Fostering SMEs via Developing the Globally Competitive Human Capital -The Experience of Korea Ms. Christy Lee President & CEO Daewon Advisory Services

Fostering SMEs via Developing the Globally Competitive Human Capital Contents How Korea Made it? - Developing Globally Competitive Human Capital Fostering SMEs via Effective Training Key Lessons Learned & Implications to KSA Why Korea? Contents Fostering SMEs via Developing the Globally Competitive Human Capital Ms. Christy Lee

Why, on earth, KOREA? Aerial view of Seoul in 1950’s Aerial view of Seoul Today

Seoul during the Korean War Why Korea? Industrial Base was Totally Destroyed During the War 2. How Korea Made it? 3. Korean SMEs 4. Key Lessons Learned & Implications to KSA 1. Why Korea? Seoul during the Korean War - Korean War (1950 - 1953) Average annual growth rate during the war : -19% Amount of damage : US$ 5.5 billion Total Civilian Casualties: 2.5 Million

Over 500 times GDP growth, 300 times trade volume growth Why Korea? Over 500 times GDP growth, 300 times trade volume growth GDP Growth (Nominal) Trade Volume (KRW BN, 1USD=1100KRW) (USD MN) USD 1,007BN (2010) USD 900BN (2010) USD 3BN (1970) USD 2BN (1970) Peter Drucker, 『 Post-Capitalist Society 』 ‘Korea provides us a key example of an undeveloped nation without natural resources jumped into an industrial society, that we cannot discuss the history of 20th century economic development excluding Korea’s amazing economic development.’ (Source: www.investkorea.org) Copyright ⓒ Daewon Advisory Services, 2013

Small but Strong Economy Korea’s World-Class Products (2011)   Ship-building Memory Chip Lithium Battery Auto Steel World Rank 1 5 6 Market Share 48% 55% 40% 6% 5% Korean Companies Hyundai Heavy Ind., DSME Samsung, Hynix Samsung SDI, LG Chem Hyundai, KIA POSCO, Hyundai Steel Copyright ⓒ Daewon Advisory Services, 2013

How Korea Made it? H.E. Late President Park, Chung-Hee (1917 – 1979 ) Emphasis on patriotism and self-sacrifice Determined leadership by suggesting clear visions “My life for my country and for the people” Thrift 2. How Korea Made it? 3. Fostering SMEs 4. Key Lessons Learned & Implications to KSA 1. Why Korea? 박정희는 경제적으로 검소한 생활을 하였다고 한다. 넥타이, 만년필, 전기면도기 세 가지를 빼고는 모두 국산을 사용하였으며 국산 넥타이를 매면 마디가 잘 풀려서 상공부에 넥타이에 대한 특별지시까지 했으나 풀리지 않게 하는 납처리 기술을 로열티를 지불하고 도입할 처지가 못되어 결국 생전에 국산 넥타이를 마음껏 매보지 못했다고 한다. 미국 맥도널드사의 중역 데이빗 심슨이 월남전당시 청와대를 방문하여 M-16을 수입하기로 결정한데 대한 보답으로 100만 달러의 뇌물을 건냈으나 박정희는 거부하고 그 돈만큼의 소총을 더 달라고 말했다는 일화 데이빗 심슨은 "나는 그의 얼굴에서 한 나라의 대통령이 아닌 아버지의 모습을 보았다”고 회고했다고 한다. President of Korea 1963-1979 (16 yrs)

How Korea Made It? Instilling Pride & Honor • Promoting Engineers and Skilled Technicians • Promotion of Science & Technology – KIST, KAIST, Daeduck Science Park • Excelled in the Int’l Youth Skill Olympics - Korea Wins Gold Medal 17 times (1977-2011)

How Korea Made It? Close Partnership: Government & Private Sector Monthly Export Promotion Meeting Presided by the H.E. Late President Park, Chung-Hee

SAMSUNG GROUP Founder & Chairman: Lee, Byung Chul ( 1910 - 1987 ) “Samsung has clear standards when deciding a new business ; national needs, sympathy of Korean people and potential for global competitiveness. Considering this, we will develop a semiconductor business.” Samsung Group’s Opening of Shared IT system: 1974

Korean Education President Obama’s View on Korean Education “In the space of a little more than a generation, [South] Korea has developed one of the world’s best-educated workforces and fastest-growing economies.” "In South Korea, teachers are known as nation builders. I think it's time we treated our teachers with the same level of respect right here in the United States of America."

Small and Medium Enterprises Overview of Korean SME Organizations Guarantee agencies Affiliated government organization Financial Institution Provision of guarantee Management consulting Execution of SME policies Financial support Consulting & Training Financial support for Micro Enterprise Start up fund Start up consulting Training for Micro Enterprises Financial support Management consulting Investment of Venture capital Education Small and Medium Enterprises

Status of Korean SMEs “99-88” SMEs 1. Why Korea? 2. How Korea Made it? 3. Fostering SMEs 4. Key Lessons Learned & Implications to KSA 1. Why Korea?   Copyright ⓒ Daewon Advisory Services, 2013

Shared growth between Conglomerates and SMEs New Government’s Policy Goals for SME New Government’s Policy Goals for SME support Shared growth between Conglomerates and SMEs R&D Support for SME Procurement Fair opportunities for market entry http://news.mk.co.kr/newsRead.php?sc=&year=2012&no=856388

SEDA’s Training Programs for Micro – Enterprises Start-Up Academy Practical training for new start-ups & for youth entrepreneurs Management Improvement Training Training on management improvement to foster ability to cope with sudden changes. E-Learning Training Online courses on start-up, management, & case studies of successful businesses

SEDA’s Training Programs for Micro – Enterprises Innovation Academy ($7Mil support for 24,000 in 2013) Practical training for start-ups Training for those who want to switch the business to another business area Youth Entrepreneurs start-up in overseas

SEDA’s Training Programs for Micro – Enterprises Management Improvement Training ($7.8Mil for 53,000 in 2013) Sector Specific Training: 1,555 Region Specific Training: 300 Micro-Enterprise Innovation Academy: 500

Management Improvement Training SEDA Support for Micro- Enterprises Training Supports Results Training Programs ‘05 ‘07 ‘09 ‘11 Innovation Training 246 1,005 11,841 101,596 Management Improvement Training - 23,414 112,094 104,126 E-learning Training 75,059 338,088 Total 24,419 198,994 543,810 Category '05 '07 '09 '11 Budget(100 million KRW) 5.3 16.5 65 50 Number of Consulting 1,102 2,634 8,764 7,645 Legal Aid 26 104 346 314 Category ‘07 ‘09 ‘11 Ratio of enterprises with increased revenues 43.0% 60.0% 58.2% Revenue increase rate - 3.8% Satisfaction Level 76.3% 84.5% 83.5%

Youth Entrepreneurship Training Program SBC Support for Youth Entrepreneurs Youth Entrepreneurship Training Program One-stop training center to nurture young CEOs by providing all the resources needed for starting a business: (300 CEOs per year) Start-up training R&D support Prototype production Start-up loans after training period 2013 Budget: $23 million (Support up to: $100K/person)

Key Lessons from Korea and Implications for KSA √ Clear and Shared Vision: Communicate with your people √ A Dedicated Government Agency was effective √ Close Partnership between Government & Private Sector √ Ensure strong execution of policies: Speed matters! √ Foster a spirit of competition and enhance efficiency √ Educate, Educate, Educate!

Visit to Leading SMEs with Innovative Technologies in Korea Learning Journey to Korea: Incubating & Fostering SMEs Visit to Leading SMEs with Innovative Technologies in Korea  

Vice President, Human Capability, GASCO Thank You Mr. Rashid Al Nuaimi, Vice President, Human Capability, GASCO