Black Americans can learn important lessons about financial independence, business expansion, and generational wealth-building from Korean chaebols, which are massive family-controlled corporate enterprises that have amassed enormous wealth via ownership, diversification, and savvy government relationships.
Korean chaebols, which are family-controlled large business conglomerates, have had an influence on South Korea's economy. Galvanizing companies like Samsung, Hyundai, and LG dominated commerce in South Korea but also contributed to the overall rapid economic growth in a young democracy and post-war economy. Understanding how the chaebols came into existence, utilized for wealth creation, and what lessons to be drawn for Black Americans, are valuable context to understand economic empowerment and wealth building.
Chaebol, which literally means "wealthy family" or "financial clique," refers to the family-owned large conglomerate businesses in South Korea. Chaebol-style business ownership was first developed in the 1960s, supported by President Park Chung Hee's goal of industrializing South Korea after the Korean War. The Park administration supported select families with financial incentives, provided preferential regulation, and competition minimized; allowing select families to manage multiple industries and grow together.
Chaebols played a unique role in catalyzing South Korea from a primarily agrarian to an industrialized country. By the 1980s chaebols had become behemoths in their respective industries (electronics/technology, automotive, and construction) and centrally important to the South Korean economy as reflected in GDP. As the value contribution to the economy increased chaebol approach has received scrutiny centered around the focus of monopolies, political implications, and recent corruption scandals.
The connectivity pattern of wealth creation is a deliberate increase; one that involves governmental support and family control. Chaebols have continued through economic downturns of 2008 and COVID-19 due to proximity of capital located abroad and to family ownership of wealth to support families to remain connected. The chaebol have been strategically positioned for very high levels of success for these reasons:
Chaebols operate in a variety of industries, meaning they continue to reap profits regardless of the financial downturns of other companies. For example, Samsung has electronics and componentry, construction, insurance, and even a theme park.
The original chaebols were subsidized by loans in amounts beyond belief, with governmental and infrastructural policies promoting their benefit. Thus, growing so large and so fast wasn't a problem as interlinked operations ensured contracted protections in low-interest loans and domestic marketplaces.
While many companies in the West seek to operate for quarterly profit, chaebols maintain family ownership of the company across generations, focusing on sustainability for the long term instead of quick gains. Family-owned management passes on to family members, meaning operations continue with interest in long-term viability.
Chaebols look for international markets to secure reputations in the globalized network of economics. Where other companies may seek to stay domestic for reputation concerns, chaebols welcome the challenge—and the acknowledgment—for developing innovations on international stages.
Black Americans have not always had the opportunity to generate wealth, or wealth-generating avenues have been quashed—loans denied, capital not provided, entire industries inaccessible. Yet the chaebol model is an example of successful wealth generation despite economic restrictions.
The chaebol shows that ownership is essential. By owning all of their operations, these families determine who to hire, who to invest, who to pay, and where the money goes. For the Black entrepreneur, ownership of a business lends political control over hiring (who to hire and maintain), business decisions relating to reinvestment (opportunity to expand), and reinvestment of profits for employee needs and community opportunities.
The chaebol operates in various industries. A successful entrepreneur from the Black family can do the same. Investing across industries from real estate to technology and manufacturing creates redundancies, safety nets, and an opportunity for long-term stability across industries.
Chaebols rely on strong family and community ties. Black people can reinforce economic power by shopping at Black-owned businesses, engaging in group enterprises, and creating financial networks that prioritize social good first.
Chaebols focus on generational wealth rather than immediate profits. Black entrepreneurs can build lasting legacies by reinvesting in their businesses, mentoring future generations, and establishing financial structures that benefit their families for decades.
Korean chaebols have demonstrated how strategic business ownership, diversification, and long-term planning can lead to immense wealth and economic influence. While the chaebol system has its flaws, its core principles offer valuable lessons for Black Americans seeking financial empowerment. By embracing ownership, diversifying investments, leveraging community networks, and prioritizing generational wealth, Black entrepreneurs can build strong economic foundations that rival the success of Korea’s most powerful business families.
