Korea to groom mid-sized firms

The government will support promising medium-sized enterprises with administrative, research and marketing support programs so they can become globally successful companies, officials said yesterday.

The Ministry of Knowledge Economy said the government aimed to create 300 globally competitive medium-sized companies by 2020, as part of its mid- and long-term plan.

President Lee Myung-bak promised that the government would do its best to help companies and create an environment that would help to develop new technologies, cut production costs, secure talented employees and tap new overseas markets, a Cheong Wa Dae spokesman said.

The government is also out to support the country`s mid-sized companies that have high potential to become conglomerates.

The ministry will thus set up the legal framework to support these promising companies.

"We will help them improve technological competitiveness by providing systematic assistance so they can introduce products in the market on their own."



The plan also entails providing tax breaks on research and development spending, helping companies secure loans, and offering information on special funding programs planned by state-run firms.

Businesses welcomed the idea saying the plan would help Asia`s fourth-largest economy dispel the imbalance of big conglomerates and SMEs.

"The government`s measures will help the country create globally competitive mid-sized companies and contribute in developing new growth engines," the Korea Chamber of Commerce and Industry said in a statement.

"They are also timely in that they can address our youth unemployment problem, as mid-sized companies create quality jobs," it added.

There has been criticism that the concentration of R&D projects and talented manpower have been concentrated in conglomerates, threatening sustainable economic development. Economists have warned that such imbalances further widened gaps between SMEs and the big firms.

Conglomerates that specialize in electronics, shipbuilding, automobiles, construction and steel have led the country`s economic growth since the 1970s. But they have failed to create jobs to maintain the flow of economic growth, experts say.

The government said it soon expects to unveil details of how much investment the government plans to inject and which companies will be chosen to receive support in the next few years.

The ministry will set up the legal framework to support these promising companies.

"We will help them improve technological competitiveness by providing systematic assistance so they can introduce products in the market on their own," ministry officials said.

(christory@heraldm.com)



By Cho Chung-un