Small and medium businesses (SMBs) play an important role for the driving force for innovation and employment creation in the national economy. And the Small & Medium Business Administration (SMBA) has been instrumental in making small firms and technology startups a growth engine for the Korean economy. The key to co-development between larger corporations and SMBs will rely on changing the fundamental perception within the industries rather than the laws and regulations. Also, there must be increased awareness and interest by its people and appropriate investments should be made on enhancing government procurement.
The following are excerpts from an interview with Kim Dong-sun, administrator of SMBA.
Q. What are the main goals for SMBA in 2011
A: With an aim to create 'Korea for everyone's development', we will focus on three goals in 2011: First, we are planning to foster global exporters by providing specialized market strategies that are designed for three categories. The categories are the main export market, strategic cooperation market, and the new demand creation market, while encouraging the export of domestic suppliers.
Second, SMBA will nurture technological innovation among small and medium businesses and simultaneously foster industry specialists by the means of R&D programs. SMBA will focus on eight strategic areas which include manufacturing foundation technology, chemical material processing, green IT, next generation lighting, new and renewable energy, and convergence technology.
Our third goal is to boost new technology-based enterprises and create more jobs by promoting entrepreneurship in Korea. We are launching a 'technology entrepreneurship program', which will be based on unused patents, along with running a youth entrepreneurship school and supporting leading entrepreneur colleges. Also, SMBA is planning to organize an entrepreneurship foundation in February of this year, which will help new enterprises take hold in the market.
Q. Tell us about the core ideas and direction of the new Co-development Committee.
A: The key to co-development between larger corporations and SMBs will rely on changing the fundamental perception within the industries rather than the laws and regulations. This is why we have announced the co-development agenda that is based on the voluntary collaboration between the businesses. And in December 2010, we organized the Co-development Committee that is playing a pivotal role on the issues between SMBs and larger corporations.
In addition, the Committee will regularly publish a 'Win-Win Index' based on the performance of major companies; research and recommend the types of business and products suitable for SMBs; and publicize success models of co-development projects on a regular basis.
Q. Exporting has become more difficult due to recent rise of the Korean Won and the current economic recession. What plans has SMBA made to spur exports this year
A: In 2011, we will take collective measures to ensure growth in the export of SMBs. To do so, we are planning to establish a support system to help advance Korean SMBs in an emerging niche market.
One of the main projects for this year is to nurture 100,000 exporters from SMBs and raise the proportion of SMB exporters from 32 percent in 2010 to 35 percent by 2013. And the 'Global Project for Technological Innovation", which is the technology development fund for exporters, will be newly established with a KRW10 billion budget for 2011.
Other efforts of the association will range from sending out market delegates of 2,000 companies to overseas exhibitions and markets in the Middle East, Africa, and EU and so on. These delegates will utilize Korean overseas business networks in 40 countries.
Q. Tell us how SMBA will focus on R&D
A: The R&D budget for SMBs significantly increased in 2011, and it will be mainly invested in the eight strategic areas to foster global specialist businesses. Convergence and green manufacturing technologies, in particular, will be reinforced as core technology development projects with raised budgets in 2011.
Moreover, in order to enhance the infrastructure, we will set up new SMB departments within government-funded research institutes, and as well as open more convergence support centers to assist various R&D projects, especially those led by industry-academy collaboration.
Q. Last year, SMBA made huge contribution by creating jobs with projects such as the one-person business support program. Are there similar plans prepared for this year
A: To create high quality jobs, it is essential to launch more SMBs with technological competence. We are planning to help new enterprises in various fields with market specialization as well as training and education, and promote success models in order to encourage entrepreneurship and, consequently, boost employment.
Also, by legislating the "One-person Enterprise Act", SMBA will provide a systematic platform for those who want to start their own business, and we will collaborate with local governments to increase the number of one-person business support centers from 17 in 2010 to 30 in 2011.
Furthermore, around 15 universities will be selected as leading entrepreneurship institutions, which will receive a 'support package', training programs and financial assistance from the association.
Q. Tell us about the motivation behind launching the Youth Entrepreneurship Foundation
A: Achieving rapid growth during the 70s and 80s, Korea had been recognized as an example of formidable entrepreneurship. With the collapse of venture bubble in 2000, however, came drastic decline of venture businesses among the youth who increasingly became wary of failure.
As a result, Korea's entrepreneurship index fell from 50 in '00 to two in '08, according to the Bank of Korea, and the proportion of young CEOs who are in their 20s or 30s among venture businesses dropped to 10 percent in 2008 from 54 percent in 2000.
Recognizing the gravity of the current situation, small and medium venture businesses put forward KRW3 billion to set up the Korean Youth Entrepreneurship Foundation in December 2010. There will be more financial assistance coming from the private sector and the government is also planning to finance KRW5 billion for the foundation, which will serve as a central place to spread entrepreneurship throughout the country and improve business environment for venture companies. And if the private sector and the government cooperate step by step to bolster youth enterprises; I believe Korea will soon regain its entrepreneur spirit.
Q: It seems likely that it will be another busy year for SMBA. Finally would you like to give any messages to our readers for 2011
A: This year will probably not be so easy for SMBs, with the slow global economic recovery, the financial crisis in Europe, and the overall economic uncertainty. So, if we all join forces, Korea will be able to achieve economic growth as planned, which I believe should benefit the low and middle class, but provided that the government makes due efforts.
SMBA will take a lead in supporting the economy and helping SMBs, and I hope the industries will also cooperate with one another and to prosper together.
