[Viewpoint] Chaebol scions lack gung-ho spirit

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[Viewpoint] Chaebol scions lack gung-ho spirit

The founders of Korea’s conglomerates, or chaebol, often operated differently from their scions, who can be seen as second-generation entrepreneurs. More often than not, the children lacked the enthusiasm, vigor and aura of their fathers’ generation, and oftentimes they found the boots placed before them too big to fill.

This difference is detectable simply by watching them deal with uncomfortable situations. I still remember covering the public trials of former presidents Chun Doo Hwan and Roh Tae-woo in 1996. They were charged for their roles in the infamous military coup of Dec. 12, 1979 that brought Chun to power as well as for their involvement in cracking down on the bloody Gwangju Democratization Movement the following May (Chun was originally sentenced to death before later receiving a presidential pardon). They also faced accusations of accepting illegal slush funds from entrepreneurs.

As the nation’s leading fathers and sons sat together during these highly publicized trials, the chaebol leaders soon began to fall into two categories: the founding owners sat upright and wore expressions of pained concentration, while the heirs fidgeted and shook their legs to show how uncomfortable they were. Their restlessness distracted the gallery and clearly showed the difference between them and their parents.

I covered numerous corporate closures as a business reporter since the 1997 financial crisis, and while most of my sources disappeared, I have run into several over the years. One of these first-generation businessmen who used to run a corporate cartel said he had opened a small business in Dongdaemun Market after his first project had soured. “I built a company with my bare hands from the rubble of [the Korean] war,” he told me. “I’m not scared of being empty-handed.” Regardless of the feasibility of his latest business ideas, his daring and unyielding entrepreneurship genes were impressive.

But the same cannot always be said of the so-called “second-generation rich,” despite many of them actively pursuing their own businesses. This may be because they start out with the abundant resources and support of family-run conglomerates. Last year, for example, a confectionery war among daughters of chaebol founders made headlines, yet their success was somehow mitigated by having their fathers stand behind them with expansive safety nets should they fall.

In other words, the chaebol heirs lack the spirit of daring and innovative entrepreneurship that marked their parents’ rise to fame and fortune. Many have moved into smaller business areas and lost the true entrepreneurial spirit of risk-taking.

Meanwhile, job creation has become a top priority of the government in this election year, with Seoul urging the need to encourage new business start-ups. President Lee Myung-bak pledged to subsidize aspiring entrepreneurs to the tune of 500 billion won ($432 million). Financial Supervisory Commission Chairman Kim Seok-dong promised radical action, such as opening a special market for small and medium enterprises and venture companies to stimulate entrepreneurial activities and corporate start-ups.

However, it is not sensible to expect sudden change to arise merely from government rhetoric. Starting a business these days is challenging, to say the least. The first-generation chaebol founders had it easier because they started when there was virtually no industrial activity in the country. They blazed new trails where there were none, and these quickly became part of the topography of the economic terrain. Today, Korea is a different country altogether from the scarred nation that emerged from three years of civil war, and it lacks little that is available in the most advanced of societies.

Despite this, the young must be encouraged to keep starting businesses and challenging the norm or established order. Without this mindset of venturing into new fields and seeking fresh innovations, Korea’s comfort-seeking society will only age quickly. Enterprise, venture and concentration are the basic elements required of a corporate founder, and such habits should be encouraged. British historian Arnold J. Toynbee argued that ancient Mayan and Mesopotamian civilizations crumbled because they lacked this spirit. Koreans must learn from their example and keep their finger on the pulse, bearing in mind that new niches have yet to be discovered in the market and few companies live to be 100.

*The author is an editorial writer of the JoongAng Ilbo.

by Yang Sun-hee

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