This study analyzes the long-term changes that have led to the current structure of small and medium businesses (SMBs) in Korea, predicting how the environment for SMB management will evolve in the future. The importance of SMBs in the Korean industrial structure has been growing consistently since the 1970s. The number of SMBs, as well as the number of people they hired and the amounts of added values they generated, multiplied rapidly during the 1980s, with SMBs occupying a greater share of the overall manufacturing sector than large corporations. SMBs enjoyed unprecedented growth and expansion during this period because large corporations began to cut back on the number of people they hired, while the weight of production grew in SMBs.
During the 1970s, promoting industrialization by fostering heavy and chemical industries, the Korean government used its SMB policy to supplement the heavy and chemical industries, and also as a bulwark against the concentration of wealth in a few large conglomerates. The economic crisis of the early 1980s, however, caused the government to rethink its policy of heavily favoring large corporations and adopt new policy measures to foster SMBs instead, including financial assistance for prospective SMBs, entrepreneurism and technological development as well as management training and technology courses at the SMB Administration. In other words, the focus of Korea’s SMB policy shifted from protection in the 1970s to fostering in the 1980s, and again to restructuring in the 1990s.
The new SMB policy of the 1990s was based on the New Five-Year Economic Development Plan. The new plan sought to improve the technological capability of SMBs and prepare for the dawning age of local self-administration. This involved providing greater support for the automation and informatization of SMBs against the backdrop of the rising wage level; supporting the technological innovation of SMBs; fostering local SMBs and decentralizing the local SMB policy from the central government to the local governments; and fostering a greater partnership between large corporations and SMBs.
The government policy on SMBs should increase the amount of knowledge and management resources that these businesses possess, encouraging knowledge-intensification and improving the access of SMB owners and executives to knowledge and management resources. This involves creating technology transfer centers; expanding the technology market and the local industrial-academic collaboration consortia; revitalizing industry technology associations and societies; developing local technology innovation councils; increasing the pool of skilled and expert labor; and developing demand-oriented human resources. Moreover, the government should also help SMBs improve their financial structure and better combat financial shortages.
중소기업의 구조조정과 지식집약화(Restructuring and knowledge-intensification of small and medium businesses)
|Series Title; No||연구보고서 / 96-08|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < Entrepreneurship|
|Holding||KDI; KDI School|