Ease up on big businessSteve Jobs should be relieved that he was able to create Apple Inc. on American soil. He would not have lasted long if he was subject to the “corporate bashing” common in Korea.
The firm iSuppli recently estimated that the cost of manufacturing the 16-gigabyte version of the iPhone 3G comes to around $179. Apple assembles the product in China - which has cheap labor costs - and sells them for as much as $500 apiece around the world.
In the process, the company posts sizable profit margins and rakes in huge revenues, earning 5 trillion won ($4.3 billion) in the second quarter from global iPhone sales alone.
But we don’t see government officials and politicians in the United States lashing out at the company for its success. Although Microsoft founder Bill Gates is a renowned philanthropist, Jobs has relatively little interest in sharing his wealth with the underprivileged. He limits his overall donations to $1 million or so a year despite his vast fortune.
But the company is not blamed for sitting on a pile of cash at the expense of struggling small companies and consumers. Americans rarely throw the “social responsibility” burden on the shoulders of big companies and executives. Instead, some people in the U.S. laud Jobs for donating some of his personal wealth to the less fortunate and accepting an annual salary from Apple of just one $1.
Ever since President Lee Myung-bak criticized a consumer loan company affiliated with a conglomerate for high interest rates, government officials and politicians have joined hands to condemn big corporations. They are not entirely wrong. Large companies benefited the most from high foreign exchange rates, low interest rates and expanded fiscal spending. Some large companies also have been accused of unfair practices toward their subcontractors.
Social accusations, however, can only be justified when they are based on facts, and data on interest rates charged by consumer loan companies and the overall picture on hiring and investing by larger firms can be misleading. There are many smaller companies in Korea today that are thriving alongside their larger counterparts. One midsize producer of key components in light-emitting diodes, for instance, has Samsung and LG Electronics literally begging for more of its products. We must focus on these success stories in the small and midsize business community to instill confidence in the economy.
Many Korean companies are poised to leave China because of rising labor costs. Now is the best time to seek measures that will help both large and smaller companies prosper. We gain nothing by treating companies that contribute to economic growth as a contemptible lot.