Data shows that the top 100 Korean companies in terms of market capitalization have undergone a rapid change in business sectors over the past 10 years. The rankings reflect a shift from industrial businesses such as construction and shipbuilding to ‘non-smokestack’ industries such as service and distribution. (Image : Yonhap)
SEOUL, March 3 (Korea Bizwire) – Data shows that the top 100 Korean companies in terms of market capitalization have undergone a rapid change in business sectors over the past 10 years. The rankings reflect a shift from industrial businesses such as construction and shipbuilding to ‘non-smokestack’ industries such as service and distribution.
On the other hand, the top 100 companies in terms of market capitalization in other developed countries such as America and Japan showed little change. This shows that variability is significant for domestic companies.
The top companies in terms of market capitalization in Korea 10 years ago were businesses related to shipbuilding/machine equipment, and construction/building materials. However, after 10 years, knowledge-based service industries such as portal sites and games have climbed to the top. In the meantime, pharmaceutical and medical services in the U.S., IT, electronics and automobile businesses in Japan, and the banking industry in Europe are still securing the top position in terms of aggregated market value.
CEO Score, a management evaluation site, investigated the top 100 companies in terms of market capitalization in Korea, America, Japan, and Europe from 2006 to 2015. The results showed that the Korean top businesses in 2006 were mostly from ‘smokestack’ industries such as shipbuilding/machine equipment, construction/building materials, IT/electronics, petrochemicals and auto part manufacturing. However, the rankings changed dramatically in 2015 to the service sector, petrochemicals, construction/building materials, IT/electronics, distribution, and food/beverages.
Non-smokestack industries such as service and distribution made their way into the top five instead of shipbuilding/machine equipment and auto parts manufacturing.
In 2006, only five companies included in the top 100 were in the service sector. In 2015, this number increased to 10. The number of distribution companies also increased from four to seven, almost doubling over the past 10 years. In contrast, the number of companies that made it to the top 100 in the IT/electronics field and shipbuilding decreased from eight to seven each.
The portion of companies engaging in the service industry among the top 100 companies more than tripled from 2.3 percent in 2006 to 8.3 percent in 2015. IT/electronics ranked first, taking up 28.3 percent, followed by vehicle/auto parts manufacturing (9.3 percent).
Pharmaceutical and medical services (16.3 percent) took up the largest share in the American market, followed by service industries (15 percent), IT/electronics (14.0 percent), petrochemicals (9.1 percent) and banking (7.8 percent).
Vehicle/auto parts manufacturing (19.4 percent) had the largest volume in the Japanese market, followed by IT/electronics (13.1 percent), and telecommunications (10.1 percent).
Banking (15.4 percent) ranked first in Europe, followed by pharmaceutical and medical services (14.8 percent), and petrochemicals (14.2 percent).
The biggest mover in the rankings over the past 10 years in Korea was LG Household & Health Care. Gilead Sciences (pharmaceuticals), Keyence (measuring device manufacturer), and Volkswagen each showed the greatest shift in rankings in the U.S., Japan, and Europe.
By M.H.Lee (mhlee@koreabizwire.com)
