Park Cheol-kyu, president of the Small and medium Business Corporation (SBC), said his corporation has redoubled their efforts to offer support to SMEs, which serve as the backbone of the nation’ s industries.

“I think policies could come from the field and I could learn ideas to immediately solve grievances and complaints. The rationale of the wisdom is lending an ear to people’ s words. Upon my inauguration, I began to tour the sites of SME-making corporate observations on nine occasions and holding consultative meetings with SME CEOs twice°™with my commitment to becoming a ‘chief listening officer,’ ” Park said.  

“I strive to continuously keep bilateral communication channels open with SMEs, customers, and inside stakeholders, particularly by holding ‘SBC communication forums,’  concentrating our capabilities on start-ups, job creation, and other new and core businesses instead of eliminating non-essential jobs, pushing strategic jobs via the ‘Monthly Policy Calendar,’  and innovating communications through social network services,” he said. 

The following are excerpts of an interview between NewsWorld and SBC President Park in which he spoke of the SBC’ s mission, 2012 tasks, and other policy steps to provide support to SMEs.

Question: Would you introduce the SBC to our readers?

Answer: The SBC is a non-profit, government-funded organization, established in January 1979 with the goal of contributing to the development of the national economy by efficiently implanting projects to promote SMEs. The SBC, now in its 33rd year, was founded for the purpose of buttressing SMEs, which serve as the backbone of the domestic industries after going through the first and second oil shocks of the 1970s. 

We, as the organization for enhancing SMEs’  competitiveness and solving pending field problems, have our top four tasks-business diagnosis, financing, marketing and training. 

Q: Would you explain the SBC’ s major tasks for 2012?

A: The SBC puts forward its fullest efforts to ensure a stable supply of SME Policy Fund Loans, standing at 3.333 trillion won for the year 2012, so that SMEs can tide over increased uncertainties such as the slumping of the real economy caused by the euro zone debt crisis, the Iranian nuclear issue, and crude oil price hikes. We’ re striving to ensure that 61.6 percent of the policy loans will be front-loaded in the first half. In particular, the SBC plans to widen the scope of Hybrid Financing (Mezzanine Financing) from 100 billion won in 2010 to 150 billion won in 2012, departing from a practice of extending loans. We’ re focusing on the settlement of the so-called SME One-stop Clinic Service, which diagnoses, prescribes, and dispenses management solutions to businesses. The SBC is to establish a process of integrating its top four core projects - diagnosis, funding, marketing, and training - on the basis of the implementation of the program. The trade adjustment assistance system will be revamped and the terms of the qualifications of consulting services and trade adjustment assistance will be eased up to help companies suffering from losses from the implementation of FTAs to recoup their competitive edge. 

The SBC is playing a leading role in implementing job creation, the nation’ s top state task. All our projects are geared up for creating jobs with the 2012 goal of employing 10,474 people. We have a new project to explore 500 hidden gem SMEs that offer working conditions, welfare benefits and financial soundness, almost equivalent to those of large-sized businesses. We are in the process of building a database for those SMEs to connect them with college students and jobseekers. We will create an employment website based on the database and advertise a link to the site on online portals and social network services so that the job-seekers have a better awareness of the excellent SMEs. 

The government and the private sector will raise 210 billion won in the Venture Start-up Fund for young entrepreneurs to expedite the creation of jobs and start-ups for people aged below 39 with excellent ideas. 

Thirteen Young Entrepreneur Centers have been already set up across the nation to provide a one-stop service necessary for string up a new business, including the Venture Start-up Funds of flexible repayment schemes. In the meantime, we plan to expand around 250 new trainees this year, a slight increase from the 212 graduates in 2011. 

Q: What are your strategies to operate the SBC?

A: I declared my determination to spearhead support for SMEs as “a frontrunner sharing both joys and sorrows with SMEs in the field” when I took the helm at the SBC, and I expounded on three policy tenets°™pursuing field management based on the five senses, maximizing capabilities in core sectors under a scenario of choice and concentration, and support for the core policy task of creating jobs. 

I think policies could come from the field and I could learn ideas to immediately solve grievances and complaints. The rationale of the wisdom is lending an ear to people’ s words. Upon my inauguration, I began to tour the sites of SMEs °™ making corporate observations on nine occasions and holding consultative meetings with SME CEOs twice  °™ with my commitment to becoming a ‘chief listening officer.’   

I strive to continuously keep bilateral communication channels open with SMEs, customers, and inside stakeholders, particularly by holding ‘SBC communication forums,’  concentrating our capabilities on start-ups, job creation, and other new and core businesses instead of eliminating non-essential jobs, pushing strategic jobs via the ‘Monthly Policy Calendar,’  and innovating communications through social network services.

Q: Will you elaborate on your efforts to reflect SME’ s voices in the field in implementing policies?

A: Under the Policy Improvement Proposals between 2011 and April 2012, the SBC received 2,195 grievances and complaints from SMEs regarding funds, manpower, marketing, technology, and regulations via our 31 regional branches. We submitted to government agencies, including the Ministry of Strategy and Finance and the Small and Medium Business Administration (SMBA) 93 cases as recommendations, 14 of which were reflected into policies. For instance, the Ministry of Knowledge Economy revamped the time-consuming testing of harmful substances in textiles and leather products and changed it into a low-cost test based on objective standards with a reduction of the issuance period of testing outcomes.

We’ ve devoted ourselves to submitting to government authorities the pending issues of the SME field after scrutinizing them in real time and supporting the establishment of response measures, as was the SBC’ s surveying of the damages SMEs received from the Japanese earthquake and nuclear accident in March 2011 and the Sept. 15, 2011 power outage.

The SBC is constantly sharing the developments of SME sites by surveying SMEs’  sector-by-sector and regionally on a monthly basis and their movements and prospects on a quarterly basis, then distributing them to the government, professors and other experts’  groups. 

The government and companies have given the SBC a good reception as a policy go-between, with the SMBA making strenuous efforts to solve grievances and recommendations from SMEs. Furthermore, we’ re making our fullest efforts to serve as a “bridge” to create a better environment for doing business as the expansion of one of the 2012 business tasks. 

Q: Would you explain about the effectuation of free trade agreements (FTAs) and how SMEs are seeking solutions to overcome hard times?

A: Korea, which started with the signing of an FTA with Chile in 2004, now has eight FTAs involving 45 countries, including the Korea-U.S. FTA and the Korea-EU FTA. 

FTAs are expected to serve as a new engine behind SMEs’  growth now that FTAs have an effect of helping SMEs strengthen their competitiveness thanks to a decline in exporting prices due to the lowering of tariffs, expanding jobs from an increase in production, and the facilitating of foreign direct investments and opportunities to explore new overseas markets. The benefits Korean companies would receive from the elimination of tariffs to exports to the United States and the EU was estimated at about 2.5 trillion won as of 2008.

FTAs are considered opportunities for SMEs, but they are warned against the “spaghetti bowl phenomenon” that could lead to their lower utilization of FTAs due to the complex and different rules and regulations of origin, like a bowl of entangled noodles. As part of efforts to enhance the utilization of FTAs, SME CEOs are advised to actively receive government-initiated education and consulting programs on rules and regulations of origin. They are also asked to take advantage of the SBC’ s measures to solve complaints and problems related to rules of origin and marketing activities to explore new markets to realize FTAs’  ultimate goals of boosting exports through the exploration of foreign markets. 

Q: What steps are in place to support SMEs in the wake of the effectuation of the KORUS FTA and Korea’ s May 2 official launch of FTA negotiations with China?

A: First of all, the SBC is concentrating on helping SMEs enhance the utilization of FTAs with major economic powers and make inroads into the markets of the FTA signatories by taking advantage of its programs to provide policy fund loans, marketing, consulting, and other support to SMEs. We plan to boost export-financing support from 76.2 billion won in 2011 to 80 billion won in 2012. 

Starting in June, we will begin to implement the FTA assistance program, dubbed the “FTA Doctor Project,” to offer consulting services tailored to meet tariff house brokers and accountants’  diagnoses so as to provide assistance for SMEs’  market entry into FTA signatories. 

The SBC plans to launch the new Online Export Assistance trade office service website pilot program to offer publicity and marketing activities to Korea-ASEAN FTA markets with a potential for SMEs’  market entry initially targeting 1,000 products from 200 countries.

We plan to operate export incubators in centers of KORUS and Korea-EU FTA signatories. 

The SBC plans to expand the frequency of sending delegations or participating in exhibitions for exploring the markets of the FTA signatories from 100 in 2011 to 107 in 2012. #