Articles
Presidential Address : Challenges for Small and Medium Businesses in Korea for Future Growth
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AuthorHongkee Kim (Hannam University)
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Year2025
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VolumeVol.73
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NumberNo.1
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South Korea achieved a high growth rate of 7-8%, earning its reputation as a miracle country of economic growth until the mid-1990s. However, since the 1990s, the long-term growth rate has drastically declined, recently hovering around 2%, with projections suggesting a potential drop to near 0%. Additionally, income inequality is relatively high among OECD countries, exacerbating social and political conflicts. This study focuses on the problems of small and medium enterprises (SMEs), particularly noting that the service sector and smaller businesses, which are primarily SMEs, are experiencing declining productivity. The large productivity gap between large corporations and SMEs is identified as a cause of slow growth and inequality. To address these issues, it is crucial to enhance the productivity of SMEs, especially service-oriented and smaller businesses. This paper highlights the importance of fostering a dynamic business ecosystem and improving SME productivity as primary tasks. Promoting competition and innovation, and achieving economies of scale through business expansion are necessary to enhance productivity.
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