South Korea SMEs Looking Overseas for Sustainable Growth

South Korea’s small and medium enterprises are seeking to enter overseas markets as they face mounting challenges at home, a poll by a local think tank showed Sunday.

According to the Center for Large and Small Business Cooperation, 85.5% of all SMEs in the country said they are interested in setting up operations abroad, Yonhap reported.

The findings were based on responses from 482 companies to questions on the latest market developments, with 412 saying they are considering diversifying within two years.

Of the total, 67.2% said they aim to ship goods and services abroad, followed by 16.7% that are interested in some form of alliance with partners in the areas of technology exchange, sales and financing. Only 0.5% said they are interested in mergers and acquisition with other companies.

“With the domestic economy not showing signs of vast improvement, the country’s smaller companies are looking elsewhere to find new engines for sustainable growth,” the center under the Federation of Korean Industries said.

Meanwhile, South Korea’s job growth has remained anemic in recent months despite the national economy showing signs of a recovery with robust exports, according to data on Sunday.

The South Korean economy added about 112,000 new jobs in March and 104,000 new jobs in February, the data by Statistics Korea showed. It is the first time in almost two years that the number of new jobs remained at the 100,000-mark for two consecutive months, Yonhap reported.

South Korea’s exports rose 6.1% in March from a year earlier, thanks largely to strong demand for semiconductors and petrochemicals. Experts said the nation’s job market remained sluggish despite that economic growth as it depended heavily on the semiconductor industry, which tends to generate fewer jobs.

Data showed the semiconductor segment’s exports generated 110,000 additional jobs in 2016, while that of the automobile sector reported 230,000. In March, the unemployment rate stood at 4.5%, up 0.4 percentage point from a year earlier. The government proposed a 3.9 trillion-won ($3.64 billion) extra budget earlier this month, largely to create new jobs for young people, amid deepening concerns about high unemployment, which the government warned could have catastrophic consequences.