LG as investment role model

LG Group has announced an ambitious investment that ranks as one the largest in the company’s history. The company detailed plans to invest a total of 15 trillion won ($13.3 billion) this year - 11.3 trillion in facilities and 3.7 trillion in research and development. This represents a 28-percent increase from the 11.7 trillion won in investments the group made last year.

The public is hoping that this bold pre-emptive investment by LG serves as a flare that signals not only a great leap for the company, but also the revival and restoration of the Korean economy.

Investment decisions in the corporate world are not made with short-term profits in mind.

Large investments can only be embarked upon when there is a clear vision for the future and a solid strategy. LG Group President Koo Bon-moo expressed a clear vision and strategy in his New Year’s address, saying that the country needs to look ahead to “five years from now and 10 years from now, create technology that can lead changes in the corporate sector, and accelerate preparation for the future.”

The fact that LG’s investment plans focus on up-and-coming technology supports this point. More than half of the facilities investments involve additional LCD product lines and advanced technology offerings such as solar batteries and mobile telecommunications. Its research and development investments will look to develop technologies that can dominate the market five to 10 years from now, including secondary batteries, smart TVs, 3-D televisions and smartphones.

We view LG’s investment plan as the result of a mindset that is constantly striving forward and does not settle for its past accomplishments but instead makes changes to play a big role in the international world of business.

Risks, of course, always come hand in hand with investments. However, we cannot expect development unless we take those risks. Furthermore, a revival of the economy and the creation of jobs are not possible without active investments from large companies.

In this respect, massive investments are the privilege and vocation of large companies that can afford to make such commitments. LG Group is setting an example as a model large corporation, becoming the first Korean conglomerate to present a bold investment plan. We hope that LG’s investment plan will prove to be a turning point in entrepreneurship and within the ranks of the country’s large companies, which have the power to lift Korea’s economy out of the downturn.