South Korean entrepreneurs are holding their breath, as the country issues in a new era, having voted in its first female leader in history. Park Geun Hye (60), whose childhood was spent in the presidential palace, is the daughter of assassinated dictator (1979) Park Chung Hee, whose autocratic 18 year rule, tough economic policies and questionable human rights record cast a shadow over her candidacy. Yet, there are signs that she is dedicated to reversing a slow in the economy through fiscal and practical support aimed at strengthening SME’s, particularly in the high-tech space.
Phenomenal economic growth in Korea during the elder Park’s transitional era and through the first decade of the 21st century, now places Korea as the 14th largest economy in the world. But this growth has slowed from 5% last year to 2% this year and Park aims to assist Korean SMEs to expand onto the global stage, improve sustainability and create jobs.
In a country whose economic landscape is currently dominated by ‘chaebuls’ (sprawling politically-connected family owned business conglomerates) Park’s party has pledged an increase in matching funding for startups and SMEs to $2.3Bn, particularly in the high-tech industry. The party has also pledged to provide government support on HR issues, in order to increase capabilities, which is mainly aimed at improving global marketing and sales performance.
The administration also aims to establish government support for struggling organizations, to prevent collapse, and further build sustainability in the small business sector. Currently SMEs are reliant on major Korean corporations to fill their order books, as they lack the in-house capacity to expand beyond the peninsula, on their own. The new government also aims to invest in high-tech R&D, which it sees as an area for improvement within smaller organizations.
Another pledge is to support the global spread of Korean-style content, perhaps spurred on by the unprecedented global success of Korean pop culture in the past few years, most notably with Psy’s Gangnam Style in 2012. The new ‘Contents Korea Lab’ aims to foster new talent and offer institutional support for established content providers through the ‘Contents Korea Fund’.
The rewards of decades of incredible financial success of large Korean corporations has been scantily shared and there is a hope now that Park will address this disparity, despite her staunchly conservative upbringing. Currently much of the detail is lacking in Park’s policies, but her rhetoric at least is encouraging and the entrepreneurial community in Korea hopes that the future holds promise.