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Korea's top conglomerates and brands have the global spotlight at the moment... but
in the shadows of the wings... exist the nation's underdeveloped small- and medium-sized enterprises.
Experts now say that their future... will creates Korea's.
Arirang's Hwang Ji-hye looks into the country's next big economic challenge.
Hidden champions... that is what the nation's small yet highly successful companies have
been called.
But the truth is... these companies have long been left out in the cold in Korea... a place
where family-controlled conglomerates have dominated the economy for decades.
Mid-sized businesses... with sales of 150 billion won,... or roughly 140 million U.S.
dollars,... account for just zero-point-0-4 percent... of the more than 3-point-1 million
corporations registered in the country,... according to KOTRA, the state-run trade promotion
agency.
This is significantly low... compared to other nations around the world.
The ratio stands at around 12 percent in Germany, over 4 percent in China... and 3-point-7 percent
for Japan.
While an expert says... that mid-sized companies are what keep an economy stable in times of
global economic uncertainty... and create jobs -- even more than the conglomerates -- the
ground under them is not yet fertile enough to promote growth.
"Small businesses, with up to around 7-and-a-half million dollars in owned capital, are entitled
to various financial and tax benefits from the government, but once they grow larger,
all of the benefits are immediately cut off. At the same time, they're growth is bothered
by large companies... that are trying to pick them out of the race."
Given that,... the situation now is likely to be turned in favor of mid-sized businesses
by the incoming administration of President-elect Park Geun-hye.
She has promised to provide customized support to small companies... to help them to grow
into mid-sized firms.
A center solely for mid-sized enterprises... under the Ministry of Knowledge Economy that
was established last November... is expected to back up her plans.
"Mid-sized companies didn't have a place to talk about their difficulties. Now that the
High Potential Enterprise Promotion Center has been established, we are planning to provide
a better business environment for mid-sized businesses."
Experts add... that Park's transition team should also push through measures that introduce
stricter punishments for conglomerates... that engage in unfair practices... to level
the playing field for small- and mid-sized enterprises.
Hwang Ji-hye, Arirang News.