KITA News and Reports
  • Global Hidden Champions Enhanced Korean Trade for Last Decade
    2017-07-03

    Global Hidden Champions Enhanced Korean Trade for Last Decade

    - An analysis of 179 winners of the Best Trader of the Month award for 10 years (2007-2016) -

     

    It appears that Korean small and medium-sized enterprises have driven Korea’s exports over the past decade. The Korea International Trade Association (Chairman, Kim In-ho) analyzed ten year’s growth trends of 179 companies, the winners of 'BEST TRADER OF THE MONTH' award, who are the representatives of the promising small and medium-sized companies. 

     

    While Korea's exports have been declining for the past two years, the exports of small and medium-sized enterprises have steadily increased and marked the record high 37.5 percent last year, contributing to mitigating the reduction of Korea's export volume. An analysis of 10 years of award-winning companies representing such promising small and medium-sized companies shows that those companies have average history of 20.1 years and their average survival rate is 92.7 percent after starting up the businesses. The figure is significantly high compared to the survival rate of 11.1% of ordinary start-up companies. In addition, while Korea's overall exports grew 3.3 percent every year over the past decade, the exports of award-winning companies increased by 13.3 percent. They have greatly contributed to Korea’s economy as their average annual employment growth rate is 5.4 percent, which is far higher than Korea's average of 1.4 percent.

     

    By item, exports of electrical and electronic products such as wireless communication device parts and integrated circuit semiconductors increased, driven by expanded demand for smartphones, while exports of machinery declined. By market, exports to emerging markets in Asia, including the Vietnamese market, increased significantly from 17.2 percent in 2007 to 37.9 percent in 2016 due to the overseas expansion of part suppliers that are primary vendors of smartphones. In addition, exports of K-consumer goods, including agricultural and fishery products, cosmetics, beauty products, biotechnology and pharmaceuticals have expanded significantly.

     

    It appears that the award winners that have been growing for the last 10 years are in the new growth industries such as next-generation car parts, including medical, bio, electric car, and connected car, and smartphone parts such as camera lens and module inspection equipment. In addition, the companies share the characteristics that they practice preemptive investment and high R & D intensity in preparation for the upphase, and they are promoting the smartization of the manufacturing industries, responding early to the fourth industrial revolution.

     

    DA Technology (CEO, Park Myung-kwan, 62nd award winner in September, 2013), a manufacturer of rechargeable battery for small-sized (smartphone) and medium-sized (vehicle) products continue to renew its export records  for five consecutive years with the support of global expansion of eco-friendly car industry as well as China’s electric car policy.

     

    Medytox, a manufacture of injectable botulinum toxin (CEO Jung Hyun-ho, 78th award winner in April 2015), has a R & D investment ratio of 14 percent compared to last year's sales, which is much higher than the national average of 3.8 percent. The company’s annual average growth rate of exports exceeded 30 percent for 10 years, and its exports have not declined in a single year for a decade.

     

     Kim Hak-joon, head of Member Support Department at KITA, said "Over the last 10 years, global hidden champions have been a driving force for Korean trade, including exports and employment." As exporters contribute more to creating quality jobs, KITA will find small and medium-sized enterprises with global competitiveness and support them to grow into small but powerful companies."

     

    The 'BEST TRADER OF THE MONTH' award was established in July, 2007, by the Korea International Trade Association, the Ministry of Trade, Industry and Energy and the Korea Economic Daily with a view to encouraging the exporters and motivating the morale of traders.

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