S Korea Kim Moon-Soo, governor of Gyeonggi province,&...

Daily Star 18 August


Nobel laureate Professor Muhammad Yunus poses for photographs with Ambassador Dho Young-shim, chairperson of UNWTO ST-EP; Ambassador Kim Won-soo, deputy Chef de Cabinet and special adviser to the secretary-general, and lawmakers Na Kyung Won, Sang Eun Park, and Young-Hee Choi during a visit to South Korea recently. Photo: Yunus Centre Star Business Report

Nobel peace prize winner Professor Muhammad Yunus discussed social business and ways to achieve millennium development goals globally by applying the new economic theory during a visit to South Korea recently.

The microcredit pioneer was in Seoul on August 14-16 and discussed social business with the country's business and political leaders.

Kim Moon-Soo, governor of Gyeonggi province, who is interested in setting up a social business fund in collaboration with the Yunus Centre in Bangladesh, hosted a dinner in honour of Prof Yunus.

During the visit Dr Yunus also met with Korean parliamentarians from both the ruling party and the opposition, to discuss how to expedite the process of achieving MDGs globally, said Yunus Centre in a statement.

The lawmakers expressed their deep interest in applying social businesses for achieving the MDGs.

Their discussions also included issues relating to microcredit in Korea.

The meeting of the parliamentarians was organised by Ambassador Dho Young-shim, member of the UN MDG Advocacy group, which is working to achieve the goals globally, under the leadership of the UN Secretary General Ban ki-Moon.

Yunus delivered a public lecture on microcredit programme at the Ewha Women's University. The Ewha Centre for Peace Studies organised the lecture held at the Press Centre ofn Seoul.

The founder of Grameen Bank was received by the president of the university and had lunch with deans and faculty members.

Yunus was made the Distinguished Professor of Ewha Women's University in 2007, and is invited to give a lecture every year at the university. 

Special MY report 17 August :

:I am still on the road, travelling from Seoul to Bangkok on way to dhaka. After Washington I came to Seoul to meet Parliament members, a Presidential candidate for next year's Presidential election, addressing young girls of Ewha Women's University, where I am a Distinguished Professor of the university.

Korean young people are very interested in social business. I am trying to get some of them to come to Vienna in Nov.

Great to meet you in Wash. I am sorry that I had to rush off to an interview. Then I could not see you after that. CONGRATULATIONS TO you for bringing out the second issue of the SB Journal. That is quite an accomplishment.
















Views: 94

Reply to This

Replies to This Discussion

Asia’s new model company

Samsung’s recent success has been extraordinary. But its strategy will be hard to copy

Oct 1st 2011 | from the print edition



THE founders of South Korea’s chaebol (conglomerates) were an ambitious bunch. Look at the names they picked for their enterprises: Daewoo (“Great Universe”), Hyundai (“The Modern Era”) and Samsung (“Three Stars”, implying a business that would be huge and eternal). Samsung began as a small noodle business in 1938. Since then it has swelled into a network of 83 companies that account for a staggering 13% of South Korea’s exports. The hottest chilli in the Samsung kimchi bowl is Samsung Electronics, which started out making clunky transistor radios but is now the world’s biggest technology firm, measured by sales. It makes more televisions than any other company, and may soon displace Nokia as the biggest maker of mobile-telephone handsets.

Small wonder others are keen to know the secret of Samsung’s success. China sends emissaries to study what makes the firm tick in the same way that it sends its bureaucrats to learn efficient government from Singapore. To some, Samsung is the harbinger of a new Asian model of capitalism. It ignores the Western conventional wisdom. It sprawls into dozens of unrelated industries, from microchips to insurance. It is family-controlled and hierarchical, prizes market share over profits and has an opaque and confusing ownership structure. Yet it is still prodigiously creative, at least in terms of making incremental improvements to other people’s ideas: only IBM earns more patents in America. Having outstripped the Japanese firms it once mimicked, such as Sony, it is rapidly becoming emerging Asia’s version of General Electric, the American conglomerate so beloved of management gurus.

Tomorrow’s GE or tomorrow’s Daewoo?

There is much to admire about Samsung (see article). It is patient: its managers care more about long-term growth than short-term profits. It is good at motivating its employees. The group thinks strategically: it spots markets that are about to take off and places huge bets on them.

The bets that Samsung Electronics placed on DRAM chips, liquid-crystal display screens and mobile telephones paid off handsomely. In the next decade the group plans to gamble again, investing a whopping $20 billion in five fields in which it is a relative newcomer: solar panels, energy-saving LED lighting, medical devices, biotech drugs and batteries for electric cars. Although these industries seem quite different from each other, Samsung is betting that they have two crucial things in common. They are about to grow rapidly, thanks to new environmental rules (solar power, LED lights and electric cars) or exploding demand in emerging markets (medical devices and drugs). And they would benefit from a splurge of capital that would allow large-scale manufacturing and thus lower costs. By 2020 the Samsung group boldly predicts that it will have sales of $50 billion in these hot new areas, and that Samsung Electronics will have total global sales of $400 billion.

It is easy to see why China might like the chaebol model. South Korea’s industrial titans first prospered in part thanks to their close ties with an authoritarian government (though Samsung was not loved by all the generals). Banks were pressured to pump cheap credit into the chaebol, which were encouraged to enter dozens of new businesses—typically macho ones such as shipbuilding and heavy industry. Ordinary Koreans were chivvied to save, not consume. South Korea grew into an exporting powerhouse. Does this sound familiar?

In China, too, the state draws up long-term plans, funnels cash to industries it deems strategic and works hand-in-glove with national champions, like Huawei and Haier (see article). Some of Beijing’s planners would love to think that state intervention is the route to world-beating innovation. No doubt inadvertently, Samsung feeds this delusion.

Of hindsight and survivor bias

For delusion it is, on three levels. Most broadly, South Korea’s prosperity owes less to dirigisme than China’s dirigistes believe, and nothing to dictatorship—South Korea is now a democracy, and much happier for it. Second, the chaebol system has been less beneficial for South Korea than Samsung’s success might imply. Some of the state-directed cheap credit that powered the chaebol produced superb companies, such as Samsung Electronics and Hyundai Motors. But it yielded some costly failures, too. During the Asian financial crisis of 1997-98, half of the top 30 chaebol went bust because they had expanded recklessly. Daewoo, the Great Universe, is no more.

Defenders of the chaebol say that the crisis spurred reforms, curbing the tendency of the chaebol to overborrow and overexpand. They don’t hog credit as much as before—Samsung Electronics now generates oceans of cash to finance its expansion plans. But in general the giants still crowd out small entrepreneurial firms: a former boss of Samsung Electronics has warned that South Korea has too many eggs in too few baskets. And despite a decade of political reform, the ties between the chaebol and the state are still too cosy. President Lee Myung-bak (the ex-boss of a Hyundai firm) has pardoned dozens of chaebol bosses convicted of corporate crimes.

 Find out how much of an Apple iPhone is actually a Samsung with our "teardown" infographic 

As for Samsung, it is an admirable company, packed full of individual successes that managers (and not just ones in Asia) should study. But inevitably it has not always got everything right—who now drives a Samsung car? And its overall success is not easily replicable. Samsung is patient and bold because the family of its late founder, Lee Byung-chull, wants it to be. Family control is guaranteed by a complex web of cross-shareholdings. This is fine so long as the boss is as brilliant as the late Lee or his son, Lee Kun-hee, the current chairman. But if the founder’s grandson, who is being groomed for the top job, fails to measure up, he will be harder for the company’s shareholders to oust than his peers at GE, Sony and Nokia.

To that extent, for all its modern technology, Samsung’s story is an old one writ new—the well-run family firm, with a strong culture and a focus on the long term, which has made good use of an indulgent state. Celebrate it on those grounds and Asia’s new model has something going for it. Just don’t expect it to keep going at its current rate for ever

part 2 of The Economist special on Samsung



The next big bet

The world’s biggest information-technology firm is diving into green technology and the health business. It should take care; its rivals should take notice

Oct 1st 2011 | SEOUL | from the print edition



IN 2000 Samsung started making batteries for digital gadgets. Ten years later it sold more of them than any other company in the world. In 2001 it threw resources into flat-panel televisions. Within four years it was the market leader. In 2002 the firm bet heavily on “flash” memory. The technology it delivered made the iPhone and iPad a reality, and made Samsung Apple’s biggest supplier—and now its biggest hardware competitor.



The handsome payoffs from these ballsy bets made the South Korean company a colossus; last year its sales passed $135 billion. Now it is embarking on a similarly audacious plan to move away from electronics into technologies where it barely has a presence today. It intends to spend $20 billion over ten years on solar panels, light-emitting diodes (LEDs) used for lighting, electric-vehicle batteries, medical devices and biotech drugs. These businesses shift Samsung away from easily substitutable gadgets towards more essential industrial goods (see table)—or from “infotainment” to “lifecare”, as the company puts it. Just as electronics defined swathes of the 20th century, the company believes green technology and health care will be central to the 21st.

With these plans Samsung sees itself bringing technologies that are vital for society into much broader use. The company has always had an eye for more than just the bottom line, seeking both to epitomise and to further the progress of its home country. Now it talks idealistically of improving the world by driving down the costs of zero-carbon power and providing poor countries and rural areas with medical equipment and drugs that they cannot afford today.

But the plans are also an ambitious industrial power play, one that challenges some of the world’s biggest companies. Success would raise Samsung to new heights. Failure could lead to the firm losing what it already has, no longer able to flourish just as a maker of commodity gadgets and components.

The 83 firms that are tied together in Samsung’s remarkably complex structure provide 13% of South Korea’s gross exports. Samsung Electronics, the biggest of them, started making transistor radios in 1969, and has since evolved into the world’s leading manufacturer of televisions and much else. It is on track to unseat Nokia as the biggest maker of mobile phones by volume next year. Interbrand, a consultancy which seeks to calculate brand value, puts it in the world’s top 20, ahead of Sony and Nike. It has come second only to IBM in the number of patents earned in America for five years running.

Yet Samsung wants to diversify away from consumer electronics, a market that suffers from falling prices, thin margins, fast product cycles and fickle customers. Chinese rivals may do to Samsung what Samsung did to Western and Japanese firms in the past. “The majority of our products today will be gone in ten years,” Samsung’s patriarch and chairman, Lee Kun-hee, told executives in deliberately alarmist tones last January.

To survive, he said, the company must not only go into the new businesses it has identified, but open itself up to work with partners and even make acquisitions. Samsung has long been a closed world from that point of view, a disposition reinforced after the disastrous acquisition of a PC maker in the 1990s. But now the company knows it needs new skills, sales channels and customers.

Doing it the Samsung way

By 2020 Samsung’s Mr Lee wants the five new business areas to provide $50 billion of revenue, and Samsung Electronics to be a $400 billion company (for all his provocations to his staff, there are still going to be a lot of flat screens and memory sold). It is a brash goal, admits Inkuk Hahn of Samsung’s strategy team. But ten years ago people were incredulous when Mr Lee insisted that Samsung, which then had sales of $23 billion, could be the number-one technology company, with sales of $100 billion. It claimed that crown just eight years later. “This is why you have to believe us,” Mr Hahn insists.

The new businesses look remarkably disparate, but they share a need for big capital investments and the capacity to scale manufacture up very quickly, talents the company has exploited methodically in the past.

Samsung’s successes come from spotting areas that are small but growing fast. Ideally the area should also be capital-intensive, making it harder for rivals to keep up. Samsung tiptoes into the technology to get familiar with it, then waits for its moment. It was when liquid-crystal displays grew to 40 inches in 2001 that Samsung took the dive and turned them into televisions. In flash memory, Samsung piled in when new technology made it possible to put a whole gigabyte on a chip.

When it pounces, the company floods the sector with cash. Moving into very high volume production as fast as possible not only gives it a price advantage over established firms, but also makes it a key customer for equipment makers. Those relationships help it stay on the leading edge from then on.

The strategy is shrewd. By buying technology rather than building it, Samsung assumes execution risk not innovation risk. It wins as a “fast follower”, slipstreaming in the wake of pioneers at a much larger scale of production. The heavy investment has in the past played to its ability to tap cheap financing from a banking sector that is friendly to big companies, thanks to implicit government guarantees much complained about by rivals elsewhere.

From crisis to crisis

Competitors also balk at the way that Samsung scales up quickly to supply parts to other firms as well as to price its own gadgets keenly. Supplying the rest of industry drives down Samsung’s costs yet further, with its rivals in effect financing its success. This strategy can create problems. Samsung is Apple’s most important supplier in the smartphone and tablet-computer markets. Samsung components, which include all the product’s application processors, account for 16% of the value of an iPhone. It is also Apple’s greatest competitor in those markets. Apple is now suing the socks off the company for copying the look and feel of its products. At the same time it is urgently seeking new ways to diversify its supply chain.



Many companies saw the potential of technologies such as liquid-crystal panels, flash memory and rechargeable batteries. But few could or would invest billions in a single shot. That Samsung could is in large part due to a cult of personality around Mr Lee, who likes to keep things shaken up. “Change everything but your wife and children,” he exhorted managers in 1993. Three years later he lit a bonfire of 150,000 gadgets because some were defective. Other bosses often need to face a crisis—a “burning platform”, in the memorable phrase of Stephen Elop, Nokia’s boss—before they make changes. Samsung does so when things are going well. The company has pushed out older managers and restructured its divisions over the past two years despite posting record profits even in the global financial crisis.

Management by perpetual crisis is perhaps a reflection of the company’s national roots. In 1960, when the Samsung companies were taking off, South Korea, battered by recent war, had a GDP the same size as Sudan’s; its last dictatorship fell only two years before the Berlin Wall. Today, though it enjoys one of the world’s highest living standards, South Korea is still an emerging market in some ways, with endemic corruption and some economic structures that border on the feudal.

 Find out how much of an Apple iPhone is actually a Samsung with our "teardown" infographic 

Samsung, like its host country, has a foot in both the industrialised and developing worlds, which it has used to its advantage. While it has always produced things for major IT firms and Western consumers, it has aimed products at poor countries, too. This not only gave Samsung scale, but also market shares in the world’s fastest-growing economies. Whereas Western firms reeled in the recent recession, Samsung flourished, buoyed by sales in markets that never stopped growing.

From laptop to rooftop

Some of the five new businesses Samsung has set its sights on are not that far from what the company does already. Its experience in semiconductors and flat-screen televisions fits easily with solar cells and LED lighting: the technology, materials and production processes are similar. Likewise, its expertise in batteries for gadgets smooths the way for making car-sized ones. The firm wants to apply the magic of ever cheaper chips to medical devices as it did mobile phones. Even drugs aren’t so far afield when one sees them in business-process terms: high-volume manufacturing with low defect rates. In all these fields Samsung believes it can sit—rather as Korea does geographically—in between China, with its cheap products, and Japan, with its costly, high-quality ones.

In solar energy Samsung plans to make panels for both domestic and industrial use. Producing panels for “utility-scale” projects may allow it to lower prices for the residential market. Changsik Choi, who heads the business, also speaks optimistically of a “brand halo effect”: consumers whose living rooms are stuffed with Samsung products may choose the company for their rooftops too.

Samsung’s dominance of the television market has already made it the world’s second-largest maker of LED components (Japan’s Nichia is the first). Since they consume a fraction of the power of conventional light bulbs, last longer and avoid some of the drawbacks of compact fluorescents, the first-generation alternative, LEDs are expected eventually to become the norm for all sorts of lighting; the market is growing by 65% a year. Samsung already sells LED lighting in South Korea and plans soon to expand abroad. In this market it will hew to its strategy of supplying parts to others, thereby lowering costs for its own products.

In electric-vehicle batteries Samsung has joined forces with Bosch, the world’s biggest supplier of car parts and a fount of expertise on power- and engine-management. Samsung sees their partnership, SB LiMotive, as crucial since the car business relies on close ties between carmakers and their suppliers. Some carmakers, like Nissan and Toyota, will continue developing their own batteries, but Samsung thinks that many carmakers will not want to be in the battery business, just as they are not in the petrol business, and that they will be a rich source of demand. Chrysler and BMW are among SB LiMotive’s first customers.

For medical devices Samsung aims to use information technology to lower costs, add features and make devices accessible to more people, particularly the poor. For example, it is developing X-ray machines that expose patients to less radiation and do away with physical film. Last year Samsung began selling a machine for testing patients’ blood chemistry that is smaller, cheaper, uses less power and offers more functions than rivals’ devices. In April it bought Medison, a South Korean maker of ultrasound equipment, as a way to get further into the market: it is looking at buying body-scanner firms too.

In biotech drugs the company plans to begin as a contract manufacturer of biosimilars (generic versions of biotech drugs) and has partnered with Quintiles, a drug outsourcer. The strategy lets Samsung gain experience while assuming little commercial risk. It is building a factory outside Seoul and has already begun developing biosimilars for medicines with patents that expire in 2016.

Incumbents and incomers

The markets are certainly promising, but they entail huge risks. Nor is the size of Samsung’s commitment quite on a par with the overwhelming force it has deployed in the past. The solar and LED businesses already struggle with oversupply, meaning Samsung may get walloped by the same dramatic price erosion as it has seen in liquid-crystal flat panels. Electric-vehicle batteries may be in similar straits if demand for the cars they might power remains sluggish. They are also in the crosshairs of Chinese companies, as are medical devices and drugs. In a bid to escape the vagaries of consumer electronics, Samsung may be ploughing headlong into the areas most ripe for invasion by a new breed of emerging-market titans.

Acquisitions, a way of life in the drug business, are also a challenge: knowing what to buy and when is a skill that Samsung has never developed. The same applies to dealing with government regulators: Samsung’s towering importance at home may give it a false confidence in its ability to handle governments elsewhere.

Its position as a domestic titan could be a hindrance in other ways. Working with partners entails sharing information and a view of joint success that is at odds with its insular corporate culture. The international talent the company will need to attract is also less likely to be moved by the admonishments and appeals to national grandeur that Mr Lee has used to build Samsung’s success. They might, indeed, find such things wearisome.



Samsung’s rivals are ready for a fight. Philips and GE have been preparing to compete with firms in emerging markets for years, devising cheap products and building on existing relationships with clients. Toshiba plans to spend an extra $9 billion in the energy and environment sectors over the next three years on top of its normal capital expenditure, research and acquisitions. Fumio Ohtsubo, Panasonic’s boss, praises his Samsung rivals for their low prices but believes his company develops superior technology. “If we can get the same conditions in terms of free-trade agreements, low corporate taxes and other incentives, then we should be able to compete,” he says.

In medical devices Samsung will be up against firms like Philips, Siemens, Toshiba, Hitachi and GE (for which Samsung made medical equipment between 1984 and 2004). GE’s Indian office famously reduced the cost of an electrocardiogram machine from $2,000 to $400. And the fact that hospitals prefer to buy different equipment from a single vendor so that, in principle, everything works together puts a maker of this-and-that at a disadvantage, even if it is cheap.

Perhaps the biggest challenge, though, will be one of succession. The 69-year-old chairman’s son, Jay Y. Lee, 43, was named president last December. Educated in Japan (like his father and grandfather, the firm’s founder) and at Harvard Business School, he has been groomed from the start. His first test will be reforming the jumble of opaque, interlocking relationships and conflicts of interest that passes for Samsung’s corporate governance.

The “Samsung group”, as it is often known, has no legal identity. The 83 firms sit under an umbrella company called Everland, in which the Lee family has a controlling 46% stake. The family also has minority positions in other Samsung firms, which often hold shares in other members of the group, and indeed in Everland. For example, the family and related interests own 21% of Samsung’s life-insurance firm, which owns 26% of its credit-card business, which in turn owns 26% of Everland. Get it? Nobody other than the Lees really does.

The company must change if only to avoid South Korea’s devastating 50% inheritance tax after the elder Lee’s passing (his father died at the age of 77). That would further whittle the family’s stakes, notes Shaun Cochran of CLSA, a broker. He expects a holding company to be formed, so investors have clearer exposure to the different parts of Samsung’s businesses. The younger Lee will also need to root out corruption, which his father often complained about without rising above it; the elder Lee’s 2008 conviction for tax evasion was pardoned in 2009 on the ground of his importance to the country.

When the dealing’s done

Chairman Lee’s fear is that successful companies get flabby when they hit middle age. He saw that in Sony, founded in 1946, which has been struggling since the 1990s. Samsung Electronics turned 40 in 2009, which prompted Mr Lee to lay the groundwork for the five new growth areas. Diversification is essential. In the mid-1990s almost all of its profits came from DRAM memory chips: when the market soured in 1996, its profits shrivelled by 95%.

Samsung may be swapping “infotainment” for “lifecare”—but it is still in the hardware business, and that may leave it more vulnerable than it thinks. Many of today’s computer and electronics giants are getting out of the manufacturing businesses altogether. IBM has shifted to services, trailed by Japan’s Fujitsu, while Philips and Siemens both sold their IT businesses to focus on other areas. But getting out of things is not something Samsung is good at. Despite a commitment to perpetual crisis, a mixture of implicitly subsidised capital, weak shareholder pressure and family control has allowed it to stick too long with dodgy decisions—such as its move into cars, brought short only by the Asian financial crisis, and its only-now-ended commitment to hard-drive manufacture.

Even with a $20 billion bankroll, bets can be spread too thin. Perhaps the biggest risk for Samsung is not that none of its wagers will win, but that it won’t be able to stop betting on the ones that don’t. Knowing the right time to bet is a great gift. So is knowing the right time to walk away.



Reply to Discussion


Which World Class Projects urgently need pro-youth investors?

About Pro-Youth economics at Norman Macrae Foundation online library of norman macrae - The Economist's Unacknowledged Giant -videos 1 2 -fansweb  NMFoundation- youth projects - include yunuschoolusa


fullest press reports  Grameen Brand Partnership Architecture

exponential impact advisory: the social business youth networks inspired by muhammad yunus -without which millennium goal actions networks would be way behind are worth far more than any individual parts according to Norman Macrae Foundation  trilliondollaraudit methodology and charter notespace

Beyond the extraordinary investment of the members bank at Grameen, and the approximate third share its members foundation holds in grameenphone, here is our Unofficial League Table of Most Impactful Social Business Investments around yunus - last update 1 dec 2012

! Grameen Solar

Grameen Mobile Nursing nets and college

3 Portfolio of investments linkedin by Japan

4 Portfolio of youth-led networking inventions in US educationsystem  tertiar and secondary - transparency note NM Foundation has minor donation/loan interest

5 Investments in Grameen as collaboration brand linked in out of paris- the origin of global social business partnership funds

6 OpenTech investments of Grameen Intel


-------- while not controlled by yunus we see wholeplanetfoundation microcredit investment table and conscious capitalsm movements and hugely important to advancing pro-youth economicsmission of friends of youth and yunus


email chris.macrae@yahoo.co.ukif you have questions or recommendations of entries that should be in this league table

-please read notes about what pro-youth economists mean by superapps being most impactful

Nov 2011 Europe's last super summits?- G20 3-4 Cannes; SB ac 9 gen 10-12 vienna; MC near madrid 14-17  European Union Nov 18 

click pic to download journal of pro-youth economics sampled by post to 3000 leaders chosen by Yunus

papers world microcreditsummit 2011


2010s Global Village Economics Races- will youthand societies win the race to:

  • bankabillion people directly on mobile phones - if so 10 times lower transactional costs can change every assumption of economics
  • Good News Media- even before Rupert Murdoch's expose filmakers like Will Wenders showed there is notimefelt to empower youth with joyful world service media
  • Will first 10000 entrepreneurial rural telecentres be owned mutually for poorest in communities or by Bill Gates- how does this depend on whether giving circles of billanthropists use microeconomic or macroeconomics's opposite valuation metrics?


SB Stockmarkets:

  • A) banking & financial services
  • B) green including energy and food and water
  • C) goodwill media, tech and edu
  • D) health

Next Pro-Youth & Ynuus Deadlines

18 Januray 2013 Alabama

30 January 2013 Tokyo

rsvp chris.macrae@yahoo.co.ukto share news of these and other key youth and yunus events




India 2011 Law on Microcredit


BBC and Murdoch 

Call for microcreditsummit to launch SB stockmarket of banks

© 2023   Created by chris macrae.   Powered by

Report an Issue  |  Terms of Service