Fostering SMEs via Developing the
Globally Competitive Human Capital
-The Experience of Korea
Ms. Christy Lee
President & CEO
Daewon Advisory Services
Contents
Contents
Why Korea?
How Korea Made it?
- Developing Globally Competitive Human Capital
Fostering SMEs via Effective Training
Key Lessons Learned & Implications to KSA
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
Why Korea?
Industrial Base was Totally Destroyed During the War
1. Why Korea?
2. How Korea Made it?
3. Korean SMEs
4. Key Lessons Learned &
Implications to KSA
Seoul during the Korean 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
Why Korea?
Over 500 times GDP growth, 300 times trade volume growth
GDP Growth (Nominal)
(KRW BN, 1USD=1100KRW)
Trade Volume
(USD MN)
USD 1,007BN
(2010)
USD 2BN
(1970)
USD 900BN
(2010)
USD 3BN
(1970)
Peter Drucker, 『 Post-Capitalist Society 』
‘Korea provides us a key example of an undeveloped nation
without natural resources jumped into an industrial society, that
we cannot discuss the history of 20th century economic
development excluding Korea’s amazing economic development.’
(Source: www.investkorea.org)
Small but Strong Economy
Korea’s World-Class Products (2011)
Shipbuilding
Memory
Chip
Lithium
Battery
Auto
Steel
World
Rank
1
1
1
5
6
Market
Share
48%
55%
40%
6%
5%
Korean
Companies
Hyundai
Heavy Ind.,
DSME
Samsung,
Hynix
Samsung SDI,
Hyundai,
KIA
POSCO,
Hyundai
Steel
LG Chem
How Korea Made it?
H.E. Late President Park, Chung-Hee (1917 – 1979 )
• Emphasis on patriotism and
self-sacrifice
• Determined leadership by
suggesting clear visions
• “My life for my country and for
the people”
• Thrift
1. Why Korea?
2. How Korea Made it?
3. Fostering SMEs
4. Key Lessons Learned &
Implications to KSA
President of Korea 1963-1979 (16 yrs)
How Korea Made It?
Instilling Pride & Honor
• Promotion of Science & Technology –
KIST, KAIST, Daeduck Science Park
• Promoting Engineers and Skilled Technicians
• Excelled in the Int’l Youth Skill Olympics
- Korea Wins Gold Medal 17 times
(1977-2011)
How Korea Made It?
Close Partnership: Government & Private Sector
Monthly Export Promotion Meeting Presided
by the H.E. Late President Park, Chung-Hee
SAMSUNG GROUP Founder & Chairman: Lee, Byung Chul ( 1910 - 1987 )
“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.”
Samsung Group’s Opening of
Shared IT system: 1974
Korean Education
President Obama’s View on Korean Education
“In the space of a little more than a
generation,
[South]
Korea
has
developed one of the world’s besteducated workforces and fastestgrowing economies.”
"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."
Overview of Korean SME Organizations
Guarantee agencies
Provision of
guarantee
Management
consulting
Affiliated government organization
• Execution of SME
policies
• Financial support
• Consulting &
Training
• Financial support
for Micro Enterprise
• Start up fund
• Start up consulting
• Training for Micro
Enterprises
Financial Institution
• Financial
support
• Management
consulting
Small and Medium Enterprises
• Investment of
Venture capital
• Education
Status of Korean SMEs
“99-88” SMEs
1. Why Korea?
100%
32.3
2. How Korea Made it?
60%
3. Fostering SMEs
47.6
80%
99.9
87.7
40%
67.7
52.4
4. Key Lessons Learned &
Implications to KSA
20%
12.3
0%
0.1
Total Number
Total Number
of Companies
of Employees
The Amount of The Amount of
Production
Large Enterprises
SMEs
Exports
New Government’s Policy Goals for SME
New Government’s Policy Goals for SME support
• Shared growth between
Conglomerates and SMEs
• R&D Support for SME
• Procurement
• Fair opportunities for market entry
SEDA’s Training Programs for Micro – Enterprises
Start-Up Academy
Practical training for new
start-ups & for youth
entrepreneurs
Management Improvement
Training
Training on management improvement
to foster ability to cope with sudden
changes.
E-Learning Training
Online courses on start-up,
management, & case studies
of successful businesses
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
overseas
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 Support for Micro- Enterprises
Training
Training Programs
‘05
‘07
‘09
‘11
Innovation Training
246
1,005
11,841
101,596
-
23,414
112,094
104,126
E-learning Training
-
-
75,059
338,088
Total
246
24,419
198,994
543,810
Management Improvement
Training
Supports
Category
'05
'07
'09
'11
Budget(100 million KRW)
5.3
16.5
65
50
Consulting
1,102
2,634
8,764
7,645
Legal Aid
26
104
346
314
Number of
Results
Category
Ratio of enterprises with increased
revenues
Revenue increase rate
Satisfaction Level
‘07
‘09
‘11
43.0%
60.0%
58.2%
-
-
3.8%
76.3%
84.5%
83.5%
SBC Support for Youth Entrepreneurs
Youth Entrepreneurship Training Program
One-stop training center to nurture young CEOs by providing all the
resources 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)
Key Lessons from Korea and Implications for KSA
√ 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!
Learning Journey to Korea: Incubating & Fostering SMEs
Visit to Leading SMEs with Innovative Technologies in Korea
Thank You
Mr. Rashid Al Nuaimi,
Vice President, Human Capability, GASCO