[Smart Korea 3-Person Roundtable] "Digital Economy That Would Take 10 Years to Realize, Achieved Within 1-2 Years"

Asking the Path to a Smart Korea
Special Roundtable of 'Respected Entrepreneurs' Selected by the Ministry of SMEs
COVID-19 Crisis as an Opportunity
No Employment Decline Despite Digital Economy Expansion
Work Style Changes Due to Remote Work
Urgent Need to Remove Regulations to Strengthen SME and Venture Competitiveness

Jo Young-tak, CEO of Hunet, Park Young-sun, Minister of SMEs and Startups, and Lee Rae-cheol, CEO of SQ Engineering (from left), attended a special roundtable discussion on the 8th at the Seoul Video Conference Room of the Ministry of SMEs and Startups in Dongduk Building, Jongno-gu, Seoul, sharing their views on the digital economy, Smart Korea, and the creation of new jobs.
/Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kim Daeseop] Small and medium-sized enterprises (SMEs) are facing significant management difficulties due to the economic downturn caused by the spread of the novel coronavirus infection (COVID-19). If the economic recession accelerates after COVID-19, there are concerns about a chain crisis such as mass unemployment. The government is promoting the 'Korean New Deal' policy, which connects to the post-COVID era, aiming for a major transition to an AI-based digital economy to create new jobs. Bold government investment in SMEs and venture companies that will promote the digital economy, as well as the spread of a corporate culture that grows together with workers, have become important tasks for creating quality jobs. On the 8th, Park Young-sun, Minister of SMEs and Startups, and Cho Young-tak, CEO of Hunet, and Lee Rae-cheol, CEO of SQ Engineering, who were selected as 'Respected Entrepreneurs' by the Ministry of SMEs and Startups, met face-to-face at the Seoul video conference room of the Ministry of SMEs and Startups in Dongduk Building, Jongno-gu, Seoul. Through this roundtable of the three, they explored the path to a 'Smart Korea' and the role of respected entrepreneurs in times of crisis.

-There are growing concerns about mass unemployment.

▲Park Young-sun, Minister of SMEs and Startups (Park) = The Ministry of SMEs and Startups plans to actively support SMEs struggling due to the impact of COVID-19 to maintain employment as much as possible. We will create a foundation for a 'Digital Powerhouse, Smart Korea' through the smart and digital transformation of startups, SMEs, and venture companies, and create quality jobs.

▲Cho Young-tak, CEO of Hunet (Cho) = It is actually difficult to increase employment immediately in the current emergency situation. It would be fortunate if we can endure without restructuring. In response to the COVID-19 crisis, we have shared and implemented emergency management principles with our employees. We are making efforts with the principle of not conducting artificial restructuring or salary cuts and not cutting off the sprouts of future growth engines. Employees are also voluntarily working on cost reduction.

▲Lee Rae-cheol, CEO of SQ Engineering (Lee) = The construction industry sector has been depressed due to a decrease in orders and investment, affecting construction and related businesses. Unemployment and reduction in new employment are expected. A systematic investigation and analysis by specialized institutions on changes in employment structure by industry are necessary.

Government and private experts met on the 8th at the Seoul Video Conference Room of the Ministry of SMEs and Startups in Dongduk Building, Jongno-gu, Seoul, to explore the path to a "Smart Korea" and the role of respected entrepreneurs in times of crisis amid the digital economic transformation and new job creation. From the left, clockwise: Kim Min-jin, Head of SME and Venture Department at Asia Economy (moderator), Park Young-sun, Minister of SMEs and Startups, Lee Rae-cheol, CEO of SQ Engineering, and Cho Young-tak, CEO of Hunet.
/Photo by Kang Jin-hyung aymsdream@

-The AI-based digital economy is the direction we must go, but won't it inevitably lead to job losses?

▲Park = This year, the Ministry of SMEs and Startups set the theme of the President's New Year work report as 'A major transition to a digital economy, Smart Korea' and announced it. This theme became a national agenda within five months. We are confident that the spread of the digital economy will not reduce employment. Although there were concerns on the ground that the spread of smart factories would reduce employment, after introduction, productivity increased by an average of 30%, and companies increased profits, leading to more investment in research and development (R&D). As a result, SME employment showed an average increase of 2 to 3 people. The Ministry of SMEs and Startups will popularize AI technology by applying it to smart factories, smart stores, and smart services.

▲Cho = Our company has invested heavily in the digital economy for about four years. From 2016, when the term Fourth Industrial Revolution was a keyword, until last year when digital transformation became a hot topic, we invested about 50 billion KRW in 'Edutech.' Among our approximately 350 employees, 130 are IT personnel. Through investment in the digital economy, our sales are also increasing.

▲Lee = To solve the unemployment problem, long-term support policies for technological innovation linked to the Fourth Industrial Revolution will be essential. We must transform into a digital economy.

Park Young-sun, Minister of SMEs and Startups / Photo by Kang Jin-hyung aymsdream@

-What new changes do you think the COVID-19 crisis has brought to the business environment?

▲Lee = Through telecommuting operations, perceptions of work methods and department heads' management styles have changed. I believe there is opportunity in crisis. We plan to focus on qualitative growth for the future. A comprehensive innovation of the company's management system is necessary. In particular, our management goal is to strengthen mid- to long-term technological competitiveness by expanding R&D for smart construction technology development using big data-based AI, drones, and Internet of Things (IoT).

▲Cho = Offline education used to be mainstream, and online and edutech were minorities, but the COVID-19 crisis has caused cracks in the offline-centered corporate education industry. This is an opportunity for edutech to become mainstream. The COVID-19 crisis has opened a tremendous opportunity for the digital transformation of human resource development (HRD), which would have taken about 10 years, to become a reality within 1 to 2 years.

▲Park = One thing I felt while passing through the COVID-19 tunnel is that the concept of working hours we have talked about so far needs to change. Since telecommuting has deeply penetrated our society, there must be a conceptual change in this area as well. How labor, management, and government reach social consensus on the new concept of work within the digital economy agenda is very important. Social consensus on the 52-hour workweek system is also important. Social consensus among labor, management, and government will become a new agenda.

Jo Young-tak, CEO of Hunet / Photo by Kang Jin-hyung aymsdream@

-What are the essential things the government and National Assembly must do to strengthen the competitiveness of SMEs and venture companies?

▲Cho = In a word, deregulation. It is important to review one by one whether all the regulations made so far are still valid through a special project and to change the paradigm regarding regulations. The characteristic of Korean people is that if you set the stage and let them play freely, they create the world's best things, but government officials still seem to think differently about regulations. Deregulation and a 'task force (TF)' where various government ministries can cooperate to strengthen SME competitiveness are also needed.

▲Lee = Reform tasks related to regulations applied to the construction industry must be promoted. To recover the depressed economy, active promotion of infrastructure policies such as social overhead capital (SOC) investment is necessary. Laws and policies for strengthening SME competitiveness must also be enacted and implemented in a timely manner.

▲Park = The government ministry task force was applied last year to the policy for fostering the materials, parts, and equipment industry. This year, production of masks and diagnostic kits related to COVID-19, vaccine and treatment development are also being promoted through task forces. The major transition to a digital economy is also being carried out under the name of the Korean New Deal with a task force. In the future, each ministry needs to create more convergent organizations.

Lee Rae-cheol, CEO of SQ Engineering / Photo by Kang Jin-hyung aymsdream@

-What has changed since you were selected as a respected entrepreneur by the Ministry of SMEs and Startups?

▲Lee = I am engaged in the business of safety diagnosis and inspection of architectural structures. Thanks to being selected as a respected entrepreneur by the Ministry of SMEs and Startups, I have become more determined to build a better company and continuously provide value for a disaster-free and safe society. I also pledged to grow the company and provide better treatment and welfare to employees. I feel social responsibility and fulfillment.

▲Cho = Employees' pride has increased. When meeting other managers selected as respected entrepreneurs, they say they received the most help in recruitment. The competition rate for recruitment has increased about tenfold. It is becoming widely known that there are good companies among SMEs.