SEOUL, KOREA - The SME Globalization Support Center of Korea Trade-Investment Promotion Agency (KOTRA) is going all-out in its effort achieve the nation's trade target of $2 trillion as soon as possible, according to Yoon Hyo-choon, the head of the center.
In an interview with Korea IT Times, Yoon said, "KOTRA established the center early this year in order to attain the ambitious target. This goal will be completed primarily through an increase in exports of Korea's small and medium-sized enterprises (SMEs)."
Noting that it is difficult to accomplish the $2 trillion trade goal without SMEs' contribution to exports, he said, "We will exert bold and ambitious efforts to shift domestic sales-oriented SMEs into new exporters, while boosting existing SME exporters to allow for an increase in their overseas shipments.
"In line with this, the center will diagnose the growth stage (export stage) of SMEs through a consulting service and suggest a tailor-made support measure on a case by case basis."
In the past, KOTRA offered uniform support activities to SMEs without classifying them on an individual basis.
2012 marked the second consecutive year that Korea attained an annual trade value of $1 trillion, emerging as the world's eighth largest trading country.
"Breaking down the nation's export structure, however, showed us that the share of large companies contributing to total exports gradually increased, but SMEs accounted for just one-third of the export total," he explained.
"Considering that SMEs account for 99% of all Korean enterprises in number and workers at SMEs account for 88% of all Korean employees, the contribution of SMEs to overall export value is very low," said a senior KOTRA official.
"In this regard, the center will work diligently to actively foster domestic sales-oriented SMEs as new exporters and encourage existing SME exporters to expand their overseas sales," he emphasized.
Movable KOTRA and Global Competence Level (GCL) project
The slogan of "Movable KOTRA" is to move provincial-based SMEs into overseas markets, such as the Mediterranean.
"KOTRA launched the system earlier this year. In a stepwise fashion KOTRA will directly visit provincial-based SMEs, listen to their export-related difficulties, suggest experts' solutions, and secure export driving force," Yoon said, adding that most SMEs in rural areas are domestic sales-oriented companies and lack expertise in terms of globalization.
"The Movable Korea system is gaining in popularity from provincial-based SMEs as trade and overseas experts who retired from large companies are working to suggest proper solutions that allow SMEs to participate in exports," he said.
Those who hope to receive the KOTRA service are required to submit an application for visitation through the homepage or telephone (02-3460-7103, Deputy manager Shin Gyeong-ryeon).
"The center will provide all applicants with proper export-related services, including direct visit to SMEs, regardless of the location of their operation. This is the underlying characteristic of the Movable KOTRA project in order to provide fair opportunities," said the senior official.
At present, the center operates three Hyundai Starex cars that have 10-seats. In the first half of this year, over 800 provincial-based SMEs received services from the KOTRA center and expressed a high degree of satisfaction with the project. Since then, some of the companies have successfully advanced into overseas markets.
Meanwhile, the center gauges the potential global ability of provincial-based SMEs through 45 questions in various fields. These questions include such topics as preparation and use and deepening. After asking the questions, the center suggests a viable strategy based on a nine-stage process, finally recommending a necessary export support project to them.
The recommendation project is among the 167 projects now being implemented by four institutions, the Small and Medium Business Administration, KOTRA, Small and Medium Business Corporation, and KITA.
The Global Competence Level (GCL) project was launched at the end of last year and some 1,200 SMEs have used the system since its establishment. The level test based on national infrastructure is expected to continue to expand as all companies receiving export assistance from the Small and Medium Business Corporation are to receive an appraisal first.
Export Gateway project and branch office service project
The Export Gateway project, implemented by the "export first step team," is another initiative designed by the center to provide 500 domestic sales-oriented SMEs or those with an annual export of less than $500,000 with export-related services free of charge.
"For instance, a mentor handpicked exclusively for a selected SME helps a company with no export experience initiate exports in their business throughout the process in its entirety, ranging from finding an overseas trade partner to overseas shipment and various consultation services," Yoon said.
Meanwhile, the branch office service project enables SMEs to utilize overseas KOTRA trade centers as their offices if they are willing to pay the 2.5~3.5 million won annual participation fee. They can receive such export-related services as finding foreign buyers, local market surveys, and gain key information on local economic situations.
Other services from the SME Globalization Support Center
Asked about other the other available services from the SME Globalization Support Center, Yoon said, "At the request of SMEs, for a fee we are available to actively carry out an overseas market survey. If an SME pays some 150,000 won, for instance, we will actively seek out three or four foreign buyers by region after a two-week investigation at the customer’s behest.
"In addition, we also provide such tailor-made survey services such as production trends of specific goods, supply trends, export & import tendencies, and finding importers of raw and subsidiary materials," he said.
On top of this, he continued, the center is implementing an overseas sales business trip support system for SMEs that will cover finding buyers, hotel reservations, arrangements for required interpreters, as well as transportation in order to increase the efficiency and ease of traveling abroad.
"In a separate project, the center is operating a service consultation corps in 13 cities and provinces across the country. The corps holds a bi-annual conference to collect customers' opinions and implement them in SMEs' business projects," he said.
Accomplishments to Date
Movable KOTRA is still in its infancy as the project is only six months old. The primary goal of Movable KOTRA is to locate SMEs' difficulties in exports and remove such barriers.
"According to a recent telephone survey of 320 SMEs that had received the Movable KOTRA service, 76% of the respondents expressed satisfaction regarding consulting contents and services. Some 86% also replied that they are preparing for initial exports after receiving the consultation service. Thirty-one companies have already signed export contracts or commenced with overseas shipments," Yoon said.
"For example, the G company, a manufacturer of disposable blood-collecting devices, succeeded in exporting $16,000 worth of its products to Saudi Arabia after receiving the consulting service from the KOTRA center," he explained.
Future tasks and room for improvement
Commenting that the center has encountered various problems in SMEs' export business activities while offering consulting service to them, Yoon said, "The main bottlenecks to exports are largely classified into four types, namely technology, funds, manpower and sales routes.
"However, we have realized that it is not possible for KOTRA to solve such problems independently. Accordingly, I hope that a comprehensive export consulting service provided by all export-related institutions will be available for SMEs in the near future," he added.
Since its establishment in 1962 as part of the nation’s first five-year economic development plan, KOTRA has been dedicated to creating new export markets and increasing Korea’s trade value, which surpassed $1 trillion in 2011 and 2012. Based on KOTRA’s continual efforts, this figure should continue to rise in the future.