Small Businesses "Sandwiched"

Small business owners vented their frustration caused by the recent raw material cost hike, large companies’ domination in the market and social instability.

In the “2008 Small Business Leaders’ Forum” held on Jeju Island from July 10 to 12, they shared the common difficulties in running their businesses in the current economic crisis.

Korea Tool Industry Cooperative President Choi Yong-shik said, “Small business owners renewed their determination to do their best, but they are faced with a crisis in reality. Because of raw material price and exchange rate hikes, small businesses are having a extremely hard time.”

When Small and Medium Business Administration President Hong Seok-woo had a lecture under the theme of “change and communication” on July 11, small business leaders had a Q&A session to discuss the problems they are facing.

A leader of a small company in Incheon said, “My acquaintance who had been running a manufacturing company for a long time in the Shihwa Industrial Complex recently closed his business because of the company`s labor union. About 15 of his employees were affiliated with the Korea Confederation of Trade Unions, and the umbrella union requested him to send five of them to the candlelight vigils held in front of Seoul City Hall frequently. How can we run a company in such an environment?”

A member of a baking industry-related union said, “There are a public purchasing session in which only small businesses are allowed to participate, but large companies are participating there by setting up some bogus small companies.”

A senior member of the Korea Fastener Industry Cooperative said, “After a media coverage which says a particular small company is having a very hard time, the company faces even more serious difficulties taking loan from banks. If a media coverage says the company is doing very well, other companies in the same industry got jealous and pick on the company. It is very regretful that promotion of companies through media is impossible.”

Some argued that small businesses should actively participate in revitalizing the economy.

Park Sang-hee, CEO of Miju Co., stressed, “It is very regretful that the society is chaotic due to the candlelight vigils when the entire public should focus on economic revitalization. It is time for small business leaders to unite and show the strength to revitalize the economy.”

Korea Federation of Machinery Industry Cooperatives Chairman Han Seung-il said, “Small businesses have always faced difficulties and always been marginalized. But we’ve been and will be doing well. What is needed now is encouragement for small businesses that they can do well.”

Korea Federation of Small and Medium Business President Kim Ki-moon said in his opening remarks, “Large companies are indiscriminately entering the industries traditionally thought to be the domain of small businesses, if they see the slightest potential. There are 459 affiliates of the country’s top 10 conglomerates, a 48 percent increase from five years ago. The government needs to come up with institutional measures to prevent conglomerates from eating away what small companies have built.”

Meanwhile, some 650 small business CEOs expressed their determination to hire one additional worker per each company, energy conservation and social contribution through the "Jeju Declaration." On the sidelines of the forum, a variety of lectures were held under the theme of finding a new growth engine and creative management.

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