The South Korean government has long implemented policies to help high-potential firms grow into global leaders. But is the current approach—built on generous subsidies—truly effective? Dr. Minho Kim of KDI examines the impact of Korea’s national champion policy and explores better ways to support business growth.
The Limits of Temporary Subsidies: Growth at a Standstill
A key example of this policy is the World Class 300 program, which has invested over 50 billion won per year since 2011. However, a comparison with non-supported firms shows little to no meaningful growth in sales or value-added, while productivity and labor cost indicators have slightly declined. These findings suggest that the program has fallen short of its goal—enhancing corporate competitiveness. Simply put, short-term subsidies alone are not enough to address the specific growth barriers companies face.
A Smarter Approach with Private-Sector-Led Bespoke Support
To better reflect the complex nature of business growth, Dr. Kim proposes a bespoke operational model: A customized support system led by the private sector. This model allows companies to develop growth strategies tailored to their unique challenges, rather than relying on one-size-fits-all government subsidies. By tapping into private capital, businesses can accelerate innovation, technology commercialization, and expansion, creating a more sustainable path to scaling up.
