Samsung one of the leading tech companies in the world. Samsung was not founded in a garage or a college dorm room. Let’s read about the Rich History & it’s Origin which leads to one of the biggest tech giants in the world.
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The Decolonization of Japan
Samsung arose in the aftermath of Korea’s most catastrophic conflict. To state it straightforwardly, Korea did not have a good first half of the twentieth century. After a century of political intervention, the Japanese Empire reduced Korea to the status of a puppet state, formally annexing it in 1910. As one might expect, the Japanese colonization was severe, with many Korean farmers and entrepreneurs being forced off their fields and out of their industries as an ambitious colonial power.
Japan was keen to colonize Korea with its own people, which is why Japanese ownership of Korean land increased from 8% in 1910 to more than 50% just 20 years. For a time, it appeared that the Korean country would perish since the Japanese not only compelled the Koreans to alter their names, but also prevented schools from even teaching the language.
It required the disastrous defeat of the Japanese during WWII for Korea to regain its independence. Despite the instability of American and Soviet military authority in 1945, the Korean people remained cautiously optimistic. One such optimist was Lee Byung chul, one of the few Koreans fortunate enough to have launched their own business under the Japanese rule; in 1938, he founded Samsung, a small shipping firm that specialised in exporting groceries.
The Rise of Korea’s Self Reliance and Samsung
Samsung had a significant competitive edge from the outset. It was located in Massa, a city on the southeastern coast that the Japanese used as their main departure from which they carried all of Korea’s extracted resources. Lee was not a real collaborator, but his service to the authority earned him numerous advantages that ordinary Koreans did not have, such as bank loans from Japanese banks. While Samsung’s Japanese era was adequate for the moment, Lee’s newly independent South Korea provided enormous prospects.
The years immediately following independence were extremely profitable for almost every Korean businessman for a single factor: while the Japanese bureaucrats were gone, their assets remained, and the Korean government was handing them out left and right. The first ten cents on the dollar Everything seemed to be going well for Samsung as he worked to restore the country, until the Korean War came out. The invasion of North Korea swiftly devolved into a proxy war between the Soviet bloc and the capitalist West, with sophisticated weaponry destroying large towns and industrial centres.
During the three years of war, most of South Korea’s industry were devastated. For example, at the conclusion of the war, over 60% of textile and chemical facilities were destroyed, as was half of the country’s rail. Korea’s infrastructure was in serious need of restoration, and its enterprises were too young to maintain its economy, which was truly on its last legs. Prices skyrocketed when the South Korean government was compelled to generate more money to fund the country’s massive military spending.
The hyperinflation was so severe that Korea’s money in circulation was 24 times higher in July 1953 than it had been in the previous three years. Previously, South Korea’s and Samsung’s future looked more unclear, but Uncle Sam had their back. Following the war, the United States developed effectively the Korean equivalent of the Marshall Plan, with the United Nations quickly following suit throughout the 1950s.
Samsung’s expansion into manufacturing and additional sectors
Three billion dollars were sent to the Korean government, which subsequently selected medium and big firms deserving of investment. Samsung was one among the corporations that benefited from this humanitarian money, no doubt due to its personal ties with South Korea’s first president. In reality, the amount of governmental assistance that Samsung got throughout his reign was astounding. By enforcing very severe export limitations, the government effectively granted Samsung a free pass, allowing them to become the largest exporter of scrap iron. For example, after the war, American aid funds funneled into Samsung enabled it to develop beyond mere transportation and into genuine production.
In 1953, they began manufacturing sugar and flour, followed by textiles a year later. Buying destroyed factories with American money and then repairing them was such a profitable business that Samsung grew at a rate of 93 percent each year. However, disaster help was only half of the equation in the 1950s; the Korean government also extended huge credits to Samsung at extremely competitive rates.
Lee was one of the biggest beneficiaries of government lending through government affiliated banks, and what’s really funny is that once he got the money, he turned around and started buying those very same banks. By the end of the decade, Samsung had taken over three of the banks associated with his friend’s regime and was also branching out into insurance and chemicals.
Samsung into Electronics
In 1961, Lee was probably not too concerned because the Korean economy had opened up and was focusing on massive export growth, for which Samsung was perfectly positioned after a decade of state-funded preparation. Thus, despite a second regime change in 15 years, Lee was once again in the good graces of the Korean government. The most popular Samsung division we know today was also created with government aid.
In 1969, the government introduced laws that reduced taxes by half for enterprises engaged in the electronics industry, which at the time was dominated by Samsung Electronics. During the 1970s, Samsung became a symbol of Korean industrial development by helping to put televisions and washing machines into every family’s house, before moving on to semiconductors and, more recently, smartphones.
Of course, none of this would have been possible without Lee’s excellent placement close to whatever political authority was in control at the moment. Fortunately for everybody, Samsung and the government still work together today. Samsung is a public corporation, or at least its largest divisionist, so you can easily profit from Lee’s long-standing connection.