Korea's 'chaebol' urged to help regions

Korea's 'chaebol' urged to help regions

SEOUL -- South Korea's government has since last year worked with Samsung and other chaebol business conglomerates to establish innovation centres across the country. It aims to help nurture new ventures and support smaller businesses. These centres aim to boost the competitiveness of the country's economy by increasing co-operation between chaebol and smaller businesses.

Kim You-sik, director of the Creative Economy Promotion Division at the Ministry of Science, ICT and Future Planning, said South Korea aimed to create a company town like the city of Toyota in Japan for each region. This is one of the goals of the creative economy policy of President Park Geun-hye.

South Korea has a population of about 50 million; some 40 per cent live in the metropolitan areas. Many large companies are also headquartered in larger cities. Problems because of overconcentrated economic activity in large cities has surfaced lately.

An official at the Korea Tourism Organisation said he wished his country had cities like Japan's Osaka and Kyoto. In 2014, 14.2 million foreign tourists visited South Korea, but more than 80 per cent went only to Seoul. Most who visit South Korea do so for shopping. The government has been unable to attract people to cultural heritage sites in smaller municipalities.

Chaebol are partly responsible for sluggish regional economic activity in South Korea. Their attitude toward smaller businesses has long been criticised. An official at the Korea Federation of Small and Medium Business said conglomerates often end business relationships without any justifiable reason or steal technology from smaller businesses.

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