Companies that dominate the global market but remain unknown to the general public are called “hidden champions.” They are not miracles achieved overnight but companies built through years of accumulated experience and effort. Hidden champions focus intensely on a small, relevant group and target niche markets to rise to world-class status. In Korea, they are often called “strong small enterprises,” which succeed by excelling with a single product in a single market.

This concept of hidden champions is especially prominent in the manufacturing industry. Germany is the country with the largest number of manufacturing entrepreneurs. One of the main reasons Germany has survived many crises is the existence of numerous hidden champions. Small and medium-sized enterprises (SMEs) make up 99% of German businesses and employ over 60% of the population. This stands in contrast to Korea’s economy, which heavily depends on large corporations. In Korea, about 90% of SMEs rely on subcontracting from conglomerates. Because of this, when large companies falter, the national economy suffers greatly.

Germany, proud of its “Made in Germany” label, avoids outsourcing, unlike the United States, Japan, and Korea, where outsourcing is common. Well-known Japanese companies such as Toyota and Sony initially produced their goods domestically but later outsourced to countries like Thailand and China, resulting in a serious decline in profits. Through cooperation between the government and the private sector, Germany emerged as a leading power in Europe. Hidden champions are indeed the driving force behind Germany’s economic growth.

During the COVID-19 pandemic, many Korean SMEs gained the opportunity to become hidden champions through the development of diagnostic kits. Seegene, a Korean company that had been leading K-Bio with over 20 years in molecular diagnostics, assisted many countries by developing COVID-19 test kits. Before the virus spread in Korea, Seegene halted all ongoing research to focus solely on COVID-19 testing development. This demonstrates the agility that gives small companies their competitive edge. By concentrating on one area—molecular diagnostics—Seegene successfully targeted a niche market and became a true hidden champion of Korea.
Another Korean biotech firm, Sison Bio, developed a test kit capable of detecting COVID-19 infection within 20 minutes. Its ability to make quick decisions and adapt swiftly has strengthened its market competitiveness. Faster detection helped the company enhance its position as a competitive Korean SME. The government should support such companies through cooperative growth initiatives to help them expand overseas.

The saying “failure is the mother of success” has become outdated. Clinging to past success strategies no longer works in a changing era. Innovation is the key factor in becoming a hidden champion. It requires stepping beyond conventional business frameworks and boldly pursuing new ideas. 

Over-dependence on big corporations can stifle creativity and boldness. Businesses must take a long-term view and challenge old conventions. British Prime Minister Winston Churchill once said he promoted people he disliked to key positions to create the power of innovation that ultimately defeated Germany. Likewise, learning to view the market from different perspectives is essential.