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Moving towards Cluster 2.0
SeongNam Industry Promotion Agency (SNIP) has decided to make overall changes to the paradigm of its business support system
Moving towards Cluster 2.0
  • By matthew
  • March 9, 2012, 15:17
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SNIP (CEO: Lee Young-cheol) plans to implement a radical shake-up of its organization. The agency plans to change everything, from how it conducts business to what direction it will take in the future.

Seeking to use the 10th anniversary of its foundation to make a leap forward, SNIP explored ways to develop the future local economy and agency by creating a forum to nurture new industries.

Having begun operations in 2001, SNIP has solidified its reputation as a specialized agency for promoting industry by transforming Seongnam City into the best business hub in the metropolitan area and creating a business-friendly environment through multi-lateral support programs designed to stimulate the local economy and create jobs. Such programs include providing marketing support at home and overseas to develop markets for SMEs and venture companies, providing space for business activities, and expanding infrastructure for fostering industries.

As a result, the sales revenue of companies in major strategic industries such as system semiconductors increased over 3.8-fold, from 4.532 trillion won in 2001 to 15.2846 trillion won as of 2010. Exports jumped approximately 400 percent over the same period, from US$590 million to US$2.33 billion.

For the sake of balanced industrial development over the next 10 years, SNIP is seeking to make a new leap forward by establishing new industry policies aimed at creating jobs and stimulating the local economy. Using its success so far, it will nurture traditional industries, social enterprises, and citizen shareholder corporations, as well as existing strategic industries and specially fostered industries.

Accordingly, SNIP has placed a foundation for changing the business paradigm to strengthen professionalism through self innovation along with intensifying its cluster-style business support system and restructuring its internal organization for active response to external business environment.

The organizational restructuring has been characterized by strengthened policy research functions and a change from a team system to a group system, which involves combining the overlapping functions of several teams into singular departments. First, by taking on the task of strategic planning, the existing industrial economics research center has been expanded to the industrial policy research center. The operation department and business center department each under the operational headquarters have been divided into the business fostering department, the strategic industry department, and the future promising industry department. Existing team members have been positioned into these three departments and will carry out programs that support industries in regards to type and region. The administration support department and planning and public relations department, under the planning and administration headquarters, have remained unchanged.

SNIP plans to support the strategies to nurture new industries by changing the existing business support system which focuses on functions such as marketing, education, technology development, and consulting, to that of a more cluster-style business support system by attracting external resources, where the support will be made by industry type and region. The agency plans to establish a quality business support system by promoting cooperation among strategic, specially fostered, and traditional industries, and building the infrastructure for fusion and complex clusters with utilization of various networks centered on the Creative Management CEO Forums.”

SNIP will also change the way it supports businesses, moving from direct to indirect support. The agency plans to improve the way by matching over 90 percent of its public projects to external capital. President Lee Young-cheol previously mentioned such innovation, saying, “Implementing our public projects within budget has its limitations. We should improve how we support businesses by increasing the size of the budget, this can be done by matching external funds with the government’s budget.”

SNIP will actively locate various ways to increase the matching business including the “Global Game Hub Center” and the “Mobile Game Center,” which have been established with the Ministry of Culture, Sports, and Tourism, and to win government projects by establishing consortiums with companies within the city.

One example is a project linking venture business promotion zones nationwide, which is being implemented in cooperation with the Small & Medium Business Administration (SMBA). SNIP is considering a new business model that would link 25 venture business promotion zones nationwide to one data base to support marketing of venture companies in cooperation with the SMBA.

SNIP is currently working on raising funds for this. The agency has decided to expand investment by changing existing investment funds to guarantee funds. If the existing funds are replaced by guarantee funds, the guarantee amount could be increased up to 20 times. The agency aims to give practical help to as many companies as possible through this.

A person familiar with the agency, said, “The cluster-style business support system, which is defined as a system in which companies, laboratories, universities, and investment institutions create synergy effects through cooperation and fusion complexes between identical businesses and different businesses, is expected to play a role as a growth engine in the local industry in the future.”