Win-win strategy for large and small firms

KITECH President showcases customer-oriented public enterprise

By Kim Tae-gyu

One of the latest “in vogue” phrases in Korea appears to be “shared growth between large-sized corporations and their smaller subcontractors” with President Lee Myung-bak stressing its significance.

Under the initiative, the country’s major conglomerates competed earlier this year to announce ways to assist their partners, many of which are based around financial support.

By contrast, Korea Institute of Industrial Technology (KITECH) President Na Kyoung-hoan claims that there is an alternative approach to chalk up shared growth through boosting the technological edge of small firms.

``Everything has multiple aspects and so should be shared growth. In our view, it is a crucial part of the concept to raise technical competitiveness of small- and medium-sized enterprises (SMEs),’’ Na said in a recent interview with The Korea Times.

``Under the mindset, we always think of how to contribute to them in terms of technology because we are the institute supposed to help SMEs improve their capability.’’

His remarks echo the opinion of Chung Un-chan, the former prime minister who now leads the state-backed Commission for Shared Growth for Large and Small Companies.

``Small outfits have a knack for technology while larger ones have the knowhow on how to take advantage of them to build products and how to market them,’’ Chung said at a luncheon meeting with the press midway through last month.

``One of the real win-win solutions beneficial to both of them would be to beef up the chemistry between them. To materialize the solution, the requirement is that small-sized companies have to retain advanced technology.’’

Pilot projects

Na has devised a pilot project to enable the above-mentioned unique approach of symbiotic growth, which he wishes to start this year.

His idea: KITECH is poised to channel its budget to set up a fund together with conglomerates.

``The funds will encourage large corporations to develop cutting-edge technology along with their partners and suppliers. The bottom line in the program is how to uncover the technological demands of SMEs,’’ Na said.

``We have contacted some big firms and many of them showed great interest. Due to budgetary constraints, we plan to begin with a pair of players sometime this year.’’

In tandem with the unprecedented project is his drive geared toward strengthening regional branches in order to hear the grassroots voices of SMEs.

Over his second term at the Cheonan, South Chungcheong Province-based KITECH, which was created in late 2010, Na vows to establish new offices to cover the whole nation while reinforcing existing ones.

``Excluding overhead operations such as finance and personnel management, most of our organizational capacity would be offered to customers of SMEs. To do so, we need to work next to regional industrial complexes, which accommodate many SMEs,’’ the 53-year-old said.

``From our perspective, it could be an inefficient organizational structure whose management is difficult. From the viewpoint of our client SMEs, however, it is the most efficient system.’’

When Na assumed stewardship, first in 2007, KITECH had four branches as well as its head office. During his initial term, the agency set up one more office in Taegu.

Currently, it is reviewing building another in Gangwon Province. If the idea gains the green light, all provinces would see the presence of KITECH with the sole exception of the southernmost island of Jeju Province.

Along the same lines, KITECH recruits researchers on the condition that they will work at the branches instead of the head office or Seoul. Na noted that scientists, who were born in each place and studied in Seoul or abroad, applied for the job openings.

``Even though they studied in other cities, many scientists have loyalty to their hometowns. Hence, many of them are happy to volunteer to work in their birthplaces. Hence, our efforts weaken the brain drain,’’ Na said.

Hidden champions

Na said that the plan of underpinning SMEs will eventually be of great help not only to the small entities but also for the whole economy.

``Have a look at Germany, which fared so well even during the international financial shock, which troubled so many countries. The key was the country’s competitive small-sized manufacturers, dubbed hidden champions,’’ Na said.

``We hope to nurture about 300 hidden champions through technological partnerships with them. This will uphold national competitiveness over the long haul. Toward that end, we are determined to unswervingly put forth efforts.’’

Na pointed out that Korea is required to adopt such a strategy to keep prospering in the future.

``As a latecomer, we have gone all-out to catch up with industrialized states and we have done quite well. However, things are different now,’’ he said.

``We have to edge past our rivals to remain ahead of the pack. In order to become a genuine global leader, we have to develop source technology. That’s what we look to achieve.’’

Asked about when he felt most proud during the past few years while at the helm of KITECH, Na said with a smile that he had been most happy to see the agency’s partners and its in-house researchers grow up.

``Thousands of local SMEs work in collaboration with us. Among them, some rack up substantial successes to have clout in their fields,’’ he said.

``Along the way, our researchers tend to get to understand the businesses in depth as well as acquiring the keen eye to see the commercial viability of technology. In other words, they grow to my great pleasure.’’

voc200@koreatimes.co.kr

Who Is Na Kyoung-hoan?

After getting his master’s in mechanical engineering at the Korea Advanced Institute of Science and Technology (KAIST), he started working for the government back in 1982.

After receiving his Ph.D. from KAIST, one of the most prestigious ivory towers here, he joined KITECH in 1989 when the state-backed agency was founded.

He assumed several key posts at KITECH and took the reins of the state-backed institute midway through 2007 to bring in a customer-oriented culture, according to insiders. He was the first KITECH researcher to be promoted to president.

Late last year, he made history once again, being reappointed as KITECH head for the first time.