Small companies create more jobsIn the age of new normal, the key to job creation is held by small and mid-sized companies. Since 2013, employment of the 20 biggest conglomerates has been decreasing, while small and mid-sized companies created more than 1 million jobs in two years. As the trickle-down effect of the conglomerates hit the limit, the center of Korean economy is shifting from large corporations to small and mid-sized enterprises.
The government is focusing on intensive nurturing of small and mid-sized businesses using all possible policy measures such as R&D support, funding, marketing, training and regulatory reform. In the past, small and mid-sized companies had been treated as the relative weaklings that needed protection and consideration. Now, the focus is independence and growth to gain global competitiveness.
The government policy and strenuous efforts by small and mid-sized companies have attained visible outcomes. This year, despite the continued decrease in export by conglomerates, small and medium-sized companies’ exports have bounced up. Combined with companies in middle standing, they make up 38 percent of total exports, and at this rate, they will be responsible for more than 50 percent of Korea’s exports in a few years.
Small and medium-sized businesses and companies in middle standing need to focus on “globalization” by expanding exports to break the zero-sum competition in the small domestic market. By building global competitiveness and advancing to the foreign market on their own or through partnership with other companies, they will be able to create more jobs and overcome a low-growth economy.
The prospect of the global economy is not very bright in 2017, but Koreans have the potential to break through the rough times. In the new normal of low growth, the average economic growth rate of the OECD members was below 1 percent. But Korea had nearly 3 percent growth.
Having built the miracle of the Han River on the devastation of the war and escaped the IMF bailout in the shortest time in the aftermath of the 1998 financial crisis, Korea has always used troubled times as an opportunity to take another leap. The prolonged global economic slump and expansion of trade protectionism increase domestic and international uncertainty, but Korean economy can endure the hard time with the power of small and medium-sized companies. Let’s have the pride and confidence to shake up the global economy. Let’s get up and run again.