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SME Policies of Korea

Mar. 10, 2009. SME Policies of Korea. Yoosook Kim Small and Medium Business Administration (SMBA). 1. 1. SMEs in Korea and Policies. SME Cooperation with EU. Contents. About SMBA. 2. Ⅰ. About SMBA. External administration under Ministry of Knowledge Economy

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SME Policies of Korea

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  1. Mar. 10, 2009 SME Policies of Korea Yoosook Kim Small and Medium Business Administration (SMBA)

  2. 1 1 SMEs in Korea and Policies SME Cooperation with EU Contents About SMBA

  3. 2 Ⅰ About SMBA

  4. External administration under Ministry of Knowledge Economy Headquarter (in Daejeon) and 11 regional offices SMBA(since 1996~)

  5. Organization (2009)

  6. Related Organizations Small Business Corporation (SBC) Korea Small Business Research Institute (KOSBI) Technology Information Promotion Agency for SMEs (TIPA) Credit Guarantee Fund Technology Credit Guarantee Fund Korea Venture Investment Small Business Distribution Center Market Management Support Center Micro-enterprise Promotion Agency Korea Business Incubator Association Korea Federation of Small and Medium Business (K-biz) Korea Venture Industry Association Korean Women Entrepreneurs Association Cooperation Foundation for Large and Small Business Korea Management Consulting Association (and more)

  7. 19 SMEs in Korea and Policies

  8. SMEs of Korea (2008) SMEs 87.5% (10.88 M) 99.9% (3.02 M) 49.4% ($447B) Enterprise Employment Production Backbone of national economy Vital majority Source of job creation new 1,167,000 440,000 jobs created (annually) liquidated 62,188 767,000 53,483 52,739 52,587 5,277 SME 3,214 2,200 221,000 101,000 1,507 LE ‘01 ‘03 ‘07 ‘98 ‘07 ‘05

  9. Scope of SMEs (2009) Sector of SMEsCriteria Manufacturing Less than 300 workers Capital worth $8M or less Mining, construction, transportation Less than 300 workers Capital worth $3M or less Printing, Video, Broadcasting, etc Less than 300 workers Health and Social welfare Sales worth $30M or less Wholesales and retails Less than 200 workers Finance and insurance Sales worth $20M or less Waste disposal, environment recovery Less than 100 workers Education service Sales worth $10M or less Real estate and Rental service Less than 50 workers Sales worth $5M or less 

  10. small medium micro(81.9%) Composition of SMEs (2006) Medium(3.1%) Small(8.3%) Micro(88.5%) Etc. Manufacture (11.2%) Service (85.7%)

  11. Brief History of SMEs of Korea SMEs foundation • Govt’s policy: export first (w/LE and heavy chemicals) • Supplementary position for LE • SMEs’ increase in facility investment and productivity 1970s SMEs mainstreaming • Govt’s policy: balanced growth • Division of work expanded to light industries • SMEs’ export: 27%(1985) → 45%(1990) 1980s

  12. Brief History of SMEs of Korea SMEs take-off into high-tech sectors • Decrease in growth, profitability, asset and sales • Lost price competitiveness in world market • Gaps w/LE widened 1990s Asian financial crisis in 1997 Av. 80,000 manufacturing SMEs closed Av. 1.8M SME employees lost jobs • Venture business start-ups 2000(1998) → 8,000 (2000) • SME export : 31%(1998) → 43%(2001) • Annual export growth rate of 30%

  13. No. of innovative enterprises 32,767 Sales $100M Ventures: 152 (’07) SME export recorded $100B in ‘06 ’04 ’05 ’07 Jan.’09 Brief History of SMEs of Korea Innovative SMEs • Technological power of high added value • Higher R&D investment (3.4) • Higher employment (2.6) and sales growth rates (3.2) 2000s

  14. Changes in SME policy Inputs putting Driving innovation Protecting Competition & cooperation Direct assistance Creating ecosystem Customers driving Suppliersdriving (Before) (Now) 2009 Policy efficiency Balanced growth Capacity of tech. innovation & creativity “Strong SMEs with self-viability & global competitiveness!”

  15. Current SME Policies (Area)Start-ups & Entrepreneurship Access to finance Human resources Market access (domestic and overseas) Technology innovation Informatization Policy information (Biz-info) (Special target) Venture & Innovative Women-owned & Disabled-owned Micro- & Self-employed Traditional market

  16. Public Purchasing Public purchaing market Participating Institutions 200 150 100 100 (Unit:$B) (Unit: No) 163 63 58 57 156 SME products 122 120 3.0 1.4 1.3 0.6 Tech products `05 `06 `07 `12 `05 `06 `07 `08 Tech Product Purchase Increasing purchase requirement annually 10.0% 7.1% 6.9% `06 `07 `10

  17. SME Cooperation with EU

  18. On-going programs 1. Expert exchange for SME cooperation * CDTI(Centre for Industrial Technology Development)   * PROMOS : Milano chamber of commerce's international service center   * CEIPIEMONTE : Piemonte's international trade center   * Innovation Norway

  19. On-going programs 2. Joint R&D for SMEs(SMBA) - 23 projects with 8 countries in 2008 * More budget in 2009, but less application with EU ! Domestic Institute Oversea Institute Joint R&D Technology Technology SMEs

  20. 4. Cooperation in tech. transfersince 2008 (SMBA) 5. Participation in EUREKA programsince 2005(MKE) - 18 consulting projects with Steinbeis Foundation - 15 projects in 2008 (5 new, 10 continuing) 3. Recruiting EU experts since 2001(SMBA) - EU experts account for 0.9% (13 out of 1,448) On-going programs

  21. Facts found from web survey < Web Survey > - Sample: 402 * valid reply out of 12,000 SMEs registered in the site * 249 SMEs(61.9%) experienced cooperation with EU in recent 3 yrs.- Period: 2008.10.20~10.28- Purpose: Preparation for FTA and cooperation with EU 1. Major partners: Big 4s*(46.3%) and other various countries * Germany(15.8%), UK(12.3%), France(9.4%), Italy(8.8%) Spain(7.7%), Netherlands(7.2%)………E. Europe(9.5%)

  22. Marketing Investment R&D Import Export Facts found from web survey 2. Current activities 3. Expectation on FTA with EU - Export competitiveness ↑(42.9%) - Cooperation in technology development and investment↑(14.5%) - Non-tariff barriers*↓(13.7%) * Strict environmental regulations ( RoHS, CE Mark, REACH, etc.) Marketing (Future) Investment R&D

  23. Facts found from web survey <Regarding future investment to EU> Light industries (%) Heavy chemicals (%) Germany (18.6) E. Europe (23.3) UK (18.6) Germany (20.5) France (16.3) UK (13.7) Italy (11.6) France (12.3) E. Europe (9.3) Italy (4.1)

  24. Possible measures for cooperation SME business matching between Korea and EU ( tailored by individual company, sectorial group, region, etc.) 2. Participation in SME exhibitions and fairs 3. SME cooperation in low carbon and green growth 4. Joint consulting on laws and practices for doing business in Korea and in the EU 5. SME CEO forum 6. Etc.

  25. 2010 ASEM Green Growth and SMEs Forum in Seoul • Adopted at the 7th ASEM Summit meeting • Co-sponsored by Denmark, Spain and Sweden

  26. Thank you! Yoosook Kim Director of International Affairs Division, SMBA redrose@smba.go.kr

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