[fn Plaza] Let’s Look at the World with a Little Thought

Wasn’t it said that “the footprints of those who first walk across a snow-covered wilderness become signposts for those who follow”? Lee Kun-hee, Samsung’s late chairman, was such a figure for the Korean economy.
Last month, a memorial service marking the sixth anniversary of Lee’s death was held at his family’s burial site in Suwon, Gyeonggi Province. The management legacy he left behind can be summed up in one word: “thought.” Rather than focus on immediate results, he first asked how things would be used 10 or 20 years later. He never abandoned “thinking management”—finding answers by asking “why” and digging down to the roots of things. Now, as Samsung Electronics posts record results and per capita GDP eyes $40,000 for the first time, it is time for both Samsung and the government to revisit that question. Decisions made at the peak determine the course of the next 10 years.
It was reportedly during a brief return to Korea while he was studying at Waseda University in Japan that Lee crossed the Second Han River Bridge (now Yanghwa Bridge). His late high school classmate Hong Sa-deok, a former vice speaker of the National Assembly, boasted, “It’s a bridge built with our own technology. Isn’t it impressive?” Lee reportedly replied, “You fool, look at the world with a little thought. Once Korea is reunified, cargo ships will travel along the Han River. They should have made the pier in the middle of the bridge a little longer.” He had seen one step ahead, anticipating how the bridge would be used decades later rather than focusing on the immediate achievement of its completion. The message in his 1997 book, Lee Kun-hee’s Essay: Let’s Look at the World with a Little Thought, is no different.
Now at the peak of its performance, Samsung faces the question, “Is this really good enough?” When Samsung rose to No. 1 in the world in memory chips in 1993, Lee reminded his executives, “If there is a goal, it is not difficult to chase after it. But once you become a world leader, you have to find the goal yourself.” Samsung Electronics posted sales of 195.3 trillion won and operating profit of 107.4 trillion won in the third quarter of this year. Operating profit rose 782.5% from a year earlier. It is a turnaround two years after Jun Young-hyun, head of Samsung Electronics’ semiconductor (Device Solutions, or DS) division and a vice chairman, apologized when operating profit in the third quarter of 2024 was only in the 9 trillion won range.
But the concentration of profits in one area is a source of concern. The DS division generated 106.5 trillion won, or 99.2% of third-quarter operating profit, while the video display and home appliance (VD·DA) businesses posted an operating loss of about 200 billion won.
The situation cannot be compared directly with the days when there was no union, but the disparity in performance bonuses between business divisions is also a risk, as it can fuel internal discord. The shareholder-return policy, worth 90 trillion to 110 trillion won, also gives the impression that Samsung popped the champagne too early. Peak profits should first go toward investment in facilities and research and development, with the remainder returned to shareholders. During his lifetime, Lee warned, “Within 10 years, most of the businesses and products that represent Samsung will disappear.”
The government and political establishment face the same question. In Beijing in 1995, Lee said, “Our country’s politics are fourth-rate, its bureaucrats and administrative organizations are third-rate, and its businesses are second-rate.” The controversy began with questions over whether Samsung’s automobile plant, built in Busan in the 1990s despite the site’s poor conditions, had gone ahead for political reasons. The criticism was that administrative regulations and the authoritarianism of the political establishment were obstructing business. What about 30 years later? Coincidentally, there are now allegations that political considerations played a role in the enormous Honam Semiconductor Cluster, in which Samsung is participating. This is not something to take lightly.
Judging by the growth figures alone, the government gets a passing grade for now. Last month, the International Monetary Fund (IMF) projected South Korea’s per capita GDP for this year at $43,512. The problem, however, is that the underlying growth is not very robust. Third-quarter growth of 1.0% was driven by semiconductors and government consumption. Securing the electricity and water needed for semiconductor plants remains a challenge. Progress in improving labor-market flexibility is also slow.
Even so, solutions must be found. With countries and companies around the world mounting an all-out effort and running in lockstep, there is no time to hesitate. Samsung’s management should establish a compensation system that reflects both business-division performance and contributions to the company as a whole. It should look 10 years ahead, prepare new growth businesses, and pursue mergers and acquisitions (M&A) boldly. The union, too, should make the competitiveness of the company as a whole the basis for negotiations. The government should move quickly to expand the power grid and water supply and improve labor-market flexibility. The National Assembly should focus on budget deliberations centered on people’s livelihoods and the economy. About 30 years ago, businesses were called “second-rate.” They have answered by surpassing 100 trillion won in quarterly operating profit and helping the country reach per capita GDP of $40,000. Now it is the turn of the government and political establishment, once branded “third-rate” and “fourth-rate,” to respond. Let’s look at the world with a little thought: Why is $40,000 in per capita GDP a starting point, not a destination? Why must we prepare for the next 10 years?
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