Korean Companies Are Getting Younger

Korean companies got younger by an average of 2.3 years compared to 2000.

The analysis of the Korea Chamber of Commerce and Industry (KCCI) of 280,000 companies posted on the company information portal site “Korchambiz” (www.korchambiz.net) found that as of the end of May, the average age of local companies was 10.4 years, 2.3 years down from 12.7 years in 2000.

As for industry, relatively younger sectors included communications (6.3 years), industrial service (7.9 years), lodging and restaurant (9.2 years), retail and wholesale (9.3 years), construction (9.7 years) and educational service industries (10.7 years).

Financial and insurance (22.1 years), electricity, gas and water service (13.5 years), transportation (12.8 years) and manufacturing industries (11.0 years) were relatively older.

The data showed that the bigger a corporation was, the older the company was.

Among small and mid-sized companies, the average age of corporations with less than 100 employees was 9.9 years, and the age of corporations with from 100 to 300 workers averaged 18.5 years. Regarding large enterprises, the average age of corporations with between 300 to 500 employees was 22.8 years, and companies with from 500 to 1000 employees and more than 1,000 workers averaged 25.6 years and 28 years, respectively.

The analysis showed that brisk start-ups in the communications and service industries contributed to the decline in average age of Korean companies.

About 67.0 percent of communication companies were established after 2000, and the proportion of lodging and restaurant and service sectors that started business after 2000 was 57.9 percent and 53.8 percent, respectively.

Corporations whose ages are between 10 to 20 years accounted for the largest part of the surveyed companies’ sales: 19.1 percent, followed by 18.8 percent by 30 to 40- year-old companies, 18.5 percent by five to 10-year-old companies, and 15.7 percent of companies 20 to 30 years old.

The net profits of companies 30 to 40 years old accounted for 40.4 percent of the surveyed companies’ total net profits, while companies 20 to 30 years old made up 20.2 percent, companies of five to 10 years old made up 14.7 percent, and corporations 10 to 20 years old accounted for 9.8 percent of the total net profits.

Jeong-Hun Park sunshade@donga.com