apec sme · 2010. 2. 22. · column apec sme 4 innovation briefing ‘let’s actively utilize...

APEC SMEInnovation Briefing

APEC SME Innovation Center

December 2009 / No. 8

CONTENTS4 Column

- Let’s Actively Utilize Online Biz in Pioneering Overseas Markets

- Indonesia-Korea Bilateral Economic Relations

- New Look at Market Accessibility, Availability, Adaptability

11 Feature Story

- Daegu Initiative Assessment & 3 Champions

14 Best Practices

- 'Green Factory' - SME Exit Strategy in Green Growth Era

- Taiwan - New Rising Star in World LED Industry

- Pioneer of Vertical Axis-type Wind Turbines

21 SMEIC News

- 2009 APEC SME Innovation Seminar Held in Seoul

- SME Innovation Consulting in Indonesia & China

- SBC Holds 4th East Asia SME Roundtable Meeting

- Thai Industry Minister and BOI Secretary General Visit SBC

- Korea-Japan Business Match-Making Session

- Technology Cooperation Seminars With Russia, CIS

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APEC SMEInnovation Briefing4

‘Let’s Actively Utilize OnlineBiz in Pioneering OverseasMarkets’

By Lee Ki-WooPresident

Small & medium Business Corporation (SBC)

Our economy is showing a clear recoverytrend, including economic growth in thesecond half of this year that is increasing2.6% from the first half.

This trend is also apparent among SMEs,but the recovery speed that is felt to theskin is still slow due to uncertainties ininternal and external environments,employment instability, lack of success inreducing household debt, insufficientimprovement in corporate businessperformance, etc.

However, we should not overlook the factthat we now, when we are about to moveout of the dark shadow of recession, havenew opportunities for our SMEs.

More often than not, our economy isliving off our exports. According to anannouncement by the Bank of Korea, theexport vs. GDP ratio has continuouslyincreased over the past several years to46.3% in 2009.

Meanwhile. the ratio of the nation's totalexports represented by SMEs rose to 39.7%in the first half of this year from 30.9% atthe end of 2008. The export amount ofSMEs increased 1.0% year-on-year toUS$65.85 billion as of the end of June thisyear, a surprising result when the 22.5%decline in the nation's total exports is takeninto account. Even though a small amount,our SMEs' grass-root exports realized

through overseas market exploitation are ashining light amid the economic crisis.

Yet, it is also a fact that SMEs have alwaysexperienced difficulties in pioneeringoverseas markets due to the scarcity ofexport-specialized manpower and capital.According to the findings of a recentquestionnaire survey, the weakness ofcapabilities to respond to externalenvironmental changes and lack of exportmarketing ability for diversification ofbusiness partners were the biggesthardships for export-related SMEs.

There may be diverse ways to overcomesuch hardships, but I think that onlinebusiness, which is emerging as a newparadigm in 21st century world trade, canbe one of the methods.

On eBay, the representative U.S. e-commerce enterprise, the number ofpersons involved in businesses with activeaccounts is as high as 90 million. Last year,e-Bay reportedly facilitated transactionsamounting to US$60 billion.

Also an analysis by a renowned overseasmarket survey agency found that, althoughtraditional offline-type marketing, includingparticipation in exhibitions, etc., is stillstrong, the growth in marketing budgetutilizing online media or search enginesexceeds 50%. Therefore, online businessescan provide opportunities for our SMEs to

“There may be diverse

ways to overcome

such hardships, but I

think that online

business, which is

emerging as a new

paradigm in 21st

century world trade,

can be one of the

methods.”

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APEC SMEInnovation Briefing 5

compete advantageously in the global market with lowercosts.

Of particular note, our country, which boasts theworld's seventh highest Internet utilization rate as of theend of 2008, has to more actively utilize its advanceddigital environment as a driving force for overseasadvancement.

I encourage our SMEs to actively utilize the ‘OnlineMarketing Support Project’ offered by SBC as theyadvance abroad. At present, SBC is operating the onlinetrade site ‘Gobizkorea.’ In addition, SBC is providing tradeconsulting along with coordination of domestic SMEswhen overseas buyers wish to import domestic productsas well as establishment of online export infrastructure,including foreign-language homepages and e-catalogs.

Reflecting the online trend of publicity & marketing,SBC is always there for SMEs with a plan to promoteonline export support businesses utilizing renownedoverseas search engines, etc.

Considering the globalization of the world economyand our limited domestic economic scale, our SMEs mustadvance into overseas markets for survival.

We have proud precedents for turning crises intoopportunities. Now, in preparation for the emergingeconomic recovery, I expect SMEs to secure growthpotential through development of high value-addeditems and exploitation of niche markets utilizing onlinebusinesses.

Successful Case of e-Business CooperationAiming to create a successful model for SME

innovation by establishing a consistent marketeconomic environment, the APEC Innovation Center islooking to produce momentum from e-businesscooperation between Korea and China. This programfeatures mutual linkage of the Korea-China ProductInformation Network and establishment of a Korea-China SME e-business cooperation corner.

Exploiting the advantages of digital convergence,networking and clustering of innovative SMEs, theprogram links networks of the two countries, Korea’sGobizkorea site (www.gobizkorea.com) and China’s(www.sme.com), as well as the launch of the Korea-China Online Trade Corner. The latter forum links theSME product information networks of the twocountries and provides a platform for ‘Online Trade’and ‘Trade Data Room.’

The ‘Trade Data Room’ provides historical data andinformation to facilitate bilateral trade, various export &import document forms, standard trade contract

formats, etc.

The Center is also pursuing the establishment of aKorea-China SME e-Business Cooperation Corner at therespective Gobizkorea and SME.com sites of Korea andChina. The corner will provide Chinese-languagehomepages, e-catalogs and company blogs for thoseenterprises that are seeking cooperation with SMEs ofthe two countries so that the enterprises themselvescan publicize their own products and services.

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Indonesia-KoreaBilateral EconomicRelations:

Focus on Small and Medium Enterprises

By H.E. Nicholas T. DammenAmbassador of the Republic of

Indonesia to the Republic of Korea

Indonesia and the Republic of Korea haveso far enjoyed close and friendly cordialrelations since its inception in 1966. Sincethe establishment of diplomatic relationsbetween Korea and Indonesia in 1973,both countries have maintained a closerelationship in the fields of politics,economics, culture and others. The friendlybilateral relations between the twocountries are indeed admirable which ismarked by the frequent visits of bothPresidents as well as meetings in variousregional and international forums.

The bilateral relation between Indonesiaand Korea has been gaining a greatermomentum since the last three years. Thetwo countries established Joint Commissionchaired by its Foreign Ministers on 9 June2006. This is further strengthened by thesigning of “The Joint Declaration onStrategic Partnership to Promote Friendshipand Cooperation between the Republic ofIndonesia and the Republic of Korea” bythe two leaders on 4 December 2006during the visit of President Roh Moo-hyunto Indonesia.

It is well-recognized that the twocountries complementary each other. TheIndonesia’s abundant of natural resourcesand rich of biodiversity coupled by labourforces and market potential will bear fruitshall they be well-managed by the Koreanhigh-technology, capital and skilled-management. This condition has indeed

shown by the increasing trade, investmentand economic cooperation as well as thestrengthening of political and socio-culturalcooperation between the two countries.

Economic relations between Indonesiaand Korea have been further strengthenedwith cooperation which covers many fields:economic development; informationtechnology; foreign workers; energy;maritime and fisheries; forestry; tourism;science and technology; as well as smalland medium enterprises.

On bilateral trade, Indonesia and Koreaare important trading partners to oneanother. Total trade between Indonesia andKorea in 2008 amount to US$19.25 billionwhich grew 29.4% compare to 2007 whichamount to US$14.89 billion. Exports ofIndonesia to Korea increased from US$9.1billion in 2007 to US$11.3 billion in 2008,or a growth of 24.2%. Imports of Indonesiafrom Korea grew by 37.5%, from US$5.8billion in 2007 to US$7.9 billion in 2008.

According to the Exim Bank of Korea,Korean FDI to Indonesia in 2007 has morethan doubled than the level in 2006 toreach US$604 million, from US$257 millionin 2006. For 2008, Korean investment inIndonesia amounted US$719 million whileas the cumulative value, according toIndonesia Investment Coordinating Board,there are some 3,000 projects involving theKorean investment since 1968-2008 with

“The potentials of

Indonesian domestic

market and

complementary of

resources as well as

technological between

Indonesia and Korea,

bilateral relations in

terms of SMEs

cooperation of the two

countries have big

potential to further

develop in the future.”

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the total value about US$13 billion.

At present, there are more than 2,500 Koreancompanies operating in Indonesia and more than 30thousand Korean people domicile in Indonesia whichcount the biggest foreign community living in thecountry. It ranked Korea the 7th biggest foreign investorin Indonesia and the 1st biggest in terms of number ofprojects. Small and medium companies are the bulk ofKorean investors in Indonesia working on manufacturingsectors such as textile, garment, foot ware, toys, plasticware, electronics, etc.

The afore mentioned complementarities between thetwo countries has also been proven by the fact that theRepublic of Korea is hosting quite number of migrantworkers from Indonesia. Also, to put the SMEsperspective in the picture, the employer of Indonesianworkers in Korea are working for ROK’s small andmedium enterprises in manufacturing and agriculturalsectors. In their own way, both the workers and theiremployers have been contributing to the economy oftheir respective countries.

SMEs Empowerment in Indonesia

The policy of the SMEs Empowerment in Indonesia, inthis case micro, small and medium enterprises and alsocooperatives, is linked to the aspect of economicdevelopment towards people welfare. Two importantpoints in terms of SMEs empowerment in Indonesia arepro job and pro poor.

In having experience of two crises of 1998 and 2008,Indonesia is certain that SMEs and cooperatives are themost resistance institution against the crisis. In 1998 crisis,SMEs and cooperatives were Indonesia’s main actors insustaining the employment rate and welfare level of thepeople. These are the main reasons of putting the policyof SME empowerment in the lime light.

More than 90 percent of business units in Indonesia arecategorized as micro, small, medium enterprises andcooperatives covering tens of millions of business in everycorner of Indonesia. With national economic growth ismainly driven by consumption, the role of SMEs andcooperatives is very significant in sustaining the economicresilience in addition to its role in eradicating poverty andproviding jobs.

In its endeavor to empower the SMEs and cooperatives,the Government of Indonesia is focusing on three fieldsof action: human resources, business climate andinstitutional dimension. On the field of human resources,Indonesian Government is focusing on increasing theaccess to productive resources, competitiveness andproductivity as well as the issue of entrepreneurship,innovation and technology applications. In improving thebusiness climate for SMEs, Indonesian Governmentconsiders the importance of providing financingresources and expanding the marketing facilities forSMEs. While in institutional dimension, IndonesianGovernment focuses on enhancing the quality, legalaspect and image of SMEs and cooperatives throughprofessionalism and modernization.

In pursuing these policies, Indonesian Governmentdetermines on an open ended international cooperationin various levels, from bilateral, regional and multilateral.

Closing

Focusing on complementary nature of economicrelations between Indonesia and Korea, both countrieshave already established a win-win relations for thebetterment of both countries, in this instance related tosmall and medium enterprises. As part of this strategicrelations, Badan Koordinasi Penanaman Modal (BKPM) ofIndonesia as the national investment board hasestablished a MoU of cooperation with Small & MediumBusiness Corporation (SBC) of Korea in establishing aKorean Desk at BKPM office in Jakarta as to provideassistance for Korean SMEs which having intention ininvesting in Indonesia. As for facilitating Korean SMEswhich have already established their operation inIndonesia, PT. Permodalan Nasional Madani (PNM) ofIndonesia with Small & Medium Business Corporation(SBC) of Korea also have agreed to form a cooperation inproviding a help desk for Korean SMEs in terms of SMEsempowerment.

With the robustness of SMEs against any cyclical crisis,the potentials of Indonesian domestic market andcomplementary of resources as well as technologicalbetween Indonesia and Korea, bilateral relations in termsof SMEs cooperation of the two countries have bigpotential to further develop in the future. May these be inform of new investments, market penetrations andresource utilizations from both sides of the countries.

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New Growth Paradigm of APECEconomies

When APEC was established in 1989 tochampion free and open trade andinvestment, its primary goal, as stipulated inthe mission statement, was “to supportsustainable economic growth andprosperity in the Asia-Pacific region.”

Just 20 years after its founding, thepremier Asia-Pacific economic forum hascharted a new growth paradigm, adding an“inclusive growth” model to the previous“sustainable growth” goal.

In a statement issued November 15 inSingapore, leaders of 21 economiesthroughout the Asia-Pacific endorsed the

goals of the G20 Framework forStrong, Sustainable and

Balanced Growth anddeclared their intent to

“ensure a durablerecovery that willcreate jobs andbenefit our people.”

This significant changereflects the different landscape of the

world economy, in particular in the wake ofthe receding global economic crisis.

The recent crisis has underlined thatcontinual economic growth is not a given,

and that, despite APEC's efforts, not allsegments of society have benefited equallyfrom the upturns and some have sufferedmore in the downturns.

More clarity as to how inclusive growthwill be achieved will come when APECLeaders and Finance, Trade, and ForeignAffairs Ministers consider the issue; andJapan, as host of APEC in 2010, will lead thedevelopment of a comprehensive workprogram. However, it is not based on aredistributive approach. Rather, it isanchored in a strategy of sustainabledevelopment that enables all parts ofsociety to participate in, contribute to andshare the benefits of growth.

SMEs in Driver's Seat for InclusiveGrowth

In any circumstance, a key part of an“inclusive growth” strategy is improving theperformance and sustainability of APECSMEs.

Being small and with limited resources,SMEs face many challenges even in normaltimes. They tend to be hit harder byrecession and lag behind large corporationsduring expansionary phases as they lackeconomies of scale and bargaining power.

Nevertheless, SMEs are - and will continueto be - a key source of growth for APEC

New Look at MarketAccessibility, Availability,Adaptability

APEC and Inclusive Growth

Yoosook Kim, Ph. D.Director, Overseas Marketing

Division, SMBA

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economies, sitting in the driver's seat of “inclusivegrowth” for the global & regional economies.

They should, therefore, be encouraged to participatevigorously in growth strategies as well as be providers ofjob opportunities.

Market Access & Internationalization

Given the realities of the current environment, marketaccess and liberalization has significant implications and isof paramount importance for realizing the dream of“inclusive growth” of APEC SMEs.

In this context, the APEC SME leadership hasdesignated the Small and Medium Enterprise WorkingGroup (SMEWG) theme for 2009 as “Helping SMEsAccess Global Markets and Overcome Trade Barriers.”

Consistent with the concept of “inclusive growth”, thefour-year Strategic Plan (2009-2012) of the APECWorking Group underlines market access andinternationalization as one of six priorities and actions.

The APEC SME Innovation Center, located in Seoul,Korea, is making efforts to innovate the environment thatwill generate the greatest opportunities to access theresources they merit and require while facilitating firmsenter and exit the market to freely.

Inspiration From Korea’s SME Global Outreach

In the 1960s, Korea adopted a so-called outward-looking, policy in a departure from a domestic-marketoriented economy. The outward-looking strategy thatfocused on global markets proved to be the key elementin transforming an absolutely poverty-stricken countryinto the dynamic economic powerhouse that is Korea atpresent.

Today’s global Korean conglomerates like Samsung,Hyundai, LG and others were originally like small andmedium enterprises at the time the outward-lookingpolicy was initiated.

Now, Korea is striving to implement a second outward-looking strategy designed to foster SMEs as hidden globalchampions.

To accomplish this, our focus is on enhancement of

market accessibility, adaptability and availability for smalland medium enterprises.

To achieve success in this endeavor, Korea is well awareof the importance of international cooperation,collaboration and coordination.

In the international economic game, there should beneither winners nor losers -- there should be only co-champions.

Highlights of Korea’s APEC Regional Market Alliance

The character of Korea’s SME global market initiatives isthe combination of traditional outward-looking policies; awin-win spirit & principles commensurate with the globalvillage era; and networking with technology, especiallythe fusion of knowledge IT, and culture.

SME Business Matching

This program is aimed at turning practical cooperationinto actual business transactions, creating new businessopportunities with the enhancement of marketavailability.

We have employed this model with next-door neighborJapan, supplementing it with complementary programssuch as government-private sector joint policy dialogue,matchmaking consultation sessions, industrial technology

Dr. Yoosook Kim Curriculum Vitae

Educational Background

Degree YearInstitution and Major Field of

Country StudyPh.D. 1994 University of California, San Diego ChemistryBSc. 1983 Yonsei Univ., Seoul Chemistry

Professional Experience

Period Organization Position

2007. 5~presentSmall and Medium

DirectorBusiness Administration

2005.10~2007. 5 Headquarters of Daedeok Innopolis Director

1996. 8~2005.10Korea Institute of Geology and

DirectorMineral Resources

1995. 3~1996. 8Korea Research Institute of

S. ResearcherStandards & Science

1994. 4~1994.12 University of California, San Diego Post-Doc.1989. 9~1994. 4 University of California, San Diego TA/RA1984. 2~1986. 3 AeKyung Ltd. Researcher1982.12~1984. 2 Julia Cosmetics, Ltd. Researcher

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fairs and SME CEO forums.

Of particular note, we published the “Success StoryBook,” which has proven effective in building a climate ofreliability and facilitating communication.

SME e-Business Cooperation

This initiative is designed to establish a round-the-clocke-business platform via the mutual linkage of SMEinformation and knowledge networks in the region.

Specifically, we have linked GobizKorea and China’secommerce platform. This marriage of e-market portals isexpected to create various new opportunities, expandingborderless trade through online overseas marketing.

SME Innovation Consulting

This program aims to generate common benefits forKorean enterprises that have advanced into other APECmarkets and their local cooperating enterprises.

This model is associated with our basic concept ofmarket adaptation.

For example, in the era of glocalization (a compoundword formed from globalization and localization), it isnecessary to better understand the culture, traditions,environment, etc. of the market in which our businessesare operating. Korean enterprises operating in a specificforeign market should be regarded as not only Koreanbut also a contributing member of the host economy.

Korean-led SME consulting programs are at presentconducted in the Philippines, Indonesia, China, Vietnamand other markets. We plan to publish progress reportsand a success story book on the results and achievementsof the innovation consulting program in the near future.

Korean Suggestions for a Regional SME Alliance inpursuit of inclusive growth

I would like to reiterate SMBA Administrator Hong Suk-Woo's three suggestions presented in the SME ministerialMeeting on Oct. 15 in Singapore as follows:

Realign the issue of market accessibility to incorporatethe concepts of market availability and marketadaptability

Establish an APEC-wide e-marketplace, andCreate an APEC SME cooperation system focused onthe area of green energy.

To enhance market accessibility, APEC should accelerateits drive for free and open trade, developing andimplementing measures to eliminate trade barriers.

To promote market availability, I think, it is necessary topursue new opportunities uncovered in the wake of theeconomic crisis. The tools for this effort would encompassan e-marketplace alliance, business matching efforts, etc.

Market adaptability is critical to facilitatingcommunication, overcoming such barriers as culture,language, traditions and environment, and ultimatelyrealizing ubiquitous “5 any” communication -- anytime,anywhere, any device, any network, any service -- withinthe global village. We should innovate, we should initiateand we should be united.

An APEC-wide e-marketplace would create a newsilkroad for member economies, broadeningopportunities for businesses, investors and consumersalike. But to make this happen, related regulations andsystems in each economy have to be addressed in detail.

Establishing an APEC SME cooperation system in thegreen energy field is a pre-requisite to a brighter, moresustainable future. It is our generation’s duty to the nextgeneration.

Climate change and sustainable growth are flamingissues around the world today. Our proposal is designedto catch three birds with one stone. -- mitigate climatechange, create new business opportunities and enhancethe quality of life of all peoples in the APEC region.

Feature Story


Korea, along with the United States andPeru, has been picked as a championeconomy in the SME innovation area,according to a joint statement of the 200916th APEC Small & Medium EnterprisesMinistrial Meeting held in Singapore Oct. 8-9.

Commending Korea for the initiativesundertaken by the APEC SME InnovationCenter in facilitating SME innovation in theregion, APEC SME ministers recognized theimportance of the Daegu Initiative andsupported the need for a self-assessment ofmembers' innovation activities to providebest practice examples for the DaeguInitiative.

Ministers noted the relevance of theDaegu Initiative to the innovation priorityarea of the Strategic Plan.

In this regard, ministers acknowledge that

co-champions Korea, Peru and the UnitedStates, in working jointly to review and planfor future initiatives, would achieve moreeffective outcomes for SMEs in membereconomies. And this will serve as the basisfor determining whether to pursue asecond cycle of the initiative. The movefollowed Korea's presentation of a proposalat the SMEWG Oct. 5-6, calling fororganizing a Daegu Initiative ReviewCommittee as the next SMEWG action.

Furthermore, ministers commended "SMEInnovation Seminar on Innovation in SMEFinancing and Marketing" as an initiative tohelp position SMEs for growth after thecrisis.

The APEC SME Innovation Seminar waspart of the report on APEC-supportedprojects unveiled at the 29th Meeting ofthe APEC SMEWG, which took place Oct.

Daegu Initiative Assessment & 3 Champions

APEC ministers noted

the relevance of the

Daegu Initiative to the

innovation priority

area of the Strategic

Plan.

Feature Story


5-6 in Singapore. The seriesof APEC meetings this yearfocused on “Inclusive &Sustainable” SME growth.Innovation was a coreelement of the forward-looking program. Innovationwas also consistent with thisyear’s APEC Ministers’Meeing theme, “HelpingSMEs to Access GlobalMarkets and to OvercomeTrade Barriers.”

Below are the highlights of the priorities and actionprogram of the strategic plan (2009~2012) that the APECSME Working Group has developed under six priority areas.

Business Environment

Actions in this area are focused on facilitating the easeof doing business by improving the legal and regulatoryframework and by promoting cost efficiency anduncomplicated and transparent administrativeprocedures. These efforts would help foster a moreconducive environment for businesses, particularly SMEs,to thrive and grow.

Best practice seminars targeted at SMEs have beenconducted, covering areas like starting a business,licensing, taxation and trading across borders. These arepart of a capacity building series that will also cover otherindicators used by the World Bank to measure the Ease ofDoing Business in various economies.

Management Capability and Entrepreneurship

This priority aims to improve the information andguidance available to business owners. It also seeks toincrease opportunities for entrepreneurs to learn newskills and to start new businesses. A key feature of'Inclusive Growth' is the emphasis placed onemployment. Gainful employment is a more productiveoption than providing support, as it leads to moreincome and demand and helps to build human capital.As SMEs are a major source of employment,

development of management and entrepreneurial talentswill contribute to job creation and sustainable growth.

Market Access and Internationalization

APEC has long been promoting liberalization in tradeand investment. But more can be done to increase accessto information on market opportunities both within andoutside the APEC region, and to enhance skills in marketaccess and development. Members can also worktogether to identify and address trade barriers that curbSMEs' access to global markets.

Towards this end, two projects are being undertaken tohelp SMEs that are looking to expand overseas but facedifficulties in understanding their target markets andexport requirements. The first project is the APECBusiness Fellowship, which will provide the framework forin-market executive training programmes to exposeAPEC SMEs to business practices and networkingopportunities in target markets.

The second project is a Study on Export TechnicalAssistance Models, which will be undertaken by theCommittee for Trade and Investment's Sub-Committeeon Standards and Conformance. It will provide insightsinto best practices among APEC economies in providingadvisory services in export technical regulations andassistance to companies.

Innovation

Innovation and technology are key enablers ofdevelopment, yielding significant productivity increases

Feature Story


that drive growth. For SMEs, innovation and adoption ofnew technologies give them a leg-up and help to levelthe playing field with large competitors. Often, SMEsthemselves are also sources of innovation.

In APEC, much has been achieved under various initiativesdriven by several economies over the past years. Theseinclude the SME Innovation Centre set up to facilitateinnovation among SMEs, and seminars on TechnologyInnovation and Technology Entrepreneurs to educate andpromote innovation and adoption of emerging tools likeInformation and Communication Technologies (ICT) as akey competitive advantage for SMEs.

Financing

As with all businesses, SMEs need financing to fuel theirgrowth. Increasing awareness and availability of financingto SMEs is, therefore, critical. APEC seminars such as theEase of Doing Business Seminar on Access to Credit havehelped by highlighting best practices for developinggovernment policies and programmes that encouragefinancial institutions to provide credit to SMEs, and bybuilding SMEs' capacity to access financing.

Sustainable Business Practices

Any discussion of 'Inclusive Growth' will focus onensuring the sustainability of growth. Often, the pursuitof economic development impacts both environmentaland social sustainability. Therefore, for sustainablegrowth, economic development needs to be balancedwith environmental and social sustainability. For example,to address the impact of industry on the environment,enterprises could adopt business practices that will limit,or even reduce, the amount of greenhouse gas emissions.

A more pressing issue is rising inequalities, leading toincreasing concerns that the benefits of growth have notbeen equally shared. Persisting inequalities - both incomeand non-income, such as access to healthcare andeducation - could lead to social and political tensions.This could undermine social cohesiveness and stallreforms, resulting in lower growth and higherinequalities. For the growth process itself to besustainable, policies and practices will, therefore, have toaddress not only reducing poverty but also improving theliving standards of a much larger group.

Agreed Priorities and Actions to Implement the Mission 2009-2012

Action: Facilitate market access for SMEs and MEs.B. Priority: Building Management Capability and Promoting EntrepreneurshipAction: Improve information and guidance available to business owners.Action: Increase opportunities for business owners to learn new skills.Action: Encourage more business start-ups.C. Priority: Market Access and InternationalizationAction: Increase access to information on market opportunities.Action: Enhance market development and promotion skills.Action: Identify and work to address barriers to SMEs' and MEs°∆®™ full participation in international trade/markets within

the APEC region.D. Priority: InnovationAction: Identify factors to accelerate innovation, including awareness and utilization of Intellectual Property Rights (IPR).Action: Promote innovation as a key competitive advantage for SMEs and MEs.Action: Educate and facilitate SMEs°∆®™ and MEs°∆®™ awareness, adoption and dissemination of emerging technologies,

including Information and Communication Technology (ICT).E. Priority: FinancingAction: Increase awareness and availability of wide-ranging sources of financing, from microfinance to venture capital.Action: Encourage banks and financial institutions to develop policies that assist SMEs and MEs to access appropriate finance

on mutually acceptable terms.F. Priority: Raise awareness of Sustainable Business PracticesAction: Empower SMEs and MEs to recognize the value of and take advantage of the business opportunities provided by

sustainable business environment.Action: To promote sharing of sustainable business practices that would improve SME and ME development and growth.

Best Practices


'Green Factory' - SME Exit Strategyin Green Growth Era

The Korean government is stronglypromoting a low-carbon, green growthpolicy that minimizes use of resources andenvironmental pollution while utilizing it asan engine for economic growth.

Green growth is a new paradigm that wassuggested to maximize environmental andeconomic synergy effects by responding toenergy and environmental problems, theincreasing mandatory climate changeburden, high oil prices, exploitation ofenvironmental markets, etc., with economicpolices.

The green paradigm transition erarequires SME manufacturing processinnovation that coincides with low-carbongreen growth, i.e. ‘Green Factory’management.

‘Green Factory’ means an low-carboneconomic era-type facility equipped witheco-friendly design and manufacturingprocesses that efficiently improvegreenhouse gas emission, environmentalpollution and energy consumption.

In other words, ‘Green Factory’ is green-izing process, green-izng workplace andgreen-izing product.

First, green-ization improves themanufacturing process efficiently andreduces consumption of energy andresources. Second, it also pursues highefficiency in all areas of the manufacturingworkplace, installing solar cells on thefactory roof, replacing motors with 3-phaseinduction motors and fluorescent lampswith LED lamps, etc. Third, it improvesproduct design in a way that uses less

energy when producing and using theproducts, develops products with a longerlife span, and facilitates recycling of after-use waste materials.

SMEs, viewed from a green growthperspective, despite being small in scale, areequipped with a centralized power-typeorganizational structure. So, managerinfluence is greater and employeeparticipation in low-carbon, green growth isstronger compared with large enterprises,assuming that communication is smooth.

As for the SMEs that have organicrelationships with large enterprises, theiractive utilization of SCM would facilitatetheir acquisition of new technologies as wellas introduction and establishment of agreen management system. Furthermore,as several such companies are collocated ina particular area (industrial complex, etc.),cooperaton and strategic alliances betweenenterprises become easier.

Also from an environmental perspective, iftheir small corporate scale andcomparatively simple production facilities

In order for SMEs to

develop the necessary

competitiveness in the

paradigm transition,

they must be made

aware of the potential

and benefits of ‘Green

Factory’ management.

Best Practices


are taken into account and the wastes minimizationprograms practiced in the United States, U.K. andNetherlands are applied, SMEs can more easily pursuetechnological alternatives and secure profit-creatingopportunities as well as reduction of wastes.

Furthermore, in the green growth era, SMEs shouldactively respond to changes in competition conditions.

Due to the characteristics of the green industry, first,dynamic SMEs should pursue a rapid market advance.Second, SMEs should exert utmost efforts fordevelopment of core technologies, narrow thetechnological gap with advanced countries andaccelerate localization of parts. Third, SMEs must secureoverseas source technologies and patents and resolvetechnical barriers.

Fourth, SMEs should secure and nurture excellentmanpower through industry-academia-research institutecooperation in line with the green growth era whendevelopment of excellent manpower is more importantthan ever before. Fifth, SMEs have to advance into theworld, which has already grown into a large, singlemarket, to secure new outlets for their products and

services.

Unlike other growth paradigms, low-carbon, greengrowth will not develop by itself in response to themarket. Therefore, the government should supportdiverse policies, including designation and cultivation ofgreen-specialized research institutes, cultivation of greentechnology design centers, supply and technologydevelopment of green facilities and equipment, supportfor global green partnerships, support for greentechnology information development and exchanges andcultivation of green production and environmentalmanpower.

To grow green SMEs equipped with globalcompetitiveness, the government should also establishlong-term goals and, in parallel, continuously implementcomplementary revisions to processes to achieve thegoals.

In order for SMEs to develop the necessarycompetitiveness in the paradigm transition, they must bemade aware of the potential and benefits of low-carbon,green growth and management in a low-carboneconomy, i.e. 'Green Factory' management. (Kiopnara)

SMBA has identified and announced 117 'SME-typePromising Green Technologies' as a first step tonurture green-specialized SMEs that will assumeproduction of core pars and materials and R&D in thegreen industry f ield. The green technologiesforwarded this time were established after havingundergone a six-month discussion process by expertsfrom industry, academia and research institutes,including the Korea Institute of Science andTechnology Information (KISTI).

Based on the nation’s existing overall ‘GreenTechnology Roadmap,’ SMBA suggested the 117technologies that encompass eight industrial fieldsand 50 strategic products requiring a growth strategyfocused on short-term commercialization potential,etc. from the perspective of SMEs. SMBA pursued

identification of the promising green technologies aspart of its medium and long-term R&D supportstrategy to single out and grow green industry-specialized SMEs that have secured key technologicalpower, the core of its SME green growthdissemination initiative.

When converting domestic green industries intogrowth engines, it a prerequisite to cultivate domestictechnologies that can replace imports of core parsand materials to support the technologicalcompetitiveness of green products. In reality, however,the environment for green SMEs is still weak.

Therefore, the latest promising green technologyinformation by field is expected to enhance SMEs'understanding of green technologies as well as their

117 SME-type Promising Green Techs

Best Practices


strategic green technology planning capability so asto accelerate development of high value-addedgreen technologies.

In the case of photovoltaic and wind power, inparticular, although these are representative fields ofthe new & renewable energy industry, the core ofgreen industries, the nation's dependence ofimported key parts and materials is high andparticipation by SMEs is weak. But based on the 'SME-type promising green technologies' program, SMBAplans to grow technology-intensive SMEs that havesecured core technologies and to enhance theirglobal competitiveness.

SMBA identified the SME-type Promising GreenTechnologies based on an analysis of data from other

ministries, research institutes and specialistenterprises, while taking into consideration thecharacteristics of the SMEs in terms of R&Dinvestment scale, R&D stage, existence of basictechnologies, commercialization potential, etc.

The SMBA move followed the Ministry ofKnowledge announcement that the nation wouldinvest a total of 3 trillion won(US$ 2.7 billion) overthe next give years to develop green technologies innine areas including solar cells and light-emittingdiodes.

The green energy development strategy consists offour core fields -- nurturing nine new growth-engines,development of market-oriented energy technologies,support for market creation and fostering thenecessary infrastructures.

In consideration of marketability, technologicalviability and urgency, the government plans to selectand nurture nine areas as national growth engines.

Under the plan, the government intends to convertfour fields -- Photovoltaic, Wind Power, LED andElectric IT, with rapidly growing global markets andhighly developed related domestic industries, intogrowth engines with priority. It also decided tointensively support five additional fields -- IGCC, CCS,Energy Storage, GTL/Ctl and Hydrogen Fuel Cell, for

SME-type Promising Green Technologies (Unit: No. of Technologies)

FieldIndustry Strategic

TechnologiesGroup ProductsNew & Photovoltaic Power

7 15Renewable GenerationEnergy Wind Power Generation 11 24

Bio Energy 6 7Energy Next-Generation

6 14Efficiency Lighting (LED) Enhancement Heat Pump 6 12

Green IT 4 18Environment- Waste to Energy 5 14friendly Recycling of Wastes 5 13

Total 8 50 117

(Continued on p18)

Best Practices


Taiwan - New Rising Star in WorldLED Industry

The LED market is growing at a rapidpace with expansion of application areasfollowing continuous declines in productprices. In fact, the global LED marketexceeded seven trillion won in 2007 andsurpassed eight trillion won in 2008.Furthermore, the market is expected togrow 14.2% on annual average to a 12trillion-won scale by 2011.

Under these circumstances, Japan, whichis cited as a strong LED source technologynation, has the largest influence on sourcetechnologies in the global market,centering on Nichia and Toyoda Gosei.Nichia has secured 200 patents in Japanand more than 10% of the world's patentsfor GaN LED, while ranking first in theglobal GaN LED and LD businesscommunities.

On the other hand, the world’s largestLED chip producer is Taiwan’s Epistar. Thiscompany is growing rapidly, increasing itsLED market share in the world as well as inKorea.

With LED chip and packaging demand, inparticular, increasing explosively of late withLED BLU as the start, in addition to Epistar,Taiwan's Formosa Epitaxy, Everlight, andothers are making inroads into the worldmarket aggressively based on theirtechnological prowess. Referring to thisphenomenon, experts are paying keenattention to the growth of Taiwanese LEDcompanies, even calling them ‘LED’s NewDetonator.’

Taiwan’s LED industry ranks world’s first inproduction volume and second inproduction amount. In 2008, Taiwan's LEDindustry grew 13% year-on-year to about60.9 billion Taiwan dollars (about 2.19trillion won). Due to the economicrecession in 2009, the industry slowedslightly, growing 7% year-on-year, but itsindustrial scale is expected to reach 65.4billion Taiwan dollars (about 2.35 trillionwon).

In fact, Taiwan’s LED industry is buildingon a history of about 30 years with theestablishment of the country’s first LEDpackaging firm, Lite-On Technology, in1975 as the start. Although its self-supply isinsufficient in the LED-related raw materials

A key feature of

Taiwan’s LED

industry is that starting

with the final process,

packaging, it is

expanding to the

upstream wafer sector

and becoming larger

in scale.

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field, phosphors, organic metals, silicon for packaging,etc.. the nation’s LED industry chain in other fields is quitestrong.

At present, the product supply ratio of Taiwanesecompanies in China’s LED lighting market is about 50%.By participating in ‘China’s 10,000 Lightings Project for10 Cities,’ from LED materials to complete product OEMfields, the ratio of Taiwanese LED firms among China’stotal LED transactions is expected to reach 50~60%.

With the items expected to be ordered by China fromTaiwan in the future such as epitaxy, LED chips, LEDpacking, lighting control equipment, lighting systemsand cooler related parts, China's purchase of Taiwaneseproducts in 2009 is projected to reach 15~20 billionTaiwan dollars.

A key feature of Taiwan’s LED industry is that startingwith the final process, packaging, it is expanding to the

upstream wafer sector and becoming larger in scale.Kingbright, Lite-On and Everlight started out in thepacking business in the 1980s and advancedcontinuously into the wafer manufacturing sector overthe past 10 years, establishing a more complete verticalintegration model than Japanese or Korean companies.

In particular since 2004, Taiwan has actively pursuedM&As and increased competitiveness with restructuringof businesses centering on three large enterprises -Epistar, Arima Optoelectronics and Formosa Epitaxy.

Furthermore, Taiwan’s display firms are directly andindirectly participating in key fields of LED, which hasemerged as a future core part in notebook PCs and LCDTVs. Leading this trend, AU and CMO have expandedbridgeheads through establishment of subsidiarycompanies or equity participation in the LED industry.Taiwan's manufacturing outsourcing firm, Hon Hai, alsoholds equity in AOT, etc. (Kiopnara)

which securing of a comparative technologicaladvantage is urgently required due to the highpotential in global markets.

The government and private sector will jointly investa total of three trillion won (government: 1.7 trillionwon, private: 1.3 trillion won) in the nine fields overthe next five years with the goal of securing advancedcountry-level technological prowess.

To achieve this, the government decided toestablish technology development goals by field andprepare a 'Mid- and Long-Term Green EnergyTechnology Development Strategy and Roadmap' byMarch next year.

The government plans to achieve its establishedgoals by field. For example, in the solar energy area, itintends to secure fossil fuel-level economic viability by2020, and for hydrogen fuel cells, it aims to developmass production technology for kW-class household-use cells by 2015.

Taking into consideration the existing technologicallevel by field, in particular, the government decidedto promote efficient technology acquisition methodswith such strategies as 'independent development.''technical alliance & joint research,' 'inducement oftechnology' and 'foreign investment.'

117 SME-type Promising Green Techs

(Continued from p16)

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Pioneer of Vertical Axis-type WindTurbines

Cygnus Power Co.

Located in the Industry-AcademiaCooperation Building of Jeonnam NationalUniversity, Cygnuspower Co. is a uniquecompany specializing in wind powergeneration in the Gwangju-Jeonnamregion.

The person who motivated CEO YoonYang-Il was his teacher, Prof. NoguchiTsuneo (currently technology advisor toCygnuspower) of Nihon University in Japan.When Prof. Tsuneo visited the Jeonnamregion to attend a seminar, CEO Yoon metthe professor by chance. This encounterbecame an opportunity for CEO Yoon toobtain the rights to introduce the verticalaxis wind power generating system held bythe professor after completion ofdevelopment and patent registration and tosupply the system in Korea.

CEO Yoon said, “Our ‘Sygnus Mill’ - anurban-type wind power generator (verticalaxis wind turbine) - is a dramatic productthat operates even in a gentle breeze of1m/sec. As it has almost no noise orvibration and generation is possible also inopen areas. I think that our product isequipped with competitiveness comparedwith those of other companies. Please waitand see. We will raise a new wind in thedomestic market.”

Regarding his urban-type windgenerators, CEO Yoon beamed with strongtenacity and self-confidence. ‘Cygnus Mill’has excellent functions because it wasdeveloped originally by Prof. Tsuneoapplying the principle of an airplane wing.Since parts of its blades are folded, theproduct has the characteristic of a pressureincrease effect from which even direction

the wind blows. Owing to this, it cangenerate electricity even with a weak1m/sec wind.

By filing a patent application for thistechnology in Korea last October,Sygnuspower has prepared for independentproduction. It is easy to install in anylocation where there is wind, rooftops orbackgrounds, as well as flatlands. Thecompany's hybrid solar-wind powergenerators also can store and utilize theenergy produced simultaneously by thewind mill and solar panels.

In fact, Sygnuspower developed andexhibited its hybrid-type generating system(CMH-200) at the ‘9th SME TechnologyInnovation Contest’ held in June this yearand obtained a good response andappraisals. This system features fewer ofrotations and has less noise and vibration

CEO Yoon Yan-Il: “Our ‘Sygnus Mill’ is adramatic product thatoperates even in a gentlebreeze of 1m/sec. As ithas almost no noise orvibration and generationis possible also in openareas.”

Best Practices


than horizontal axis wind generators, so its applicationsare versatile as a power source for mobile communicationbase stations in addition to street lamps, security lampsand emergency lights.

Compared with the domestic situation, the interest inSignuspower from abroad is far greater.

In June this year, Sygnuspower concluded an NDA(Non-Disclosure Agreement) and an MOU on consultingsupport with Eurolite Technologies Pte. Ltd. in Singaporefor a large-scale project equivalent to about three billionwon. As Eurolight Technologies, in particular, is a publicenterprise that supplies construction materials and solarlighting fixtures to the Singapore government, the NDAand MOU are of great significance.

An inspection group from the company visitedSygnuspower in mid-August, purchased samples andinstalled Sygnus Mill products at designated places. Nowwith the company proceeding with technical tests,Sygnuspower is likely to promote exports in full swing.

Furthermore, other countries that have requested dataand examined them include Indonesia, Thailand andMalaysia. At the earliest, Sygnuspower is expected to signcontracts amounting to US$10 million or at least US$2~3

million for samples within the next year.

In Tokyo, Japan, more than 50 Sygnus Mills are beinginstalled. Samples are also being installed in Cambodiafor school lighting and in Micronesia in the Pacific for useat mobile communication base stations and parks.Sygnuspower has completed model installation of SygnusMill in the Republic of South Africa for communicationrelay as well. Therefore, the company's potential foradvance into the global market seems very bright.

SMEIC News


2009 APEC SME InnovationSeminar Held in Seoul

Hosted by the Small andMedium BusinessAdminstration (SMBA) and theAPEC SME Innovation Centerof the Small & mediumBusiness Corporation (SBC),the '2009 APEC SMEInnovation Seminar' was heldAugust 25~28 at the COEXInterContinental Hotel inSeoul.

The main objective of the four-day APECSME innovation seminar was the sharing ofinformation, including APEC membergovernments' SME support policies toovercome the ongoing global economiccrisis.

High-level government officials of 21APEC member nations in charge of SMEpolicy and experts in the SME field,including I. Wayan Dipta, Advisor, TheOffice of State Minister for Cooperation andSME, Indonesia, participated in the seminarheld under the theme 'Innovation in SMEFinancing and Marketing.

The seminar program was composed of a

keynote speech on survival strategies forSMEs in the global economic crisis,presentations on SME innovation-relatedpolicies and practices, a lecture on theassessment framework for the DaeguInitiative on SME IAPs, etc.

On the last day, in particular, anetworking roundtable meeting took placeto discuss opportunities for mutualcooperation among the seminarrepresentatives of respective countries,Peruvian Ambassador to Korea MarcelaLopez Bravo, commercial attaches of APECmember nations, and CEOs andrepresentatives of Korean SMEs and SME-related organizations.

SME Innovation Consulting in Indonesia & ChinaAPEC SME Innovation Center provided

SME Innovation Consulting in Indonesia& China Nov. 23-29.

The field projects, managed by specialistgroup from the Small & medium BusinessCorporation(SBC) featured on-the-spotdiagnosis, solution suggestion, one-pointlesson, etc.

The beneficiaries of the consultingprogram were five Indonesian SMEs andKorean SMEs operating in Indonesia andsix Korean companies doing business inChina.

The APEC innovation consulting wasalso conducted for three Philippinescompanies in September.

SMEIC News


SBC Holds 4th East Asia SMERoundtable Meeting

The Small & medium Business Corporation (SBC) plansheld the '4th East Asia SME Roundtable Meeting' onAugust 27 at the Lotte Hotel in Seoul to invigorateinformation exchange and cooperation among the SMEsupporting organizations of major East Asian countries.

This roundtable meeting in Seoul was the fourth editionfollowing the first meeting held in May 2007 in Tokyo,Japan, the second meeting in Bangkok, Thailand, and thethird in Kuala Lumpur, Malaysia.

SBC President Lee Ki-Woo presided over the meetingwith the participation of Chairman Masahiro Maeda ofSMRJ (Organization for Small and Medium Enterprisesand Regional Innovation, Japan); CEO Hafsah Hashim ofSMIDEC (Small & Medium Industries DevelopmentCorporation), Malaysia; Deputy Administrator NguyenTrong Hieu of ASMED (Agency for SME Development),Vietnam; and Director General Wimonkan Kosumas ofOSMEP (Office of SMEs Promotions), Thailand, as countryrepresentatives.

The Seoul meeting was designed to exchangeinformation on policies to overcome the current globaleconomic crisis and SME support policies of the

participating countries under the present environment.

The representatives of respective countries shared ideason opportunities to support SMEs and SME developmentdirections amid the economic crisis throughpresentations on the theme 'SME Support Policies Underthe Global Economic Crisis' in Session I.

In Session II, Chairman of the meeting, SBC PresidentLee Ki-Woo, suggested ‘Specific Cooperation Methods byOrganization and Future Schedule’ and therepresentatives discussed opportunities to induce realisticcooperation achievements in the future through freediscussions.

Thai Industry Minister and BOI Secretary General Visit SBCOn July 3, President Lee Ki-Woo of Small & medium

Business Corporation (SBC) received a courtesy callfrom a Thai delegation led by Minister of IndustryChanchai Chairungruang and BOI (Board ofInvestment) Secretary General Dr. Atchaka Brimble.

At the get-together, SBC President Lee discussed withthe Thai delegation opportunities for industrialcooperation between SMEs of the two countries andsupport for advance of Korean SMEs into Thailandthrough opening of the Thai BOI's Seoul Office.

As Korea's investment in Thailand has increasedsteadily, Thailand's BOI, a government agency underthe Thai Ministry of Industry, opened its Seoul Office

officially on July 2, bringing the total number of itsoverseas offices to nine, and also held an investmentenvironment explanatory session at the Lotte Hotel onthe theme 'Thailand Means Business.'

SMEIC News


Technology Cooperation Seminars With Russia, CIS SBC held 'Technology Cooperation Seminar With

Russia and CIS' on December 1 at the Best WesternHotel in Seoul and on December 3 at the InternationalHotel in Changwon. At the seminars, SBC introducedexcellent technologies of St. Petersburg StatePolytechnic University of Russia, the Siberian Branch ofRussian Academy of Sciences (SB RAS), and theNational Center for Technology Transfer of Belarus andexplained technology cooperation promotionmethods.

Domestic SMEs interested in technology transfer fromRussia and CIS countries obtained beneficialinformation from the seminars. For advancement oftechnologies and enhancement of the technologicalprowess of domestic SMEs, since the establishment of atechnology cooperation center in Novosibirsk, themecca of Russian science and technology, in 2006, SBC

has been providing and mediating Russia's excellenttechnologies and supporting identification of technicalexperts.

SBC plans to expand its support operation from St.Petersburg, Russia, and Belarus to all CIS countries,including the Ukraine and Kazakhstan.

Korea-Japan Business Match-Making Session

The Small & medium Business Corporation (SBC)dispatched Korean SMEs to the 'Korea-Japan BusinessMatch-Making Session' held on July 2 at the ShinagawaPrince Hotel in Tokyo.

A total of 144 representatives from 104 SMEs fromKorea and Japan participated in the match-makingsession and harvested 157 cases of business talks, whichare expected to lead to conclusion of about US$50million worth of contracts.

SBC screened 25 Korean SMEs from the 43 that hadundergone its first documentary examination after a fact-finding investigation and collection of opinions from localadvisors in Japan. Due to individual company situations,etc., however, 25 SMEs were finally selected andparticipated in the session.

During the event, which was promoted as part of aKorea-Japan SME cooperation project, the participatingKorean SMEs realized business discussions with morethan 100 Japanese companies owing to cooperation from

related Japanese organizations, such as the Small andMedium Enterprise Agency (SMEA), Organization forSmall and Medium Enterprises and Regional Innovation(SMRJ), Chamber of Commerce and Industry and JapanExternal Trade Organization (JETRO).

SBC plans to continue to follow-up with those SMEsthat participated in the session and to actively supportthem through implementation of a fact-finding survey tocheck the progress in detail by company and to identifyrequired support.

apec sme · 2010. 2. 22. · column apec sme 4 innovation briefing ‘let’s actively utilize...

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