Small Business Corporation(SBC)
June 3, 2002
Yoo Jae Kwon
Small Business Corporation
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Prioritizing Small Business
Small Business Corporation
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Contents
Status of Korean SMEs
Overview of SBC
Major Programs of SBC
- Financial programs
- Non-financial programs
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Definition of Korean SME
Small & Medium Industries
Industry
Employees Paid-in Capital
Manufacturing Below 300 8 billion won or less
Transportation
Mining, Below 300 3 billion won or less
Construction
Farm, Forestry Below 50 3 billion won or less
30 billion won or less
Retail Complex Below 300
(turnover)
Others Varied Varied(turnover)
Source:The Framework Act on SMEs
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Economic Importance of SMEs
No. of companies No. of employees
(Unit : 1,000 Firms) (Unit : 1,000 persons)
All: 2,778 All: 10,830
SMEs: 2,769(99.7%) SMEs: 8,866(81.9%)
Source: The National Statistics Office, Survey Report on Basic statistics of
Businesses in Korea (1999)
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Export Performance of SMEs
(Unit: 1 mil USD, %)
Year 2001 Year 2000
Jan.~May Ratio Jan.~Dec. Ratio
Total 65,760 100 172,267 100
SMEs 26,673 40 63,509 37
Large
firms
39,046 60 108,627 63
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SMEs in the Manufacturing Sector(1999)
91,156
991,156 2,508
90,449(99.2%) 11,830(73.0%)
436,121 182,668
207,174(47.5%) 88,280(48.3%)
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SBC Overview
Characteristic
• Non-profit government agency
Function
• To effectively implement government policies and
programs for sound growth and development of SMIs
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SBC Overview
The Birth of SBC (1978∼1979)
70’s Economic Situation
- Increased imbalance between large and small & medium industries
- Problem of reduced efficiency and weakened national competitiveness
- No government policy for SMI promotion
Need for SBC
- To achieve sustained growth and development, improvement in
industrial structure needed.
- National consensus on promoting economic growth in the Small &
Medium industrial sector
SBC Established
- Legislation and promulgation of SMIs promotion law (Dec 1978)
- A general support center for SMIs established (Jan 1979) 9
SBC Overview
Building SBC (1979∼1988)
Early Tasks of SBC
- Financial assistance for modernization and cooperative projects
: Production facilities of SMIs
- Extension service and training programs
: Technical and management capability
- Information Service : Technical and management information
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SBC Overview
Building SBC (1979∼1988)
Expansion of SBC Activities
- Production facilities lease(81)
- Promising SMIs(83)
- Globalization(83)
- Business Start-up(84)
- Rural industry development(84)
- Business Conversion(88) : Sunset→ Sunshine
Organizational Growth
- Opening SBC Training Center(82)
- Take-Over :
Korea Rural Ind. Development Center(80)
Korea Production Technology Corp.(82)
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SBC Overview
SBC as a Support Center for SMI Growth (1989 ∼)
Industrial restructuring to strengthen competitiveness (89∼94)
- Promotion of industrial restructuring, R&D, computerization
Decentralization of Industry : Localization
- Transferring loan programs to regional government
- Transferring major assistance programs to regional offices
New Economic 5 Year Plan to revitalize the stagnant economy
- Launched Industrial Restructuring Program(93)
- Diversified SBC fund raising : Bonds and Lotteries
Information Technology & Automation Challenges
- SMI Information Bank opened(93)
- Center for Advanced Manufacturing Technology(CAMTECH)
opened(96)
- Information Technology and Internet Services for SMIs(96) 12
SBC Overview
Jan. 1979 SBC established
Oct. 1982 Small Business Training Institute(SBTI)
Jul. 1995 Small & Medium Industry Certification Center
Dec. 1995 Small & Medium Industry Distribution Center
Apr. 1996 Center for Advanced Manufacturing Technology
(CAMTECH)
Dec. 1999 Small & Medium Industry Department Store
‘ HAPPY WORLD’
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SBC Overview
SBC Fund and Budget
• FY2001 Budget : US$ 3.6 billion
Government Contribution - US$ 0.4 billion
- Endowment Fund
- Government Loan
Other Revenue - US$ 3.2 billion
- Bond Issuing
- Repayment, Interest, and other income
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Organization
Office of President
Office of Audit
Office of PR
Seoul Regional H.Q
Planning & Coordination
Pusan Regional H.Q
General Affairs
Vice Fund Management Taegue Regional H.Q
President Emergency Planning
Inchon Regional Office
Regional Headquarters
Kwangju Regional H.Q
Business Assistance
Taejeon Regional H.Q
Vice Cooperative Program
President Kyunggi Regional H.Q
Preside Venture & Start-up
N-S Industrial Coop. Choongbuk Regional H.Q
nt Export Promotion
Chonbuk Regional H.Q
I T Promotion
International Cooperation Kyungnam Regional H.Q
Vice
President Research & Publication Kwangwon Regional H.Q
18 Departments EDS
Cheju Regional H.Q
Overseas Offices
15 Regional offices Woolsan Regional Office
Vice Extension Service
4 Overseas offices President Consultants Group
Uijongbu Regional Office
Kangrung Regional Office
Automation Technology
696 Employees Vice Mobile Assistance
Frankfurt
Tokyo
President Training Service Chicago
15
Beijing
Faculty
Major Programs
< Financial Programs
• SMI Restructuring and Business Stability Loan Program
• Cooperative Program
Venture Business Start-up Program
Rural Industry Development Program
< Non-financial Programs
• Industrial Park Development
• Information Service
• Marketing Assistance Program
• IT Development
• Extension Service
• Training Service
• International Cooperation Program
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Financial
Programs
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Financial
Program
SMI Restructuring & Business Stability Loan Program
- Purpose: Enhance productivity, business restructuring,
stabilization
- Eligible Applicants :
· SMEs with good prospects but lacking collateral
· Knowledge based or fnformation tech. industry
· Export firms, import substitutes manufacturers
· Venture & businesses owned by women
· Year 2000 : used $US723 million for 4,427 firms
Cooperative Program
- Purpose : Manufacturers in the same and complementary business
lines jointly develop a cooperative industrial park and relocate into it
to take advantage of the Economy of Scale
• Year 2000: used $US 153 million for 109 projects
• Since 1979, US$ 1.2billion lent to 406 projects(3,646 cos) 18
Financial
Program
Venture Business Start-up Program
- Financing for New Venture Firms, Soon-to-be Entrepreneurs
Business start-up loans : US$ 176 million in the year 2000
Investment, loan & subsidy to 147 venture capitals, 274
investor cooperatives, 117 business start-up consulting firms
Korea Venture Fund :
- Total fund raised - US$ 25 million
- US$ 20million invested in 52 companies
- Business Incubation Center
9 SBC Incubators (191 Cos.)
230 College & local government incubation
centers
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Financial
Program
Rural Industry Development Program
- Purpose : To increase SMEs’ presence into rural
area for balanced development of the nation
- Support: 4,079 companies in 295 rural
industrial parks
- Financial Support in 2000 : US$ 52 million
for 213 firms
Industry Lottery
- Scratch -type
- Market share : #1 among 7 lottos in Korea
- Revenue in 2000 : US$ 3 million
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Non-financial
Programs
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Non-financial Program
Industrial Park Development Program
- Industrial parks for SMIs : 5 parks (262 Cos.)
- Apartment-type factories : 22 (1,174 Cos.)
Information Service
-On-Line : www.smdb.or.kr
Business information, DB of prospective SMEs,
Q & A Service
- Monthly publications : Kiopnara / Tech Times
- Research and policy studies
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Non-financial Program
Marketing Assistance Program
- Export Promotion
· Consulting services by 100 export professionals
· Best of Korea Product: Market research and professional
marketing
services in the US, EU market
· Export incubators in Chicago, Frankfurt, Tokyo
· Purchase meetings with foreign buyers
· Export promotion missions abroad
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Non-financial Program
Marketing Assistance Program
Matchmaking services between suppliers and
demanders
Internet shopping mall ‘JOYLET’ (www.joylet.co.kr)
Small & Medium Industry Department Store
“ HAPPY WORLD ”
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Non-financial Program
IT Promotion Program
Homepage & Electric Catalogue Service (www.koreasme.com)
: 17,000 firms & 100,000 products’ catalogues(6
million hits/month)
- Linked to &
- Export process (from buyer search to shipment) can be executed on line
Digital SME (www.smdb.or.kr)
- DB of 45,000 SMEs & professional information on e-
Business
Electronic Commerce Resource Center :
- e-Commerce training, consulting
Re-engineering Center :
- Product design, S/W development training & consulting
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Non-financial Program
Extension Service Program
- Management / Technical consulting : 36,000 Cos. by 2000
- Trouble shooting / quick fix on bottleneck problems
- Registered consultants : SBC in-house(106)
Outsourcing (9,500), Foreign (2,000)
Photo : Center for Advanced Manufacturing Technology
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Non-financial Program
Training Program
Small Business Training Institute (SBTI)
- Management & technical courses for top executives ,
managers, and plant workers
- 35,000 persons annually attend courses
- 2-year community college Level technology course 27
International
International Cooperation
Cooperation Program
Program 28
International Cooperation
Program
To promote International Industrial
Cooperation in the areas of JV, Technical
Licensing, Trade and Strategic Alliance
Inbound Investment,
Technology Outbound Investment,
Inducement Technology Transfer
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International Network
• Overseas branch offices
: Chicago, Frankfurt, Tokyo, Beijing
• Overseas counterpart organization
: 131 counterparts in 37 countries
• Industrial Coordinator Exchange Program 30
International Cooperation
Program
Industrial Coordinator Exchange Program
• What is the Industrial Coordinator ?
• What are their Duties ?
• Results of Industrial Coordinator Exchange Program
- France (19 84-95) : 116 projects
- Germany (1984-92) : 149 projects
- Japan (1991-98) : 174 projects
- Italy (1997-present) : 46 projects
- China, Russia, Bahrain etc.
• Coordinators from France, Spain, Italy are currently working
in SBC
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Support Services
Investment Seminars Consulting on
Laws &
Regulations
Interpretation
SBC Identifying
Partners /
Match-Making
Overseas Consulting on
Missions Contract Negotiation
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Performance
Year 2000 Cases
Contract 42
Partner-matching 485
Consultation 1,638
Delegate Mission 8
*Coordinator exchange 17
** Seminar 8
* Coordinators from France, Spain, Italy, ASEAN countries
** Seminar : Hungary, Belgium, China, Germany, Philippines, Indonesia
etc.
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Small Business Corporation