1. How to Promote
SMEs’ Export

2. Two SMEs at the Beginning
SMEs for subsistence: to make a living for their families (ex: shops, restaurants, service shops etc.)
SMEs for business: to achieve far-reaching success, or to contribute to national economy (ex: trade, IT services, tech startups etc.) → a more important point: Are they ready to assume ‘risk’ in exchange of ‘potential profit’?

3. What is Potential Profit?
Increased sales volume in more expanded markets
Higher price for their final products
Cheaper price for inputs which are needed in producing their products: intermediate goods (materials and components), capital goods (machines, equipment), land and labor forces

4. What is Risk? Failure in making good products
Lack of technology
Lack of good workers
Shortage of capital for running business
Failure in finding (export) markets
Lack of information (buyers, taste, regulation)
Bad partners (buyers)
Failure in fighting against competition

5. What Should Government Do?
First Task
Finding ‘entrepreneurial zeal’ among many SMEs
Even among ‘greedy (dirty) people’, in many cases, among importers
Not to be captured by SMEs for subsistence (usually politically more outspoken)

6. To Increase Potential Profit
Securing Markets
By diplomatic channels,
Participating in the World Trading System (WTO) and multilateral negotiations
Making bilateral cooperation (FTAs included): trade dialogues, investment guarantee agreement
Exchanging visits by high ranking officials (including leaders)

7. To Increase Potential Profit
Securing Markets (2)
By helping SMEs to explore foreign markets
Bringing them information on markets (ex: embassies, KOTRA, think-tanks (KIEP, KIET), traders associations (KITA) etc.)
Guiding them to exhibition fairs (KOTRA)
Inviting foreign buyers (KITA, KOTRA etc.)

8. To Increase Potential Profit
Reducing Costs
Through special incentives for exporters
Unlimited free access to imported materials and components (usually reimbursing tariff on the proof of exporting of final goods)
Tariff exemption for imported machines and equipment

9. To Increase Potential Profit
Reducing Costs (2)
By providing essential resources in cheap prices
Land: Free Export Zone (Masan, often called as export processing zone), industrial complexes (Guro, and Siwha etc.: KICOX)
Labor forces: vocational training centers, engineering high schools

10. To Minimize Business Risks
Technology
By helping SMEs to procure foreign technologies
By establishing public research think tanks
KIST (Korea Institute for Science and Technology
24 more public technology institutes: NST

11. To Minimize Business Risks
Money
SME-specific bank: IBK (originally called as SME Bank)
Trade-specific bank: EXIM Bank
SME-specific financing funds: various purposes (marketing, R&D, consultation, hiring, FTAs, etc.)

12. To Minimize Business Risks
Money (2)
Startup Stage
Funds to support startups :
Provide financial assistance to high-tech startups with insufficient financial resources to promote startups and  create jobs  
Investment and Loan Hybrid Financial Assistance :
Provide financial assistance at low interest rates for high-tech SMEs with growth potential by combining the merits of investment and loan.
Income Sharing Loan :After financing, receive income-related interest(fixed interest+income-related interest) based on the company's sales performance
Growth Sharing Loan : acquire convertible bonds(CBs) and offer loans at a low interest rate

13. To Minimize Business Risks
Money (3)
Growth Stage
Funds to establish the foundation for new growth:
Designed to create new growth engine to enhance  the competitiveness of SMEs with innovative technology and management capability
Re-Growth Stage
Business Restart Funds :
Designed to create a virtuous cycle of business ecosystem by providing struggling SMEs with funds necessary for restructuring and by supporting them to restart their business

14. To Minimize Business Risks
Money (4)
Throughout the whole business life cycle
Funds for commercialization of research outcomes :
Nurture high-tech SMEs through commercialization of their research outcomes
Business Stabilization Funds :
Aimed at building a stable business environment for SMEs affected by natural disasters  or facing difficulties

15. To Minimize Business Risks
Risk on Foreign Markets
Trade Insurance: KSURE

16. To Provide General Supports
Government Body: SMBA
SME-specific public institution: SBC (which is in charge of many SME-specific funds)
Association among SMEs: KBIZ (Korea Federation of SMEs)
Special Think Tank: Korea Small Business Institute (KOSBI)

17. Links KOTRA: http://www.kotra.or.kr/foreign/main/KHEMUI010M.html
KIEP:
KIET:
KITA:
KICOX:
Masan Free Trade Zone:

18. Links Vocational Training: http://www.hrd.go.kr/hrdp/ma/pmmao/index.do
KIST:
NST:
IBK:
EXIM Bank:

19. Links Trade insurance: https://www.ksure.or.kr/en/index.do
SMBA:
SBC:
KBIZ:
KOSBI: