Conglomerates should rethink their stance on shared growth: official

SEOUL, June 24 (Yonhap) -- South Korean conglomerates need to rethink their stance on shared growth with smaller companies in order to raise their global competitiveness, a senior economic policymaker said Friday.
Knowledge Economy Minister Choi Joong-kyung said in a business gathering in Seoul that large companies must create a cooperative environment of working with small- and medium- sized companies.
Choi's remarks come as the government is pushing to get big businesses to work more closely with their subcontractors and share profits and technological expertise with them.
Conglomerates have long been criticized for monopolizing profits while asking their suppliers to cut costs on components and parts they make. Critics say that such arrangements have enabled big companies to increase their earnings at the expense of their subcontractors struggling with low or no profits.
"The time has come when conglomerates can no longer compete alone on the international stage, but must work as a group with smaller companies," he said.
Choi also called on smaller companies to do their utmost to improve research and development and independently strengthen their competitiveness so they can become full-fledged partners with conglomerates.
The minister said South Korea's overall industrial competitiveness will depend on how harmoniously large and smaller companies cooperate and work together.
yonngong@yna.co.kr