More than 400 heads of small and midsize enterprises gathered on the 24th for the Small and Midsize Enterprise Leaders Forum. Launched in 2007, the Small and Midsize Enterprise Leaders Forum is the largest economic forum in the country, presenting management strategies and future visions for small and midsize enterprises such as regulatory reform. This year, in particular, interest ran high among small and midsize businesspeople seeking to capture both survival and growth in a rapidly changing domestic and external environment.
At the forum, expansion into the U.S. market clearly emerged as a hot topic. Domestic corporations are turning their eyes to the United States for revenue growth potential and to enhance global brand value.
To underscore the importance of the market, Netflix's content "K-pop Demon Hunters" was also mentioned. Although it was not produced by domestic corporations, "K-pop Demon Hunters," made on the basis of the domestic content K-pop, achieved great success. Its popularity in the United States became a springboard for global attention.
But there are no shortage of hurdles to clear. Differences in laws, systems, and culture make it difficult for small and midsize enterprises to break in. A small and midsize enterprise head met at the forum, identified as A, said, "I heard that in the United States there are provisions banning office romance because there are cases where a man and a woman working at the same company date, break up, and then sue each other."
Kang Dong-han, head of Hanho Industry, which succeeded in entering the U.S. with auto accessories and other products, said, "The United States is a good market where you can make a lot of money," but also noted, "Labor and tax laws differ by state in the United States," expressing difficulties. The point is that differing laws require high legal expense and time.
Here, "demons" appeared again. Banney Lee, head of Hanmi Bank, began by saying, "In finance, the demon is in the details." Lee said, "In actual operations, there can be waste because the banking systems of Korea and the United States differ in detailed institutional sectors," and advised, "The United States calls small and midsize enterprises the 'backbone' and provides a lot of support, so you need to localize quickly." The point is not to overlook small parts and to equip the right mindset and systems for the local environment.
AI transition was also discussed as a core topic at the forum. While there is agreement that everyone should transition to AI, they are hesitant to offer ready answers to the question of "how."
Of the 160,000 domestic manufacturing plants, only 0.6% are smart factories that have adopted AI. Adopting AI can help reduce defect rates, meet delivery deadlines, and boost sales, but access is not easy.
The head of a manufacturing small and midsize enterprise, identified as B, said, "It feels like the demon has given us the answers—U.S. expansion or AI transition—without telling us the steps to get there," and added, "Beyond the expense, we worry about where to start and whether investing in AI will deliver results as expected."
Minister Han Seong-suk of the Ministry of SMEs and Startups, after finishing a lecture the previous day, said, "What seems important is the will to just try," and cited the case of Dong-A Plating, a root small and midsize enterprise in Busan. Dong-A Plating is a corporation with fewer than 30 people.
Lee O-seon, head of Dong-A Plating, saw that young job seekers avoid strenuous physical labor and, starting in 2018, focused on production automation using robots. The company invested more than 800 million won in automation robots. Considering that Dong-A Plating's annual sales are around 6 billion won, it spent a substantial sum.
The Minister remarked, "We should have Dong-A Plating give a lecture." The Minister explained, "Though not large in scale, the head made a decision and invested in AI, among other things," adding, "Workers in their 20s and 30s account for 80% of all employees, and productivity has increased."
The Ministry of SMEs and Startups has also set up a support framework to help manufacturing small and midsize enterprises adopt AI. Next year's related budget was increased by 207.3 billion won from this year to 455.2 billion won. The ministry also plans to take the lead in research and development (R&D) to find answers and share them with small and midsize enterprises. We will have to watch whether small and midsize enterprises make good use of this.