National champions: The hidden engines of the world’s leading economies

They may be state-owned enterprises or private firms, but they share one defining trait: they play a pivotal role in strengthening competitiveness and enabling a country to achieve remarkable development.

In the history of the global economy, very few nations have managed to move into the high-income group without establishing large-scale enterprises with the capacity to compete globally.

This stems from the nature of development itself. At an early stage, growth mainly depends on investment capital, cheap labour and resource exploitation. However, as an economy advances, the growth driver gradually shifts towards productivity, science and technology, and innovation. This is precisely when the role of leading enterprises becomes especially significant.

Unlike ordinary businesses, leading enterprises possess sufficient resources to make long-term investment in research and development (R&D), develop core technologies, build global brands and expand partner ecosystems.

These investments often exceed the capacity of most small and medium-sized enterprises, yet they generate spillover effects for the entire economy.

Many studies by international organisations such as the Organisation for Economic Co-operation and Development (OECD) and the World Bank show that the productivity gap between countries does not stem solely from the quality of human resources, but also depends on the ability to form enterprises large enough to disseminate technology, modern management methods and new production standards to thousands of firms in the value chain.

That is also why successful economies often not only have many large enterprises, but also build broad business ecosystems around them.

Lessons from leading economies

The Republic of Korea (RoK) is one of the most striking examples. After the war, the country had almost no advantage in natural resources. Yet within just a few decades, the RoK rose to become one of Asia’s largest economies, propelled by industrial conglomerates such as Samsung and Hyundai.

What is noteworthy is that Samsung is not merely an electronics company. Each year, the group invests tens of billions of US dollars in research and development, directly employs hundreds of thousands of workers and forms a network of thousands of satellite firms in semiconductors, materials, components, logistics and services.

As a result, Samsung’s growth has not only generated revenue and export earnings, but also driven the technological upgrading of the entire RoK industrial sector.

What made Toyota successful in Japan was not only car output, but also the Toyota Production System, a lean management model that has become a benchmark for global manufacturing.

Through a network of tens of thousands of suppliers, Toyota has helped form a high-productivity industrial ecosystem in which small and medium-sized enterprises are not merely component suppliers but are also constantly innovating technology to meet increasingly stringent standards. In other words, Toyota has not only exported cars but also managerial expertise and manufacturing capability.

In the United States, Apple demonstrates that the value of a leading enterprise does not lie simply in the scale of its revenue. Alongside its well-known technology products, Apple has built an ecosystem that includes app developers, chip manufacturers, software companies, logistics firms and thousands of partners worldwide. Apple’s growth creates economic value far beyond the scope of a single company, while also driving innovation in many related fields.

Singapore has also built emblematic enterprises such as DBS and Singapore Airlines. DBS is regarded as a typical example of the transformation from a traditional bank into a technology company. Bold investment in cloud computing, big data, artificial intelligence and digital platforms has not only helped the bank improve operational efficiency, but also enabled businesses, especially small and medium-sized ones, to access financial services more quickly and at lower cost.

Meanwhile, in China, Alibaba, Huawei and Tencent are playing an important role in upgrading the economy’s technological capabilities. From telecommunications and semiconductors to electric vehicles and energy batteries, these enterprises are all investing heavily in research, thereby helping China move closer to the goal of technological self-reliance.

Although they operate in different fields, these enterprises share one thing in common: they invest strongly in innovation, build broad partner ecosystems and create spillover effects beyond the scope of their own activities.

National champions: Development momentum of economic powers

Renowned economist Michael Porter once emphasised that national competitive advantage is formed through the competitiveness of enterprises. Leading companies do not only create growth for themselves, but also drive the development of entire industry ecosystems, supply chains and high-quality human resources.

Looking at the experience of developed countries, it is clear that, in the context of increasingly fierce global competition, many nations regard the formation and development of national champions as an important strategy to create “leading engines” capable of guiding key economic sectors, attracting resources, promoting domestic value chains and expanding influence in international markets.

In practice, countries that possess strong enterprises are often better able to seize the opportunities of globalisation, raise labour productivity, attract investment and enhance their economic standing. Therefore, building enterprises of sufficient scale to compete at regional and global levels is not only a goal for enterprises themselves, but also a development trend that has been proven in many successful economies.

In the journey of every nation’s rise, national champions are not simply the result of growth, but also the force that creates growth, prosperity and sustainable competitiveness for the economy in the long term.

Behind every successful economy is often the presence of successful enterprises at national scale; and building national champions is increasingly seen as a strategic choice to promote a country’s competitiveness and sustainable development.