Dir.-Gen. Sung Yoon-mo of the Business Marketing 

Bureau at the Small and 

Medium Business Administration (SMBA)   

(photo: NewsWorld)

With customer demand diversifying and changing rapidly, marketing capabilities have become more important than ever in both international and domestic markets. The Small and Medium Business Administration (SMBA) redoubles efforts to give a helping hand to SMEs in terms of supporting marketing, finance, HR(Human Resource), and export. The following are excerpts of an interview between NewsWorld and Sung Yoon-mo, director general of the Business Marketing Bureau at the SMBA in which he spoke of his bureau’s mission and the directions of various measures to promote SMEs. 

Question:  Will you explain the duties of the Business Marketing Bureau?

Answer:  Our bureau is charged with supporting marketing, finance, HR(Human Resource), and export, the essential management functions of SMEs.

Marketing Public procurement system for SMEs’ products, marketing support, and a project to extend a helping hand to female business owners have been put into practice to help SMEs expand and diversify marketing access to the private and public sectors. The SMBA plans to funnel a combined 31.4 billion won into facilitating SMEs’ marketing efforts during 2014 — 20.8 billion won for marketing support, 4.6 billion won for a public procurement system for SMEs’ products, and 6 billion won for supporting female business owners.

Finance — Public financial supports have been extended to provide financial support to SMEs without credit history and collateral through credit guarantee. The administration plans to supply a combined 4.127 trillion won in financial support during this year — the government loans 3.8 trillion won, 150 billion won in contributions to credit guarantee institutions, 102.2 billion won in accounts receivable insurance contributions, and 54.98 billion won in re-guaranteeing regional credit insurance. 

Human Resource — We provide support to foster and supply excellent labor force and build infrastructure for a continuous flow of talented employees into SMEs to ease their HR mismatch. The SMBA plans to finance 91.6 billion won in HR support programs during this year — 32.8 billion won for industry-academia collaboration projects to foster technicians and skilled manpower, 10.4 billion won to establish infrastructure for manpower inflow into SMEs, 1.2 billion won to SMEs that are fostering manpower, 15 billion won for fostering national meister high schools, and 29.2 billion won for training support programs. 

Export — The SMBA operates exporting tailored SME export support systems according to respective SMEs’ capabilities and growth stages as well as support reinforcement of SME capabilities responding to rapidly changing international environments caused by the effectuation of free trade agreements. A combined 86.4 billion won will be poured into assisting SMEs’ export during this year. The budget will be divided as follows: 51.3 billion won to reinforce SME’s export capabilities, 13.6 billion won to support SMEs’ efforts in obtaining foreign standards test and certification, 5.6 billion won to utilize overseas civilian networks, 8.2 billion won to foster export incubators, 1.9 billion won to support utilizing overseas private networks, 2.6 billion won for on-line export support.

Q:  Will you elaborate on programs to support the publicizing of SMEs’ products?

A:  The programs are designed to enhance consumer awareness & recognition of SME products and to support the exploration of markets by pitching for them via diverse media channels. We’re striving to utilize a storytelling method to play up their competitive edge, departing from the conventional way of only publicizing the items. 

There are two main programs to promote SMEs’ products. We are introducing SME products through mass media such as broadcast and newspaper as well as supporting SME product sales through online channels such as social commerce and TV home shopping channels with opening SME product exclusive corner.

Q:   Will you introduce us to programs to provide support for the marketing of SMEs’ products?

A: Even though SMEs develop and produce excellent items, they suffer difficulties such as high charges and unfair practices due to a shift into a conglomerate- controlled domestic distribution market. They are also facing the most daunting tasks such as market exploration and marketing support to gain growth momentum. A survey conducted by the Korea Federation of SMEs in 2011 showed that 33.2 percent of the respondents cited as the most troubling thing the exploration of markets, followed by 31.5 percent who cited a lack of money, and 16 percent who cited a lack of manpower, and 10.5 percent who spoke of insufficient marketing capabilities. 

As a result, our administration is implementing programs to support the exploration of diverse marketing channels, the biggest problems SMEs are suffering, and giving a helping hand to the strengthening of their marketing capabilities. The SMBA has set aside 20.9 billion won for the 2014 budget to support SMEs’ exploration of marketing channels. 

Here is a look into some of the major programs to support SMEs’ marketing activities, including the operation of a SME Group AS(after-sales) center. We’ve been operating the SME Group AS center in the Small Business Distribution Center in Mok-dong, Seoul, since 2007 to solve A/S problems SMEs are suffering and provide the A/S services similar to those offered by conglomerates. The number of beneficiaries of the program has risen to 700 companies and 10,000 items so far this year. Experts are supposed to diagnose and analyze the causes of the most frequent A/S service issues and find solutions to improve the quality of SMEs’ items. 

Offline and online outlets for the exclusive sale of SMEs’ products will be expanded or newly opened. The offline sales outlets in key commercial districts of major cities, including Myeong-dong, downtown Seoul, and Cheongju, Chungcheongbuk-do, and in public buildings, including the KTX Busan Station, will be expanded, and the number of such outlets will rise from 13 in 2013 to 20 in 2014. Furthermore, we have a plan to launch SME exclusive product corner to help SME’s entry to online market in open markets and social commerce, which lead to 2,000 sales in 2014. 

Marketing coordinators composed of distribution experts will be made available to offer tailored marketing consulting services ranging from market research to product planning & development to give a helping hand to SMEs suffering from a shortage of manpower and finance. 

One-on-one sales consultations meeting between large-sized purveyors and SMEs will help enlarging SME’s marketing channels and SME product special fairs will help boosting SME’s direct sales.

The SMBA promotes the manufacturing process of products by utilizing a storytelling method for SMEs that lack of publicity opportunity while developing and promoting Co-brands to beef up their brand power. 

The SME MRO Support Center is operated to provide education, coaching, consulting, and exhibition for repair & operation (MRO) SMEs to, which enhance their self-sufficiency and competitiveness.

Q:  Will you explain the diverse export support policies to give a shot in the arm for SMEs’ exporting capabilities?

A:  The reality is that the nation has to depend on international trade now that Korea’s domestic market is saturated, and the nation’s dependence on international trade stands at 113.2 percent. Globalization of SMEs is an essential imperative, not an option, to explore wider markets and cope with the trade environment under the regimes of FTAs.

The SMBA is focusing on various support policies & measures to expand SMEs’ exporting base and their exporting capabilities to help them make an inroad into foreign markets. We’re implementing a program to beef up their exporting capabilities by offering a package of support ranging from education on trade to publicity design, buyer exploration, and on-site marketing, according to respective competence levels of SMEs such as domestic-demand-oriented SMEs and & export beginners, promising SMEs, and globally strong & competitive SMEs. It is believed that about 1,900 SMEs benefit from the program, annually. 

We’re aggressively supporting a program to provide support to SMEs’ entry into developed markets such as U.S. and EU B2C markets and large domestic markets such as China and Indonesia by through utilizing the opportunities of FTAs expansion and the fervor of hallyu (the Korean Wave). It is believed that about 1,000 items from SMEs benefit from the program annually. 

The SMBA provides support to 3,200 SMEs annually to help them gain international standards test & certificates such as CE and UL responding to successfully overcome TBT(technology barriers to trade).

We give an annual average of 3,200 SMEs opportunities to participate in overseas exhibitions or joint overseas market exploration teams to such FTA signatories as the United States and EU as well as emerging countries to help them promote their products and explore buyers.

The administration is striving to expand domestic and overseas exporting infrastructure for extending a helping hand to SMEs by building one-roof export support systems, installing export incubators, and designating and operating overseas private networks. 

We’re doing our utmost to help SMEs aggressively cope with external trade environments, including FTAs and currency exchange fluctuations. Some 6,000 people from SMEs undergo an educational program on the issuance of FTA certificates of origin annually while 800 SMEs are given the related consulting services. Some 100 firms are fitted with systems on FTA certificates of origin complying with their ERP and other in-house information systems. We extend support to SMEs’ subscription of foreign exchange insurance, and we plan to offer educational programs on foreign exchange risks to help SMEs cope with foreign exchange fluctuations such as a low yen.