40 years.
Part of the secret to South Korea’s unbelievable “zero to hero” story was President Park Jung Hee’s strategic decision to provide generous funds to family owned businesses, commonly known as “chaebols”. The authoritarian government of President Park realized that centering the nation’s wealth in the hands of a few wealthy conglomerates was necessary in order to compete in a globalized economy. President Park, an iron hearted man who emphasized prosperity over equality, believed that if he was able to foster the growth of the chaebols, a certain amount of wealth would trickle down to the middle and low class civilians. To a certain extent, President Park’s dream of a “trickle down economy” was a success. South Korea now boasts one of the strongest economies in the world and is a proud member of the G-20. However such rapid economic development came at a hefty price. Failing to give sufficient consideration to how the enlarged economic pie would be distributed among different social groups, South Korea’s economy soon fell victim to the insatiable greed of the corporate plutocracy. President Park had created a behemoth that was beyond his control. The era of chaebols had officially begun the moment these mega-conglomerates became “too big to fail”
While strolling down the brightly lit streets of Gangnam, it’s easy to get confused whether you’re living in the Republic of Korea or the Republic of Samsung. Samsung motors, Samsung life insurance, Samsung TV, Samsung card, Samsung mobile, Samsung construction and even a pair of Samsung sports teams; South Korea’s number one conglomerate has written its name down on literally every single marketable product that exists in a capitalist society. Although the thought of Apple making apartments, Sony providing life insurance, and Google creating its own sports team sounds preposterous to many foreigners, such absurdity becomes reality in South Korea. Samsung’s growing influence has infiltrated so deeply into the various sectors of the nation’s economy that the South Korean government has been largely ineffective at regulating this wild beast. Considering that Samsung alone is responsible for roughly 20% of South Korea’s GDP and that the top ten chaebol groups control 80% of the South Korean economy, it’s not a surprise that conglomerates have been able to evade governmental regulation with relative ease for the past four decades. With the chaebol groups hoarding the majority of the nation’s wealth, life has become increasingly tougher for smaller enterprises that do not possess the financial power to compete with corporate colossuses like Samsung and Hyundai.
Even though most South Koreans are fully aware of the fact that chaebols utilize monopolistic methods in order to corner markets and eliminate competition, they rarely criticize such blatant violation of anti-trust policies mainly because the chaebols have been the driving force of South Korea’s unprecedented economic growth for the past several years. “As long as the chaebols continue to bring wealth and prosperity to the country, Koreans don’t feel the need for government intervention.” says Professor Kim Wu Chan of Korea University. Yet what many South Koreans are less aware of is the fact that small and medium-sized enterprises employ 90% of the South Korean workforce. Simply put, the chaebol groups are only generating wealth and prosperity for a minor portion of the South Korean population, while pushing smaller businesses to the brink of bankruptcy. By selling products at ridiculously low prices that smaller enterprises can’t hope to match, chaebols have cruelly driven hundreds of hardworking middle class civilians out of business. In 2011, when Lotte began selling buckets of fried chicken at a knock-down price of 5000 won, hundreds of chicken restaurant managers trembled in fear as they helplessly watched their sales plummet. Although Lotte eventually caved into negative public opinion and stopped the deal after a week, the Lotte chicken incident clearly illustrates the dominant position of the chaebols over smaller firms.
Chaebols not only eliminate the process of healthy competition, but also destroy future potential, stifle entrepreneurship, and discourage innovation. Dismayed by the indomitable barriers the chaebols have erected in order to keep ambitious competitors away from their respective corporate kingdoms, aspiring entrepreneurs lack the courage to begin their own businesses in fear of pulling the lion’s tail. In South Korean society, stability is everything. Why provoke the chaebols to wrath when you can simply work for them? This passive mindset is the reason why so few Korean start-ups grow to become profitable independent SMEs (small and medium-sized enterprises). In order for South Korea to remain competitive in a globalized economy, it needs to cultivate and encourage the growth of its SMEs. South Korea will never be able to keep pace with constantly changing global trends unless there’s continuous innovation. And what better environment for such continuous innovation than a highly competitive market composed of hundreds of independent SMEs each endeavoring to produce the best product possible? What the SMEs lack in size, they make up for in flexibility. And it’s the dynamism of the SMEs that will propel South Korea into another era of economic prosperity.
There’s no denying the fact that the chaebols had played a crucial role in stimulating South Korea’s economy when times were rough. However, if South Korea is going to take the next step forward, it must no longer rely solely on the economic strength of a handful of mega-conglomerates. No doubt, the task of challenging the superiority of the well-established chaebol groups seems quite daunting at first. Yet, even as we speak, South Korea is moving in the right direction. The number of “one man creative enterprises” has risen by 13% in the past year to 296,317. President Park Geun Hye officially announced that she will make it her personal mission to create jobs for aspiring entrepreneurs. And an increasing number of SMEs have been making significant progress in the tech fields of social media and gaming, where the only factor that limits your success is your own imagination and creative ability. Despite their humble beginnings, companies like Kakao Talk, NCsoft, Naver, and Humax have all managed to become part of the “trillion won club”. None of these firms is controlled by chaebols. They are all independent SMEs that have achieved a certain amount of success through innovation and creativity. Although the era of chaebols is still far from over, a light at the end of the tunnel has finally revealed itself to the South Korean public. What the South Korean economy needs most right now are ambitious and innovative young minds, not corporate wage slaves bound by loyalty to the chaebols.
 Harlan, Chico. “In South Korea, the Republic of Samsung.” Washington Post. The Washington Post, 10 Dec. 2012. Web. 02 Mar. 2014
 “Top Ten Chaebol Now Almost 80% of Korean Economy : Business : Home.” Hankyurae News N.p., n.d. Web. 02 Mar. 2014.
 곽, 정수. “‘범 4대 재벌가’ 자산, 국가 전체 자산의 25% 달해 : 경제일반 : 경제 : 뉴스 : 한겨레.” 한겨례, n.d. Web. 02 Mar. 2014.
 “Chaebols: Kings of the Conglomerates.” Campden FB. N.p., n.d. Web. 02 Mar. 2014.
 이, 규성. “1인창조기업, 문화콘텐츠 생산 주역으로 ‘부상’ – 아시아경제.” 아시아 경제, 30 Jan. 2014. Web. 02 Mar. 2014.
 Lee, Yoolim. “Business / Technology.” The Seattle Times. N.p., 18 July 2013. Web. 02 Mar. 2014.