SEOUL, May 24 (Korea Bizwire) – A study said it takes an average of 19 years for a small- or mid-sized firm to graduate from that status and move up the rank of an enterprise of middle standing. According to a report by the Korean Chamber of Commerce and Industry based on a survey on 239 middle-standing companies that have attained the status for the past three years (2011-2013), the average time it took for them to do so was 19.4 years.
According to the definition of an enterprise of middle standing by the Association of High Potential Enterprises of Korea, it is a company with annual sales revenue between 40 billion won and 1 trillion won and employees between 300 and 999.
By the length of time, the time between 10 and 20 years accounted for the largest share of 30.5 percent, followed by 20 to 30 years (26.4%), fewer than 10 years (25.1%), and longer than 30 years (18.0%). The time length was about 2 years and a half shorter for companies focusing on exports (17.8 years) than those engaged exclusively in the domestic market (20.3 years).
Choi Sung-ho, professor at Kyonggi University and a KCCI advisory committee member, said, “The fact that exporting firms take fewer years than domestically focused ones in graduating from small-firm status shows the importance of creating overseas sales channels for faster growth. The government needs to provide support measures emphasizing global market expansion.”
According to the survey results, most middle-standing companies said there are more disadvantages of being a middle-standing company than advantages, as the government stops giving them tax breaks, low-cost policy loans, and human resources support as soon as they graduate from the small-business status.
Meanwhile, advantages of being a middle-standing company included enhancement of corporate prestige (52.7%), scale economies (13.7%), ease of talent recruitment (12.2%), ease of private capital funding (10.7%), and strengthening of bargaining power (9.2%).
Written by Sean Chung (firstname.lastname@example.org)