Fostering SMEs via Developing the Globally Competitive Human Capital -The Experience of Korea

Ms. Christy LeePresident & CEODaewon Advisory Services

Contents

How Korea Made it? - Developing Globally Competitive Human Capital

Fostering SMEs via Effective Training

Key Lessons Learned & Implications to KSA

Why Korea?

Co

nte

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Fostering SMEs via Developing the Globally Competitive Human Capital

Ms. Christy Lee

Why, on earth, KOREA?

Aerial view of Seoul in 1950’s

Aerial view of Seoul Today

2. How Korea Made it?

3. Korean SMEs

4. Key Lessons Learned &

Implications to KSA

1. Why Korea?

Why Korea?

Industrial Base was Totally Destroyed During the War

- Korean War (1950 - 1953)• Average annual growth rate during the war : -19%• Amount of damage : US$ 5.5 billion• Total Civilian Casualties: 2.5 Million

Seoul during the Korean War

Over 500 times GDP growth, 300 times trade volume growth

(KRW BN, 1USD=1100KRW)

GDP Growth (Nominal)

USD 2BN(1970)

USD 1,007BN(2010)

(USD MN)

Trade Volume

(Source: www.investkorea.org)

Peter Drucker, 『 Post-Capitalist Society 』

‘Korea provides us a key example of an undeveloped na-

tion without natural resources jumped into an industrial so-

ciety, that we cannot discuss the history of 20th century

economic development excluding Korea’s amazing eco-

nomic development.’

USD 3BN(1970)

USD 900BN(2010)

Copyright Daewon Advisory Services, 2013ⓒ

Why Korea?

Small but Strong Economy

Copyright Daewon Advisory Services, 2013ⓒ

 

Ship-building

MemoryChip

LithiumBattery Auto Steel

WorldRank 1 1 1 5 6

MarketShare 48% 55% 40% 6% 5%

Korean Compa-

nies

Hyundai Heavy Ind.,

DSME

Samsung,Hynix

Samsung SDI,

LG Chem

Hyundai,KIA

POSCO,Hyundai

Steel

Korea’s World-Class Products (2011)

• Emphasis on patriotism and self-sacrifice• Determined leadership by sug-

gesting clear visions • “My life for my country and for

the people”• Thrift

How Korea Made it?

H.E. Late President Park, Chung-Hee (1917 – 1979 )

2. How Korea Made it?

3. Fostering SMEs

4. Key Lessons Learned &

Implications to KSA

1. Why Korea?

President of Korea 1963-1979 (16 yrs)

How Korea Made It?

Instilling Pride & Honor

• Excelled in the Int’l Youth Skill Olympics - Korea Wins Gold Medal 17 times

(1977-2011)

• Promoting Engineers and Skilled Technicians

• Promotion of Science & Technology – KIST, KAIST, Daeduck Science Park

How Korea Made It?

Monthly Export Promotion Meeting Presided by the H.E. Late President Park, Chung-Hee

Close Partnership: Government & Private Sector

SAMSUNG GROUP Founder & Chairman: Lee, Byung Chul ( 1910 - 1987 )

Samsung Group’s Opening of Shared IT system: 1974

“Samsung has clear standards when

deciding a new business ;

national needs,

sympathy of Korean people and

potential for global competitiveness.

Considering this, we will develop a

semiconductor business.”

Korean Education

President Obama’s View on Korean Education

"In South Korea, teachers are known as nation builders. I think it's time we treated our teachers with the same level of respect right here in the United States of America."

“In the space of a little more than a generation, [South] Korea has devel-oped one of the world’s best-educated workforces and fastest-growing economies.”

Small and Medium Enterprises

Affiliated government organi-zation

Guarantee agencies

Financial Institution

• Execution of SME policies

• Financial sup-port

• Consulting & Training

• Financial support

• Manage-ment con-sulting

Provision of guaranteeManage-

ment con-sulting

Overview of Korean SME Organizations

• Investment of Venture capi-tal

• Education

• Financial sup-port for Micro Enterprise

• Start up fund• Start up consult-ing

• Training for Mi-cro Enterprises

Status of Korean SMEs

 

Copyright Daewon Advisory Services, 2013ⓒ

Total Number of Companies

Total Number of Employees

The Amount of Production

The Amount of Exports

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0.1

12.3

52.4

67.7

99.987.7

47.6

32.3

Large Enterprises SMEs

“99-88” SMEs

2. How Korea Made it?

3. Fostering SMEs

4. Key Lessons Learned &

Implications to KSA

1. Why Korea?

New Government’s Policy Goals for SME

New Government’s Policy Goals for SME support

• Shared growth between Conglom-erates and SMEs

• R&D Support for SME

• Procurement

• Fair opportunities for market entry

Start-Up Academy

Practical training for new start-ups & for youth en-trepreneurs

E-Learning Training

Online courses on start-up, management, & case studies of successful businesses

Management Improvement Training

Training on management improvement to foster ability to cope with sudden changes.

SEDA’s Training Programs for Micro – Enterprises

• Innovation Academy ($7Mil support for 24,000 in 2013)

• Practical training for start-ups

• Training for those who want to switch the business to another business area

• Youth Entrepreneurs start-up in over-seas

SEDA’s Training Programs for Micro – Enterprises

Management Improvement Training ($7.8Mil for 53,000 in 2013)

• Sector Specific Training: 1,555

• Region Specific Training: 300

• Micro-Enterprise Innovation Academy: 500

SEDA’s Training Programs for Micro – Enterprises

Training Programs ‘05 ‘07 ‘09 ‘11

Innovation Training 246 1,005 11,841 101,596

Management Improvement Training

- 23,414 112,094 104,126

E-learning Training - - 75,059 338,088

Total 246 24,419 198,994 543,810

Category '05 '07 '09 '11

Budget(100 million KRW) 5.3 16.5 65 50

Number ofConsulting 1,102 2,634 8,764 7,645

Legal Aid 26 104 346 314

Category ‘07 ‘09 ‘11

Ratio of enterprises with increased revenues

43.0% 60.0% 58.2%

Revenue increase rate - - 3.8%

Satisfaction Level 76.3% 84.5% 83.5%

SEDA Support for Micro- Enterprises

Training

Supports

Results

SBC Support for Youth Entrepreneurs

One-stop training center to nurture young CEOs by providing all the re-sources needed for starting a business: (300 CEOs per year)

• Start-up training

• R&D support

• Prototype production

• Start-up loans after training period

• 2013 Budget: $23 million (Support up to: $100K/person)

Youth Entrepreneurship Training Program

√ Clear and Shared Vision: Communicate with your people

√ A Dedicated Government Agency was effective

√ Close Partnership between Government & Private Sector

√ Ensure strong execution of policies: Speed matters!

√ Foster a spirit of competition and enhance efficiency

√ Educate, Educate, Educate!

Key Lessons from Korea and Implications for KSA

Learning Journey to Korea: Incubating & Fostering SMEs

 

Visit to Leading SMEs with Innovative Technologies in Korea

Mr. Rashid Al Nuaimi,Vice President, Human Capability, GASCO

Thank You