Korean Hidden Champions Going Global
By Na Jeong-ju
The administration is searching for ``hidden champions,'' the little-known but powerful small firms equipped with the world's best technologies, to promote them abroad as part of a nation branding campaign, the project manager said Tuesday.
In an exclusive interview with The Korea Times at his office in Seoul, Euh Yoon-dae, chairman of the Presidential Council on Nation Branding, expressed hopes that such efforts will help consolidate the country's reputation as a technological powerhouse and, in the long run, enhance Korea's global image.
Policymakers here have complained that Korea, associated with the negative image of North Korea, illegal demonstrations and bribery scandals involving politicians, to name a few, doesn't get its due treatment from overseas buyers as the world's 13th-largest economy.
``Still, Korea has many things to proudly show to the world,'' Euh said. ``One of them is the technological advances it has made.''
According to government data, the number of made-in-Korea products that are among top fives in terms of global sales totals 388. Of them, 244, or 63 percent, are produced by small- and medium-sized enterprises (SMEs).
Many of those companies have failed to get attention from end users for various reasons: Their names are unknown largely because the market is not big enough, or they produce parts or accessories. Some have avoided revealing their origin due to the so-called Korea Discount.
``The firms are largely unknown, but are true contributors to the country's fast exports growth,'' the former Korea University president said. ``They are eligible for more investment and global attention. Their fame will help for Korea's reputation, too.''
After reading Hermann Simon's book, ``Hidden Champions,'' an analysis of 500 small German enterprises that hold leading global positions, Euh thought Korea could be like Germany.
Simon said in the book the firms tend to pursue market leadership above their market share; maintain highly-focused dominance of narrowly defined markets; reach out to global markets; maintain close relationships with their customers, based on superior service; and pursue constant innovation to maintain their market dominance.
To promote the competitive small firms abroad, the Korean government is considering setting up public relations offices at major airports and exhibition centers around the world.
Best of the Best
Euh's council is currently working with Daewoo Securities and the association of SMEs to choose ``the best of the best'' and give them full support for overseas expansion.
The blue-ribbon group may include HJC Helmets, the world's No.1 maker of motorcycle helmets since 2001; Esencia, the world's top toothbrush sterilizer manufacturer; and DongHwa Entec, which meets 83.3 percent of global demand for air-cooling systems for diesel-powered ship engines, financial industry sources said.
``The work to find little giants is part of the meaningful process of developing the country's future economic growth engines,'' the 63-year-old Euh said.
The plan is based on the recognition that there is a considerable gap between Korea as it is, and how the rest of the world sees it. The latest Anholt-GfK Roper Nation Brands Index showed it ranked 33rd among 50 surveyed nations and Euh earlier announced a bold plan to raise the country's standing to 15th by 2013.
Euh pointed out that Korean firms should actively seek mergers to get the world's premium brands, saying it is the fastest way to upgrade their images among global customers.
``For the past decades, a large number of Korean firms have supplied products to foreign multinational firms as sub-contractors. Through the experience, the firms have learned how to do business on the global stage and improved the quality of their own products,'' Euh said.
``However, it takes a long time to become a global competitor in this way. The most effective and fastest way is to buy out global brands. More targets will be on the market as the economic recession deepens.
``This is the hunting season for Korean firms. There will be no better opportunity for Korean firms to expand their global presence in a short period of time,'' he added.
Euh's council, launched in January at the instruction of President Lee Myung-bak, also has many other plans in mind to upgrade Korea's international status.
10-Point Action Plan
Under a 10-point action plan announced in March, Korea will promote taekwondo, a traditional Korean martial art, and the Korean language; dispatch 3,000 volunteers abroad annually; increase economic aid to poor countries; expand programs for foreigners and multi-cultural families here; and adopt the Campus World Youth Exchange Program.
The government will also establish database and online communication channels for seven million Koreans living abroad.
On May 6, the Korea International Cooperation Agency will launch a group of 3,000 volunteers in a ceremony at Cheong Wa Dae, the chairman said.
Euh called Korea's ``Korea Sparkling'' nation branding campaign, adopted under former President Roh Moo-hyun, a failure saying the country now needs a better catchphrase to appeal to foreigners.
``The campaign has cost the government millions of dollars, but whether it attained the desired effects is questionable,'' Euh said. ``It is time to think about a new and more effective way to promote things Korean abroad. We will ask for advice from branding experts, if necessary.''