The Samsung Group will invest 23 trillion won (20 billion U.S. dollars) in environment-friendly and healthcare businesses by 2020. This investment plan was confirmed at a meeting of the conglomerate`s presidents hosted by Samsung Chairman Lee Kun-hee for the first time since his return to management in March. The plan is also expected to help the Korean economy. Samsungs five new growth engines are solar cells, rechargeable cells for vehicles, LED, biopharmaceuticals and medical devices. The conglomerate expects the five to generate 50 trillion won (44 billion dollars) in sales and create 45,000 jobs by 2020.
A month ago, the LG Group said this year will be the first year of its green management and announced investment of 20 trillion won (17.6 billion dollars) in environment-friendly sectors by 2020. It expects green businesses including solar cells and next-generation lighting and cells to account for 10 percent of annual sales in 10 years.
The Hyundai Kia Automotive Group subsidiary Hyundai Steel, which built last month an environment-friendly steel mill in Dangjin County, South Chungcheong Province, will gradually expand the mills annual production capacity from four million tons to 12 million tons by 2015. The mill is Hyundais attempt to make an environment-friendly investment in a smokestack industry.
Certain economies, particularly those seeing rapid recovery, have begun to introduce exit strategies from economic stimulus packages. Uncertainties such as the fiscal and financial crises of southern Europe, however, remain obstacles that block the global economy from recovering. To see Koreas large corporations make aggressive investment in times of difficulty is encouraging. Bold investment decisions will accelerate Koreas economic recovery and create more jobs.
Korea has overcome the global economic crisis relatively well. In the first quarter, economic growth reached 7.8 percent year-on-year, the highest in seven years. The trade balance has also recorded a surplus for three straight months. Given the fiscal crisis of southern European nations and the possible weakening of the Korean won, unconditionally expecting rosy prospects is tough. Yet no fruit can be expected without investment. Companies should invest more to sustain Koreas trade surplus and economic growth.
To spread the recovery trend across the economy as a whole, smaller companies should put higher priority on investment as well as larger corporations. Since its inauguration, the Lee Myung-bak government has emphasized making Korea friendly toward business and investment, but has failed to efficiently fulfill this promise. Korean corporate investment has frequently been discouraged by heavy regulation. Unnecessary regulations rooted in populism are most notable in medicine and education. The government should conduct drastic deregulation to encourage more corporate investment.