The growth and success of medium-sized companies is critical not only for the nation’s sustainable growth, but also for high-quality job creation for the youth, a business leader said last week.

“In 2014, there were about 3,800 Korean companies categorized as midsized companies. They accounted for only 0.12 percent of registered Korean companies, but their contribution to the supply of quality jobs reached up to 10 percent,” said Kang Ho-gap, chairman of the Association of High Potential Enterprises of Korea.

Kang, who has contributed to the establishment of the business association for midsized players, made these remarks during a press conference to mark the first anniversary of the organization.

“Data shows that a solution to youth joblessness is to increase the number of midsized firms,” said Kang, who also leads Shin Young, an auto parts maker. Youth unemployment has long been cited as one of the most serious issues hindering the growth of the Korean economy.

The association debuted as the official representative body of medium-sized Korean companies a year ago, following the effectiveness of the “Mid-Size Enterprise Special Law.” The law was enacted to support the continued growth of a new breed of enterprises stuck between small enterprises and conglomerates.

Despite the law, many midsized firms still have the so-called “Peter Pan syndrome,” not being proactive for further growth to take advantage of benefits offered only to small companies.

“The policymakers need to pay more attention to the difficulties that midsized companies can face after graduating from a small firm status,” Kang said.

For the past year, the association has dedicated itself to attracting more members while doing a study on measures to help them advance to become globally competitive enterprises.

One such measure is to expand the scope of inheritance tax deductions for family business succession, but the association failed to convince policymakers.

“Similar to conglomerates, generational power transfer is one of the most imminent issues for midsized companies, and policymakers need to benchmark overseas cases regarding the succession planning of family businesses,” Kang said.

For the continued growth and success of midsized firms in Korea, the chairman said the association will capitalize on projects to raise global competiveness of its member firms.

“I believe the Korean economy can continue to seek growth if it has more globally competitive midsized firms, while (being) less dependent on conglomerates like Samsung and Hyundai,” Kang said.

By Seo Jee-yeon (jyseo@heraldcorp.com)