SEOUL, KOREA - Despite a slowdown in exports resulting from the weakening of the yen, Korea’s IT exports have marked their eighth consecutive month of growth. The government statistics in May shows that IT exports have increased by 17.5% year-on-year to 14.1 billion dollar. Apart from flagship products like TV, mobile, and semiconductors, exports have been expanding to include more diverse sectors such as e-government and system integration (SI).
Korean companies have increasingly demonstrated their technological and price competitiveness in the global market. Behind this booming export, there are the hidden efforts of the Korea Trade-Investment Promotion Agency (KOTRA) - a government agency that plays an important part in promoting SMEs’ export behind the scenes.
Overseas IT Support Center
In order to effectively back SMEs and allow them to gain headway into the global market, KOTRA has been working since 1998 to establish IT support centers in the biggest IT markets around the world, including Silicon Valley (51 companies), Beijing (11) and Tokyo (17). The centers are designed to provide the companies with office facilities, market and IT policy information, and a network of local buyers.
Rsupport, a remote support solution company, is one of the many successful exporters to emerge from the IT support center in Tokyo. When the software company started its business in the Japanese market in 2001, it was far from easygoing. Despite the favorable reception of their innovative products from local buyers, they were very cautious about adopting new types of software.
In 2006, Rsupport decided to reside in the Tokyo IT center to harness and utilize the branding of the government agency and its network of local companies. While gaining export expertise from KOTRA specialists in terms of business strategies, hiring personnel, and legal advice, the company aggressively pursued marketing strategies. These efforts eventually paid off. In 2012, Rsupport was able to attract 138.5 billion dollars' worth of investment from NTT DOCOMO, Japan’s largest telecommunications company, and used this to set up a joint R&D center.
“Thanks to the Tokyo IT center, we have been able to save a substantial amount of time and money for our business. On top of its ideal location, the center provides solid ICT infrastructure where we can test software using fast Internet speeds, and joint meeting rooms are offered for free whenever we need to hold buyers meetings. KOTRA has been very active in providing a network of local companies as well as business consultations. We hope to continue to have a win-win partnership with KOTRA,” said Park Ji-hye, a marketing manager from Rsupport.
From May of this year, KOTRA opened its first start-up support center located within the IT support center in Silicon Valley, aiming to foster “born-global” venture companies. They will annually select more than 30 start-ups from competitions and provide them with initial training in Korea. Afterwards, the selected companies will be provided with one-stop services ranging from office space, mentoring services, marketing advice, and foreign investors in the support center.
ICT One-stop Service
“For a number of IT SMEs which possess technological skills, yet do not have the requisite knowledge of how to make inroads into overseas market, KOTRA has set up an ICT one-stop service center that is due to open this June. Currently, support services are scattered throughout many different government agencies, leading to discontent among companies. The center is expected to provide an integration service in collaboration with six relevant agencies,” said Lee Kyoo-nam, Director General of ICT Business Department at KOTRA.
The one-stop service center plans to back SMEs in a stage wise fashion. Start-ups in their initial phase will be provided with ICT market information, and advice on how to make a business plan and catalogue production. Next, the center will help them to create promotional materials for their products and technologies, and also how to obtain intellectual property rights. Once they have established a sales channel, they will support them with information on how to draw up contracts and manage overseas branches.
Building up a network through exhibitions
KOTRA has organized diverse exhibitions and Korean pavilions in a variety of global events in order to offer diverse network opportunities for SMEs. This year, KOTRA has organized the Global Mobile Vision 2013. This event will take place in Seoul from October 30 – 31, with the aim of backing Korea’s mobile SMEs and allowing them to break into the global market.
Over 150 overseas buyers including Nokia and NTT will be invited to gain firsthand experience of new products and services offered by around 50 Korean mobile companies. Technical forums will also be a venue where participants can witness the latest trends and prospects of mobile technologies. Last year, 119 companies from 26 countries attended the Global Mobile Vision 2012 where participating companies amassed 130 million dollars in sales.
Apart from inviting foreign buyers to Korea, KOTRA also backs Korean companies in their attempts to open branches abroad. “KOTRA takes advantage of its 119 overseas networks from 81 countries for overseas exhibitions. For the Korean pavilion of the Mobile World Congress in Spain this February, we harnessed our overseas networks and invited overseas buyers from neighboring countries. On top of this, we are inviting buyers from South American countries to attend K-Tech, due to take place in Mexico next month,” Lee said.
Intelligent Transport System
The director said that Korea’s Intelligent Transport System (ITS) sets the standard for world-class level. However, since the ITS projects are not usually standardized, the government role is very important in order to secure orders. Whenever KOTRA invites foreign government officials to demonstrate Korea’s ITS models such as Hi-pass system, traffic control system, and bus system, they display keen interest because of the state of the technologies as well as the credibility of the government.
Since 2011, KOTRA has played an important role in winning the order responsible for establishing Bogota’s transportation pass system and bus management system project. After first being exposed to the project at the ITS road show in Bogota in 2009, the agency invited the Colombian delegation to Korea and demonstrate Korea’s ITS technologies and system capabilities. Since then, KOTRA has maintained continual efforts by sending delegates to the ITS road show in Columbia, and generating a feasibility study for the project. This led to the eventual securing of the order, worth an estimated 300 million dollars, by the Korean company LG CNS-led consortium.
This month, the Korean government unveiled its blueprint for fostering 3,000 small but strong companies with over 10 million USD in exports by 2017. “With decades of expertise, a variety of professionals in supporting SMEs, as well as a network of 119 overseas networks, KOTRA will continue to be a platform where Korean companies spread their wings in the global market,” Lee confidently stated.
