Creation of Convergence and Opportunity
Korea Industrial Complex Corporation (KICOX) is revitalizing industrial complexes and small mid-sized enterprises (SMEs) by enhancing the productivity and competitiveness of manufacturing industry through the upgrading and introduction of smart systems for SMEs in industrial complexes, while expanding job opportunities for youths by raising their positive recognitions of industrial complexes and SMEs.
“I will try to transform our industrial complexes into key spaces leading the fourth industrial revolution and the digital industry economy based on creativity and convergence,” said Hwang Kyu-yearn, the chairman of KICOX on September 13. “In order to provide new vitality to industrial complexes and the companies housed in them, we will take the lead in promoting communications with companies in industrial complexes and focus on support projects for an export recovery and job creation.”
Building ICT Convergence Industrial Complexes
First of all, KICOX is showing its will to promote industrial complexes by building smart industrial complexes and intelligent factories through the convergence of information and communication technology (ICT) and the traditional manufacturing industry. In particular, KICOX is promoting the competitiveness of enterprises housed in the old industrial complexes by upgrading the industrial structure and giving high added value to them. KICOX has been carrying out structure upgrading projects since 2010. They completed work worth 400 billion won (US$360 million) of a total of two trillion won (US$1.8 billion).
In order to create an atmosphere for the private sector to voluntarily diffuse smart factories, KICOX is taking the lead in promoting communications with SMEs with the Smart Factory Promotion Corps at the center. Meanwhile, KICOX has been recording meaningful achievements to improve domestic manufacturing competitiveness by helping a total of 2,611 small and medium sized enterprises build smart factories.
Specifically, KICOX confirmed various achievements such as the diversification of production items through flexible production, efficient inventory management, energy saving, and developing new markets, as shown in the defective rate decreased by 51.4%, the cost reduction by 24.6%, and delivery time by 11.8%. This is the result of an analysis of 1,566 companies that have been completed by the end of September.
Moreover, KICOX also supported the cultivation of about 1,400 SME employees to develop factory operating capabilities by utilizing educational programs such as the Smart Factory Academy.
An atmosphere for spreading voluntary smart factories in the private sector is gradually being created. The proportion of SMEs which built smart factories among all SMEs jumped from 57% at the end of 2014 to 87% in May of this year, raising people’s awareness of necessity for building smart factories.
In addition, KICOX contributes to the spread of the results by providing professional manpower and educational programs for SMEs by encouraging the participation of large businesses such as Samsung, Hyundai, and LG among others.
In recent years, KICOX has expanded opportunities for SMEs, which lack collateral, to participate in the smart factory project by establishing "Smart Factory Agreement Guarantee Loan" in connection with financial institutions such as the Credit Guarantee Fund and Shinhan Bank.
KICOX is also continuing to put forth efforts to present a leading model of smart factories through the establishment of representative smart factory model. The corporation selected Dongyang Piston Co. in Banwol City’s Sihwa Industrial Complex as a representative smart factory for the purpose of suggesting “the best demonstration model of smart factories” to SMEs. By the end of September, KICOX also supported benchmarking through field trips of 527 CEOs of small and medium enterprises.
The organization aims to expand the number of smart factories to 10,000 by the year 2020, including 2,700 factories by the end of this year and 4,000 by the end of 2017. In addition, KICOX will additionally designate the factories in the electric, electronics and machinery sectors as the representative smart factories centered on the root industry and will help them advance to become world-class smart factories with strong competitiveness through expert consulting, research and development (R&D), and financial supports.
At the same time, KICOX will utilize smart factories based on the creation of new demand in promising areas such as the robot and new energy industries among others. To this end, KICOX will select companies which can make the most of robots via expert consulting and give support to them when carrying forward the diffusion of smart factories and secure excellent models of robot-based smart factories by pushing forward with pilot projects of 20 companies
On top of that, Korea Industrial Complex Corporation will strengthen supports for core technologies such as big data, 3D printing, AI and the cyber physical system (CPS), and actively state opinions through international standards organizations (the ISO, the IEC and etc.) and at the same time, carry out the development of application and connection standards based on international standards.
In particular, beginning next year, KICOX will expand the human resources base by establishing smart manufacturing master and Ph.D. courses at two or three domestic graduate schools and fostering professional technical personnel with ICT and manufacturing knowledge and technologies, and problem-solving capabilities.
Efforts to Improve Positive Recognition of Industrial Complexes and SMEs
According to a social survey by the National Statistical Office of Korea in 2015, popular workplaces selected by young people were governmental organizations (23.7%), state-run enterprises (19.5%) and large private companies (18.7%). SMEs were found least popular with 3.0%. Observing Korea's employment structure, SMEs account for 85% of total employment while large companies for 15%. Given that annual employment growth rates are 5% of SMEs and 2% of large companies, SMEs which employ young people more than large companies have been shunned. Recently, the proportion of young CEOs of newly found businesses also fell from 32.4% in the early 2000s to 11.6%, showing that generally young people lacked enterprising spirit.
Meanwhile, according to a Korea Employers Federation survey said that the rate of college-educated new recruits’ quitting their jobs at large companies within one year has been rising steadily from 2012 (23.6%) and 2013 (25.2%) to 2016 (27.7%). In addition, their reasons for leaving the companies were as follows: Organization and job adaptation failure (47.6%), unsatisfactory salaries and welfare benefits (25.2%), and complaints about the locations of their workplaces and working environments and (17.3%). The results of these surveys suggest that they did not think about their jobs before selecting their companies. In this way, unnecessary costs are incurred for both students preparing for employment and companies which hired them.
Under the circumstances, KICOX has been going forward with various projects to attract a young workforce to industrial complexes by instilling positive recognition in the mind of students and young people under the catchphrase of “SMEs at industrial complexes can solve the problem of unemployment.” This project can be divided largely into company tours and “Damso” which is a job concert for conversations between companies and young job seekers.
In order to reevaluate excellent but less known SMEs at the industrial complexes, KICOX has been inviting SME CEOs as mentors and holding events for them to communicate with young people. The event is “Damso,” a job concert for young people to publicize jobs at local SMEs and help them have desirable career philosophies. As part of the SME recognition improvement project, the job concert began in 2012 and has been taking the lead in changing jobseekers’ recognition about SMEs to address SMEs’ difficulties in securing good human resources
Moreover, KICOX has been conducting the Happy Enterprise Tour Program to visit excellent companies at industrial complexes for specialized high school students. As part of the “Recommending Workplaces for Job Seekers” project conducted by the Ministry of Education, the project has been implemented to improve people’s recognition of industrial complexes and create a positive image of SMEs among people.
This year, 2,433 students visited 79 companies on 73 occasions of the Happy Enterprise Tour Program and 1,587 young people participated in the job concert Damso held in seven events.
“We will continue to promote the role as a guide for young workforces to be supplied to the industrial complexes along with the projects to advance the structure of industrial complexes,” said KICOX chairman Hwang Kyu-yearn.