This study identifies industries where small and medium enterprises (SMEs) need to be developed and analyzes these industries' production structures, market compositions and international competitiveness to provide basic insight for the SME promotion policy. As the economy has matured, understanding of SMEs has likewise developed, since future economic development will rely more heavily on the effective use of resources. Economic growth means an increase in production of products, and production of products can increase by either increasing input materials or improving the productivity of production factors. The alignment of industrial structure and industries to natural resources and the allocation of resources should be left to market functions. However, market functions do not always allocate resources in the most optimal manner. There is always a case where the market is unstable.
This study suggests that SMEs with high relating effects within an industry or between industries, and have high international competitiveness, should be selected as priority industries for support and cultivation. First, according to the I-O analysis, the manufacturing industry was divided into 207 sectors. Then, sectors with more than 50% of their added value generated from SMEs were identified, and each sector’s Rasmussen index was calculated to measure relating effects between sectors. In addition, a production growth rate was used as an overall index for international competitiveness. Production growth rate is believed to determine degree of international competitiveness, because the Korean economy is based on the opening system, and the I-O model we use is an import competition model. The types of businesses identified this way are receiving priority benefits compared to other industries, not just because they are SMEs but because it is more cost-effective to invest in them.
Korea's economic policy will continue to focus on rapid growth. Taking into account the poor availability of natural resources, continuous facilitation of export, and more import substitution will be the most important industrial policy tool. Particularly, at a time when trade wars between countries are escalating, export facilitation through internationalization of SMEs is a critical international strategy. From an international perspective, as well as an internal perspective for the sophistication of industrial structure, fostering SME industries capable of increasing export and substituting import is economically justifiable.
산업구조 고도화와 중소기업의 육성(Sophistication of industrial structure and fostering small and medium enterprises)
중소기업 우선육성업종의 선정을 중심으로(Focusing on selection of businesses that need to be fostered with a priority)
|Series Title; No||정책연구시리즈 / 85-01|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < General|
|Holding||KDI; KDI School|