8 out of 10 Major Companies to Maintain Investment in Second Half... "Expanding AI and Regional Investments"

Korea Economic Association Surveys Investment Plans of Top 500 Companies for Second Half of the Year
More Companies Plan to Increase Investments Than Reduce Them in the Latter Half
One in Four Companies Considering Expanding Regional Investments; Financial Support Is Key

Despite the prolonged period of high exchange rates and inflation, major companies' overall investment policies have remained largely unchanged. Eight out of ten large corporations responded that their investment level in the second half of this year would remain similar to that of the first half, and more companies planned to increase rather than decrease their investments compared to the first half. Additionally, one in four large corporations is reportedly considering increasing investments outside the Seoul metropolitan area within the next three years.

According to a survey conducted by the Korea Economic Association, which commissioned the polling agency Mono Research to survey the top 500 companies by sales on their "Investment Plans for the Second Half of 2026," 79.2% of responding companies (106 companies) answered that they plan to maintain investment levels similar to those in the first half. The proportion of companies planning to expand investments in the second half was 15.1%, which was more than twice the proportion of those planning to reduce investments (5.7%).

Companies planning to expand investments in the second half cited the following main reasons: securing future growth engines such as artificial intelligence (AI) and high-tech industries (33.3%), strengthening competitiveness through preemptive investments (29.2%), and improved market conditions and increased demand (20.8%).

In contrast, companies planning to reduce investments pointed to the following as main reasons: prolonged pressures from high exchange rates and raw material prices (38.9%); worsened profitability and increased financing burdens (22.2%); and the slowdown of the global economy and sluggish demand (16.7%).

Reasons for Investment Expansion. Korea Economic Association.

Regarding changes in investment strategy due to the spread of AI technology, companies responded as follows: increased investment in automation of work and production processes (43.7%), strengthening of AI-based research and development (R&D) (20.8%), no significant change from existing investment plans (17.3%), increased investment in AI and digital technologies (12.3%), and new business entries based on AI (3.8%). These results indicate that companies are prioritizing AI as a means to enhance productivity and competitiveness rather than simply as a gateway for new business ventures.

When asked about policy tasks needed to expand AI investments, companies highlighted the following: support for costs related to AI adoption and transformation (35.2%), fostering AI professionals (21.7%), support for AI research and development (R&D) (15.7%), and improving regulations on AI data utilization (15.1%).

With recent policies promoting regional investments such as the "Five Sectors, Three Special Zones," 27.4% of respondents said they were considering increasing investments outside the Seoul metropolitan area over the next three years, meaning that more than one in four companies is now considering more regional investment. In contrast, 51.9% answered that they had no such plans at present, while 20.7% were unsure.

Companies cited tax cuts including corporate tax reductions and financial support such as subsidies (36.2%) as the most important conditions for deciding on new regional investments. This was followed by the establishment of an industrial ecosystem including partner enterprises (18.2%), expansion of logistics and transportation networks (13.2%), and the enhancement of industrial infrastructure such as electricity and water supply (12.9%).

The Korea Economic Association stressed that to turn companies' intention to invest outside the Seoul metropolitan area into actual investments, it is necessary to provide both financial support and improvements in investment conditions.

When asked to rate the domestic investment environment, companies gave an average score of 58.3 out of 100, a slight increase from last year's 57.2 points. However, the Korea Economic Association pointed out that the rise is marginal and still insufficient for companies to actually feel improvements in the investment environment. The association emphasized the need to more actively resolve on-the-ground difficulties faced by companies.

Currently, companies identified the following as the most significant obstacles to investment: rigidity of the labor market and uncertainty in labor-management relations (44.0%); tax burdens and quasi-tax burdens (20.8%); investment-related permit and site regulations (16.4%); and regulations related to environment, safety, and ESG (environment, social, governance) (11.6%).

Companies said that for improvement of the domestic investment environment, the government should first pursue the easing of investment-related regulations such as permits and site restrictions (24.5%). This was followed by interest rate stabilization and improvements in financing conditions (19.8%), revitalization of the domestic market (19.2%), and expansion of tax support for investments and R&D (research and development) (13.8%).

The Korea Economic Association analyzed that companies continue to feel regulatory burdens throughout the investment process, and that recent concerns about possible key interest rate hikes have led to increased demands for improved financing conditions.

Lee Sang-ho, Head of Economic Division at the Korea Economic Association, emphasized, "Despite difficult domestic and international conditions, companies are maintaining their investment stance to secure future growth engines. For these investment plans to be realized, it is essential to create an investment environment that is felt by companies, including regulatory improvements and the formation of stable financing conditions."

This content was produced with the assistance of AI translation services.