The role of a corporation is to generate profit.
However, that is not all. Creating jobs, paying salaries to workers, and faithfully paying taxes are also essential roles of a corporation. As a corporation grows larger, these roles and responsibilities also increase.
It’s not just the chairman working hard that has allowed major corporations to grow into global enterprises, is it?
Of course, the chairman’s efforts are significant, but it is also due to national support, hardworking employees, and consumers who buy the products.
Thus, the success of a corporation is built upon various societal infrastructures. Therefore, corporations should go beyond merely earning money and fulfill socially meaningful roles.
Large corporations in our country may make substantial profits, but they are often stingy with social contributions. They are barely maintaining an appropriate level of tax payments without indulging in embezzlement.
Citizens do not criticize thriving local businesses for no reason.
Although their image improved somewhat after this donation to the victims of the savings bank crisis, the perception of OTK Company in Korea is not very positive.
Due to their registration in tax havens and investments primarily in the U.S., they face misunderstandings that they are siphoning money earned in Korea to America (often highlighted by the media).
In reality, excluding their investments in derivatives during the L6 incident, the actual profit earned in Korea is quite minimal.
The affiliate K Company does generate revenue in Korea, but it represents only a tiny part of the overall earnings.
Regardless, OTK Company, having its headquarters in Korea, needs to contribute to society to some extent.
So, what can they actually do?
After hearing my thoughts, Taek-gyu said, “Can’t you just donate like last time?”
“Even donating raises doubts about how that money will be used properly.”
It’s not uncommon for donation organizations to misappropriate funds or have executives indulge in financial gatherings.
This is why Bill Gates, who donates the most globally, established his own foundation to pursue various charitable initiatives.
I began to feel that I wanted to go beyond merely giving money and engage in meaningful activities.
“I understand, but youth unemployment is severe in Korea.”
Countless young people are delaying graduation or are solely focused on civil service exams, unable to find jobs.
The president, while shouting that there are no jobs, encourages the youth to seek overseas employment, saying, “Try it until South Korea is completely emptied. If you ask where all the young people went, they’ll say they went to the Middle East,” which has turned job seekers’ feelings upside down.
In fact, encouraging overseas employment isn’t inherently problematic.
Unemployment arises primarily from a mismatch between job positions and job seekers. If this isn’t resolved internally, looking for solutions externally can be one method.
However, supply must align with demand in the target country; simply pushing people to go won’t work.
It’s not like the 1970s when there was a construction boom in the Middle East; what are they supposed to do there?
“So why is he talking such nonsense?”
“Regardless, Park Si-hyeong is the legend of a salaryman who joined as a regular employee and rose to the position of president.”
Thanks to that image, he succeeded as a politician and reached the presidency.
When Park worked at Eunsung Industrial, it was truly a period of rapid economic growth in Korea.
In the past, when large companies thrived, small businesses did well too, leading to increased household income and consumption in a virtuous cycle. This is known as the trickle-down effect.
However, during periods of low growth, this trickle-down effect fails to operate properly.
What good does it do to yell “business-friendly” and reduce corporate taxes while allowing dispatch work and non-regular employment?
The easiest way for large corporations to increase profits isn’t through technological innovation or market development but by squeezing their subcontractors. Lowering supply prices reduces costs. Using non-regular workers instead of regular employees further cuts labor costs, increasing profits even more.
This ultimately just enriches large corporations while hurting the economy of the common people. Yet, the president’s perception remains stuck in that era.
When the public realized that “business-friendly” only applied to large corporations, the government suddenly introduced the card of “creative economy.”
“What is a creative economy?”
I simply read the government’s statement aloud.
“A creative economy aims to create jobs and markets through creativity and innovation, enhancing creative leadership to realize a society where creativity can flourish.”
“So what does that mean?”
“….”
Honestly, I don’t quite understand it either.
Creation, innovation, creative economy leadership, creativity, new society, etc. It sounds like all the good terms are included, but there’s no concrete content at all.
I wonder if the speaker even knows what they’re talking about.
“Anyway, the government has invested tax money to build creative economy support centers everywhere.”
“What kind of support do they provide?”
“Youth entrepreneurship.”
“Oh! That’s not bad. Do they support things like startups?”
“No, more like food trucks.”
“Well, at least food trucks are creative.”
“But most of them failed after a few months.”
“….”
South Korea already has a high rate of self-employment and fierce competition.
The biggest reason for this situation is the IMF, of course. It’s no exaggeration to say that the 1997 financial crisis changed the landscape of the Korean economy.
At that time, companies collapsed one after another, leading to a flood of retirees who were compelled to enter self-employment to make a living.
Even now, starting a chicken restaurant after early retirement has become almost a course of action.
As a result, it’s become absurd that a retiree’s tteokbokki shop and a government-supported food truck selling tteokbokki are facing each other.
Currently, the self-employment market is at its worst, with many businesses closing down. In this situation, no wonder government funding for food trucks doesn’t lead to successful ventures.
In many cases, these food trucks fail within months.
There are also support programs for youth stores in traditional markets, but the situation is similar to that of food trucks. It’s just a cycle of opening and closing, wasting taxpayer money.
“I wish they had supported startup businesses with that money instead.”
While there are various supports for self-employment startup ventures, there have been no significant supports for startup creation.
This contrasts with the Chinese government’s initiative to foster startups at the government level as part of efforts to alleviate youth unemployment.
When asked about their dreams, Chinese university students shout “starting a business.” However, when the same question is posed to our university students, the response is often “getting a job.”
Parents also prefer their children to work for large corporations or become doctors or lawyers rather than starting their own startups.
Beyond the issue of perception, the startup environment is not conducive enough to encourage such endeavors.
Unlike abroad, there are few successful startup cases, and failure can lead to severe financial losses. In a society that does not acknowledge failure, it’s natural to seek stable employment in such circumstances.
Of course, there are young people who ignite their passion and dive into new industries even in such situations, but the lack of proper support often leads to trial-and-error experiences or frustrations during the development stage.
This is precisely what I am focusing on.
“What if OTK Company supports startups?”
“To invest?”
I shook my head.
“Not that exactly, but more like part of corporate social responsibility?”
While nurturing potentially successful startups is good, I want to create an environment where they can keep challenging themselves even after failures.
I organized my thoughts and decided to create the PPT for the presentation myself.
Doing this brought back memories of working on group projects in my freshman year. I recall staying up all night with Seon-Ah in a café working on assignments…
Anyway, it’s not easy to do this after such a long time. I’ve forgotten all the shortcuts, so I’m lost.
Should I just have an employee do this? If I call Gi-hong, he would do a great job.
That senior is excellent at making PPTs.
As I struggled in front of the computer, Taek-gyu, who was watching, said, “If you don’t know, why not call Bill Gates and ask? He might pick up if you call.”
“……”
“Surely not?”
***
“I gathered team leaders and higher-ups for a meeting. Everyone gathered in the conference room, and Taek-gyu and senior Sang-yeop also took their seats.
“The reason for calling you here is to discuss that it seems OTK Company should start engaging in social contribution activities,” I began.
I started the PPT presentation.
On the screen, statistics showed the startup status in the U.S., China, and South Korea. The comparison was quite embarrassing.
“What do you think is the current issue with South Korean startups?”
Opinions varied: small domestic market, government support, negative perception, lack of managerial capabilities, saturated red ocean markets, etc.
Senior Sang-yeop spoke up.
“Isn’t regulation the biggest problem? Most new industries are illegal due to various regulations.”
Is it any wonder that statistics show 75% of the world’s top 100 startups are illegal in Korea?
“If carpooling starts being implemented properly, the taxi industry will rise up against it.”
“At least there are related regulations, so that’s fortunate,” I replied.
Sang-yeop shook his head.
“But they’ve even created new laws to ban certain things.”
One startup developed an app called Hello Dealer, which connected car sellers and dealers.
The offline used car businesses retaliated fiercely. Consequently, Kim Tae-sung, a legislator from Korea’s Gadaeng district, where a large used car market exists, submitted and passed a revision to the automobile management law requiring a minimum amount of parking spaces and auction sites for car auctions.
As a result, Hello Dealer found itself in a situation where it had to shut down.
Despite talking about youth entrepreneurship and the Fourth Industrial Revolution, they turned a legitimate startup into an illegal one overnight because local residents opposed it.
Similarly, if the National Assembly removes the exception clause from the Transportation Business Act, that would be the end of carpooling. If the taxi industry protests, you never know which senator might react for political gain.
“So, I’m considering going beyond investing in promising startups and creating an environment conducive to startup creation.”
Michael asked, “What do you mean?”
I turned the screen and replied, “We’re providing space and services for startups. We’re thinking of creating a co-working office for that purpose.”
Senior Gi-hong asked, “Aren’t there several co-working offices in Gangnam?”
“That’s right.”
A co-working office leases an entire building, divides it into small office spaces, and subleases them.
The most famous and largest co-working company is Workspace. It started its business in Manhattan, New York, in 2010 and has since expanded to 16 countries and over 50 cities worldwide. It has entered Korea, with branches in Gangnam, Yeouido, and Gwanghwamun.
Once the demand for co-working spaces was confirmed, similar businesses emerged, thriving mainly in Gangnam.
“The purpose of co-working offices is to generate income by leasing space. So, the prices aren’t that low.”
Co-working offices charge based on the number of people, not the space. To provide workspace for two people, it costs at least 1 million won, which is comparable to regular office rent.
However, they typically have low or no deposits and offer various added services.
Basic amenities include coffee and beer, devices for developers, 3D printers, professional studios, security systems, meeting rooms, showers, mail services, and various workshops.
With many startups residing together, there’s potential for community building and networking as needed.
“What I envision is similar. But our goal isn’t rental income; it’s nurturing startups. We’ll keep the rent as low as possible and move beyond just leasing space to provide progressively necessary services. This includes incorporation, equity issues among partners, collaboration with related companies, accounting, legal matters, taxation, marketing, and so on. We aim to minimize risks in case of failure, enabling them to try again, and even connect them with investors or invest directly ourselves.”
Taekgyu asked a practical question, “How much does it cost?”
“Operating costs can be somewhat covered by the fees from the resident companies, so apart from the initial costs, we just need to manage the monthly rent and various service fees.”
Team leader Michael Lee strongly agreed.
“There are many passionate startups in Korea. Supporting them is a very desirable thing.”
Promotions team leader Jung Gi-hong felt the same.
“It aligns well with the OTK Company image and will be very helpful for our promotion.”
Senior colleague Sang-yeob nodded.
“The cost-effectiveness seems quite good.”
Henry added,
“Although it’s a social contribution activity, if we nurture startups and even make direct investments, we could actually see profits.”
After finishing my presentation, I asked the attendees,
“Those in favor, please raise your hands.”
Everyone raised their hands in unison.
Taek-gyu muttered as he watched.
“It feels like a Communist Party congress.”
Lol