This paper aims to analyze the current situations of Korean small business, particularly, their relative backwardness comparing with the large business. Since the inauguration of the First Five-Year Economic Development Plan in 1962, the backwardness ...
This paper aims to analyze the current situations of Korean small business, particularly, their relative backwardness comparing with the large business. Since the inauguration of the First Five-Year Economic Development Plan in 1962, the backwardness of the small business has become more serious than before in the following aspects:
1. Of the total number of manufacturing industries, 97.1% were occupied small business and the number of employees of small business accounted for 50.1% of the total employment as of the end of 1970.
2. But the amount of value added by small business constituted only 28.5% of the total manufacturing industries at the same year. In the total output of manufacturing industries, only 30.3% was produced by small business.
3. The annual average growth rate of small business was 17.7%, while that of the total manufacturing industries was 23.7% during the period of 1966 to 1970. Thus, there was a gap of 6.0% of the growth rate between small and total manufacturing industries increased from 4.2% in 1966 to 7.2% in 1970.
The causes of the backwardness of small business can be enumerated as follow: the outmoded facilities of production, the shortage of the capital, the inferior talent of management, the lower level of technology and the limited outlets for products, etc.. Among them, more important factors seemed to be insufficient of production, the shortage of the capital and the deficiency of market for the products. Therefore, I confined the extent of analysis to these three factors.
To develop the small business it is necessary to readjust the industrial structure of Korea. The policy for small business should place its emphasis on increasing their productivity and on establishing a complementary relationship with large businesses.