Director General Baek Un-man of the Business Marketing Bureau at the Small and Medium Business Administration (SMBA).(Photos:SMBA)

"We set two major policy tasks —boosting the vitality of SMEs’ corporate management through the invigorating of domestic market access and expediting overseas entry and expanding corporate growth potential by providing policy financing and manpower support tailored to meet needs,” said Director General Baek Un-man of the Business Marketing Bureau at the Small and Medium Business Administration (SMBA). 

The following are excerpts of a written interview between NewsWorld and Dir.-Gen. Baek, in which he spoke of diverse policies to provide support to SMEs. 

Question: Will you tell our reads about major business plans of the Business Marketing Bureau and pending issues?

Answer: Our bureau is charged with executing functions of exploring difficulties SMEs experience in such management and marketing areas as financing, manpower, marketing and exporting following their establishment, and reflecting them into policies to help them attain growth on a constant basis.

First, we strive to expand SME products’ market access by improving a public purchase system in which public entities give SMEs preferential treatment in purchasing their products, enhancing SMEs' marketing capabilities and expanding distribution channels for easy market entry. Second, we help SMEs boost exports and go global by strengthening their capabilities to gain access to foreign markets, tailored to meet demands varying according to stages of growth. Third, we expand policy financing and technology financing support to technology-innovative SMES. Fourth, we execute such policy tasks to ease manpower shortages SMEs experience as the ones to cultivate and supply working-level manpower tailored to meet the needs of each site and to improve people’s awareness of SMEs. 

We also strive to promote the development and settlement of the public TV home shopping channel that made its debut in July. We provide support to help SMEs so their creative and innovative products gain access to a distribution market, while concentrating our policy capabilities on helping SMEs boost exports by making the most of the Korea-China Free Trade Agreement.

Q: Will you elaborate on your bureau’s projects to provide support to management of SMEs?

A: We set two major policy tasks boosting the vitality of SMEs’ corporate management by invigorating domestic market access and expediting overseas entry; and second, expanding corporate growth potential by providing policy financing and manpower support and implementing diverse policies related to each policy task. 

First, in an effort to boost access to the domestic market, our bureau carries out such projects as public entities’ purchasing of SME products and a project to provide support for marketing and publicity of SME products. We have in place such projects tailored to boost exports of products made by companies ranging from startup to global growth. 

We act as a vehicle to promote SME’s exporting capabilities, to support for the acquisition of foreign certifications, and to play as an incubator for SME exporters. 

We provide such diverse facility and operation policy funds as the Startup Support Fund, New Growth Foundation Fund and Developed Technology Commercialization Fund through the Small and Medium Business Corp. (SBC). 

The Korea Credit Guarantee Fund, Korea Technology Finance Corp. and regional credit guarantee foundations offer diverse credit guarantees to SMEs. 

In an effort to solve manpower shortages SMEs experience, SMBA implements programs to cultivate and supply technicians and skilled manpower to SMEs in cooperation with industrial circles and educational institutions as well as on-the-job training and other projects to meet demands to enhance SME workers’ capabilities. 

Q: Will you explain a project to help SMEs ramp up publicity and marketing to expand their products’ market access?

A: SMEs sometimes feel frustrated with such woes as limited market access, even though they endlessly make innovative products. SMEs struggling through the so-called Death Valley are closely related with failures to market access. This may be construed as the fact that selling is as important as producing. SMEs usually lack capabilities to publicize their products and promote their marketing due to coarse business environment.

The government invests 23.3 billion won to implement diverse projects to provide support for marketing for SMEs access to the domestic market. First, Some 700 good-quality SME products selected among those suffering from limited exposure to customers are publicized online, offline, on publicity channels, in newspapers and on TV home shopping channels. 

Second, we implement the Marketing Innovation Project to provide support to some 500 items from startups and help innovative companies gain access to Korean and foreign marketing channels. 

Third, SMBA implements a project to develop and publicize a combined 18 common brands, each involving five SMEs, annually while SME cooperatives and organizations host a combined 38 purchase consulting sessions and marketing exhibitions to help SMEs access to marketing channels. 

Fourth, we strive to boost SME products’ access to online market channels so that a combined 3,000 products can be put in such shopping malls as open markets annually. In 2016, SMBA plans to evolve an integrated distribution platform, an organic combination of broadcasting, internet, mobile and offline channels with a focus on the public TV home shopping, to boost marketing performances of SME products. 

Lastly, recognizing consumers’ dismissing SME products due to lack of after-sale guarantees, we operate a joint after-sale support center designed to provide support to 720 companies as after-sale consulting and handling of after-sale services, education on improving awareness and after-sale management annually. 

Q: Will you touch on the current status and plans of a project to strengthen SMEs’ exporting capabilities?

A: The project is designed to offer a package of support programs depending on three stages of SME’s exporting capabilities  exporting beginners, promising exporters and global exporting superstars. SMEs’ participation in the project is greater since they are allowed to choose their own stage of growth. 

A package of programs consists of 29 detailed programs in six areas, including education on exporting, design, information service and marketing/publicity. Currently, 1,568 companies selected for this year benefit from the project, and the figure will rise to 1,600 companies for next year. Each exporter beginner receives up to 21 million won in financial support, each promising exporter, up to 35 million won, and global exporting superstars, up to 50 million won. The government subsidizes up to 70 percent of the costs of programs for export beginners and promising exporters and half of the costs to global exporting superstars. 

Q: Will you introduce policies to support SMEs’ acquisition of foreign certifications and exporting?

A: The project to support SMEs’ acquisition of foreign certifications made its debut in 1998 for SMEs experiencing hard times due to the weakened domestic market in the wake of the 1997 Asian financial crisis. 

Countries are scrambling to build such technical barriers to trade (TBT) as environment and health regulations designed to protect safety of local people instead of eliminating tariffs in accordance with the expanding of free trade agreements (FTAs). In particular, Korean exporters are forecast to face an uphill battle in exporting due to a surge in notifications of TBTs to the World Trade Organization from developing countries and emerging economies in the Middle East and Central and South America. 

SMEs have a hard time in acquiring foreign certifications due to a lack of funding, expertise manpower and information. SMBA subsidizes part of the costs for acquiring foreign certification between 50 percent and 70 percent or up to 100 million won. The administration provides information on foreign certifications and technical support tailored to meet SMEs’ needs. Experts are dispatched to solve difficulties SMEs experience in trying to obtain foreign certifications. 

We have the following exporting support programs in place. First, SMBA installs and operates centers for supporting exports to 14 regions to extend a helping hand to local exporters. The centers regularize business explanation sessions and meetings designed to cope with exporting difficulties in cooperation with SBC and KOTRA. 

Second, we support SMEs participation in overseas exhibitions through the Korea Federation of Small and Medium Business. Each SME participating in an overseas exhibition is given a subsidy of up to 10 million won or half of the joint expenses, including booth rental charges. SMEs that cannot afford to participate in overseas fairs are allowed to form consortia in the identical and similar industries to join forces in exploring to foreign markets. Each consortium receives up to 200 million won or up to 70 percent of the joint expenses. 

Third, SMEs are given support in exploring overseas markets by capitalizing on large companies’ office space, logistics, after-sale and distribution networks in foreign countries. We provide support to promote the marketing and exporting of SME products in conjunction with the hosting of such hallyu (Korea Wave) events as K-Pop performances and activities to promote hallyu brands as well as to telecast SME products abroad through foreign platforms of four TV home shopping channels. Currently Lotte, Hyundia, CJO and GS own 23 overseas platforms in 12 countries. 

Fourth, we support SME products’ entry to foreign distribution networks. 

Fifth, SMBA provides support to SMEs’ diverse consulting services and marketing activities via civilian networks advancing to foreign countries. 

Sixth, we play as an exporting business incubator to help exporting beginners in the manufacturing or knowledge service industries ease risks of exploring foreign markets.

(On the courtesy of the website of SMBA)