"To Enhance Export Competitiveness, Our Small and Medium Enterprises Must Strengthen Digital Capabilities"

[Asia Economy Reporter Kiho Sung] At the ‘2021 Global Market Entry Strategy Briefing’ held online by KOTRA on the 1st, a prompt digital transformation response was urged for our small and medium-sized enterprises (SMEs) and mid-sized companies. Marking its 22nd year, this briefing featured domestic experts and KOTRA overseas regional heads who reviewed the global market outlook for next year and discussed company-specific response strategies.

Kim Kyung-jun, Vice Chairman of Deloitte, stated in his presentation, “The novel coronavirus disease (COVID-19) has acted as a catalyst for the ‘untact’ trend that has evolved since the analog era.” He mentioned, “As digital transformation accelerates, the entire industry is rapidly being reorganized.”

Digital transformation also impacts companies’ strategies for utilizing the Global Value Chain (GVC). Lee Ji-hyung, Head of KOTRA’s North America Regional Office, evaluated the recent trend of ‘de-Chinaization’ as “not as fast as expected” regarding GVC restructuring, adding, “President-elect Biden will strengthen value chains with allies such as Korea by leveraging the Economic Prosperity Network to enhance the competitiveness of U.S. manufacturing.”

Regarding the U.S.-China trade conflict, Lee Ji-hyung conveyed, “Although China containment will continue under the Biden administration, unlike the Trump administration, solutions will be sought through alliances within international trade norms.” Park Han-jin, Head of KOTRA’s China Regional Office, also noted, “The Chinese government is paying attention to the Biden administration’s multilateralism,” and said, “China hopes to find a compromise with the U.S. within the framework of multilateralism.”

Professor Heo Dae-sik of Yonsei University presented ‘Rewriting GVC Strategy.’ He forecasted that “going forward, companies will optimize supply chains and create new business models by utilizing digital technologies such as big data and artificial intelligence (AI).” Professor Heo also anticipated that “due to the global Green New Deal policy trend, companies will increasingly build green supply chains.” He particularly highlighted Apple’s commitment to achieving 100% carbon neutrality in its supply chain and products by 2030.

Changes in trade order are also expected due to digital transformation. Professor Ahn Deok-geun of Seoul National University said, “As the digital economy’s share grows amid the U.S.-China hegemonic conflict, discussions on establishing new trade norms such as digital trade agreements will be activated.” He added, “If the power struggle among major countries over negotiation leadership continues, there is a risk of escalating into trade disputes.”

Jung Eun-mi, Head of the Korea Institute for Industrial Economics and Trade, stated, “With the spread of business models due to digital transformation, OTT, telemedicine, and internet education have emerged as promising industries,” and noted, “The increased demand for ICT technologies to implement non-face-to-face services should also be noted.”

KOTRA overseas regional heads from the Middle East, Africa, and CIS also said, “Although the scale of non-face-to-face industries including e-commerce in emerging market regions is not large, there is growth potential and favorable conditions for our companies’ entry such as the Korean Wave, so more attention is required.”

Kwon Pyung-oh, President of KOTRA, stated, “In line with the global digital transformation trend, KOTRA services are also transitioning to digital methods,” and added, “We will further strengthen support so that our SMEs and mid-sized companies do not face difficulties in digital transformation.”

This content was produced with the assistance of AI translation services.