This study attempts to suggest the way of win-win cooperation between local small and medium-sized enterprises (SMEs) and local Korean SMEs in the New Southern country. For this purpose, it first investigates the theoretical background, current their mutual relationship and cases of previous cooperation of major companies.
The motivation for this study started with the following observational motivations. First, Korean SMEs in the New Southern countries have been marginalized from the local government’s policy support. In general, SMEs in most countries face many difficulties compared to large enterprises. As a result, their governments carry out various policies to support them. They may give financial support or technical assistance. Governments of the New Southern countries are not exceptions. They manage many programs to support them. Despite this fact, Korean SMEs in the New Southern countries have a difficulty to receive them. Mainly, the governments of the New Southern countries recognize them not as their owns companies but as Korean companies.
Second, Korean SMEs in the New Southern countries are excluded from the support of the Korean government. Legally, they are locally registered companies and the promotion and development on Korean company are not an assignment of Korean government.
Third, Korean SMEs in the New Southern countries have been unable to utilize their opportunities to cooperate with local companies. For example, they may reduce their costs by procuring parts and raw materials from local companies or to create new customers by using local sales channels. They may get some advises during the labor dispute. Frankly, these activities are very limited.
This study, starting from these problems, presents a theoretical analysis and examines the recent activities of local SMEs as well as Korean SMEs in New Southern countries. Four countries of Indonesia, Thailand, Vietnam, and India of were selected as main analysis target countries. The economies, business environments, and the current activities and policies of SMEs of these countries were examined. It tells that the economies of these four countries are growing very rapidly, and their governments have been implementing various policies to revitalize their SMEs.
Meanwhile, in order to examine the status of Korean companies of these four countries, their business activities were examined by country and by industry. It shows several interesting facts. For example, the number of Korean companies in Vietnam has increased rapidly in recent years, while that of Thailand has been stagnant. It is shown that Korean companies in Indonesia and Vietnam are mainly in the labor-intensive industries such as clothing and textiles, whereas those in Thailand and India are centering on industry of electronic parts or automobile parts. It is because wages in Vietnam and Indonesia are still relatively low while per capita income and wages in Thailand have already reached a considerable level in 아세안. It was also interpreted that the reason SMEs entered India centered on the automobile and electronic parts industries was because they were partners of Samsung Electronics' factories near Delhi and Hyundai Motor's factories around Chennai.
It also checks the previous cases of the win-win cooperation relationship between foreign companies and local companies. Surprising, very little win-win cases were observed between local SMEs and Foreign SMEs. However, the win-win relationship between foreign global companies and local SMEs appeared in various forms. In other words, many foreign companies have provided various types of assistance to local SMEs such as management consulting or training for employees of local SMEs. It is because cooperation with local companies that provide raw materials and parts locally is essential for foreign companies to improve their productivity or their product quality. Also, they recognized that cooperation with local companies played a very important role to raise the local sales.
Based on these analyses, this study recognized the possibility of cooperation between Korean SMEs and local SMEs and suggested several policy measures. At this time, the role of the government was included because both Korean SMEs and local SMEs lack the financial and business capabilities to implement them. In other words, it is to suggest a method of promoting cooperation between Korean SMEs and local SMEs led by the government. Here are some of major conclusions.
First, several win-win cooperation models were presented. In this win-win cooperation model, Various organizations and agents such as local SMEs, local Korean SMEs, local central and regional governments, the Korean government and local embassies, public institutions of both countries such as KOTRA, Korean development cooperation organizations, SME promotion and consulting organizations, university research institutes, etc. will participate to carry out the policies and programs.
Second, major policies and programs include (1) a network establishment project between local Korean companies and local companies, (2) a local manpower capacity building program, and (3) a corporate consulting program etc. In the process of carrying out these, administrative tasks such as financing for win-win cooperation projects and selection of institutions in charge of win-win cooperation projects had to be resolved. In addition, some examples of win-win cooperation programs of Indonesia, Vietnam, Thailand, and India are presented. It should be reminded that all of these programs must be customized to be implemented in the New Southern Policy counties because their economic and culture environments are quite different. Finally, the principles and precautions to be observed by the government are presented