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) -
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."
'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.