[SUPER RICH] Education: A long-term business project

By Korea Herald

Korea’s superrich take over universities for investment, charity and tax cuts

  • Published : Aug 11, 2014 - 21:19
  • Updated : Aug 11, 2014 - 21:19
There’s an old Korean saying that education is a century-long investment. It means that education is just that important and requires a long-term perspective.

Business moguls have heeded this saying by making long-term investments in the educational sector.

Whether it was a means for securing better talent on-campus, a part of ongoing corporate social responsibility programs or just an attempt to get tax cuts, local conglomerates have always made sure schools were a part of their business.

Tailoring on-campus talent

Samsung Group, the country’s largest business group, in 1996 acquired Sungkyunkwan University in Seoul. Since then, the reputation of the school, which up to that point had been mostly famous for a history dating back to the 1300s as a Confucius and ethics educational institution, has shot up.

The university is currently cited among the best universities in the country in the science and technology sectors.

The main reason behind the popularity was of course its relationship with Samsung, which could lead to possible jobs after graduation. Samsung in 2007 established the IT Convergence Department focusing on the development of mobile phones and parts. Those who graduated from the department were given advantages in the recruitment process for Samsung Electronics and in 2009, all graduates landed a job at the tech firm.

Samsung Medical Center ― with branches such as Samsung Seoul Hospital and Gangbuk Samsung Hospital ― is also a good training hospital for medical school students. The hospital was born from the medical school that had been established at Sungkyunkwan.

“It is widely known that Sungkyunkwan was picked (by Samsung) because of the medical school. Samsung wanted to enter the medical industry and Sungkyunkwan’s relatively new medical school established in 1994 was a perfect choice. There was little system established and plenty of room for both parties to design the curriculum together. The school also became a good source of training for Samsung doctors,” an industry insider said.

For Hanjin Group, the mother company of Korean Air, Inha University in Incheon has been its cradle of talent since 1968. It is also where group chairman Cho Yang-ho received a doctorate degree.

Inha’s aerospace department’s curriculum is famous for being practical, and for providing on-field knowledge for aerospace companies including Korean Air. The school has also established a logistics department to nurture talent for logistics companies, including Hanjin.

Doosan Group acquired Chung-Ang University in 2008. Though it is still too early to tell whether the school is a good stepping stone into the company, industry watchers suggest that the chances are high because the business group has invested hundreds of billions of won into it. 

In Ulsan, the hometown of Hyundai Motor Group, the University of Ulsan and Ulsan College are run by Hyundai Heavy Industries.

Cheonan Yonam College and Yonam Institute of Digital Technology were established by LG honorary chairman Koo Cha-Kyung, the chief of the board of directors. The school focuses on technology education.

It isn’t only the students who benefit from these ties between the corporate sector and academia, as professors and those working for those companies have a chance to see what it’s like to work on the other side.

For instance, three Sungkyunkwan University professors including Song In-man at the business school have been appointed as outside directors of Samsung affiliates. Former Chung-Ang University president Park Beom-hoon was appointed the outside director of Doosan Engine. Doosan sends its executives to oversee school management.

“Such appointments are intended to bring a breath of fresh air to both sides,” a Doosan official said. 

Corporate social responsibility

Conglomerates have also donated money to establish new buildings on the campuses.

According to industry insiders, 11 corporations have financed the construction of 38 buildings at major universities in Seoul.

They are usually regarded as corporate social responsibility programs by company management, but some beg to differ. The buildings are named after the companies or their founders, leaving extra opportunities for promotion.

“In a way, it is a great promotion opportunity. Every time those elite students call the name of the buildings, they are also calling names of the chaebol,” a university professor said.

For example, Hoam Faculty House at Seoul National University is named after Samsung Group founder Lee Byung-chul’s penname, Hoam. The conglomerate is also responsible for the establishment of Ewha Samsung Education Culture Center which is used as language education center, and Ewha-Samsung Global Tower, both at Ewha Womans University.

The Chung Mong-koo Institute at Hanyang University was funded by the Hyundai Motor Group chairman. He also supported another business school building at Korea University.

The SK Telecom Business School building at Ewha Womans University and SK Business School building at SNU were funded by SK Group.

At the same time, donations to school projects are more than a corporate social responsibility because schools are classified as not-for-profit organizations, granting tax cuts for donors. According to tax authorities, about 100 billion won ($96.9 million) worth of tax reductions were given to the business circle in 2013. 

Moguls become directors

On July 28, former Doosan Group chairman Park Yong-hyun took a unique career path: He was elected the chairman of Seoul National University’s board of directors. Park is the first non-professor to head the school’s management.

Park, who passed the throne to his younger brother Park Yong-maan in 2012, is no stranger to the nation’s most prestigious university. He graduated from its medical school and worked as a medical doctor and president at the Seoul National University Hospital before joining the business world in 2007 as Doosan Engineering and Construction’s president.

Park is expected to tackle various issues following the school’s incorporation in 2011. “He has an understanding in both industries and will be able to juggle all the conflicting issues,” an SNU insider said.

Park’s older brother Yong-sung, who also served as chairman of Doosan Group from 2005 to 2009, heads the board of directors of Chung-Ang University.

By Bae Ji-sook (