Korea’s biggest companies turn to energy, robotics and AI

Korea's major listed companies are looking to expand into energy, robotics and AI as they seek new growth engines, according to a report released Monday.

Energy accounted for the largest share of newly added business activities at 31.1 percent, according to a report by the Federation of Korean Industries (FKI), which analyzed new business areas added this year to the corporate charters of Korea's 1,000 largest listed companies by assets as of the end of last year.

Manufacturing and mobility followed at 19.8 percent, while AI and information and communications technology (ICT) and digital services each accounted for 12.3 percent. Together, the four sectors represented 75.5 percent of the total.

Specifically, renewable energy topped the list of individual business categories at 18.9 percent, followed by robotics at 11.3 percent, software applications and cybersecurity at 8.5 percent. Knowledge-based services accounted for 6.6 percent, while AI-integrated services and data analytics and computing each made up 5.7 percent.

The FKI attributed the strong interest in renewable energy to growing corporate demand for clean power. It cited the government's target to curb carbon emissions by 2035 through nationally determined contributions and plans to establish RE100-compliant industrial complexes as key factors. RE100 is a global initiative under which companies commit to sourcing 100 percent of their industrial electricity from renewable energy.

The push into new industries also varied by company size. The 500 largest companies added an average of 2.1 new industry-related business activities each, roughly 1.6 times the 1.3 recorded by the bottom 500.

Among the top 500 companies, new business activities were spread relatively evenly across energy at 28.4 percent, ICT and digital services at 17.9 percent, manufacturing and mobility at 16.4 percent and AI at 16.4 percent. By contrast, the bottom 500 concentrated heavily on energy at 35.9 percent and manufacturing and mobility at 25.6 percent.

Larger companies also pursued a broader range of opportunities. Their newly added business activities spanned 22 subcategories, compared to just 15 among the bottom 500. Larger firms showed greater interest in software and service-based businesses, while smaller firms focused more heavily on hardware-oriented sectors such as renewable energy and robotics.

"Stronger institutional support is needed to help companies venture into a wide range of emerging industries and secure their future competitiveness," said Lee Sang-ho, head of FKI’s Economic and Industrial Research Department. "This should include expanded tax incentives for research and development and more effective regulatory sandboxes for emerging industries.”

Regulatory sandboxes are systems that allow businesses to launch and test new products and services based on emerging technologies under certain restrictions on time, location and scale without having to comply with some or all existing regulations.

BY PARK YOUNG-WOO [[email protected]]