Female SME Executives: "Nightmarish Serious Accident Punishment Act... Worsening Labor Shortage"

Deteriorating Business Environment for SMEs Affected Both Men and Women Equally
Female Entrepreneurs Discuss South Korea's SMEs
CEO Roundtable with Lee Jeong-han, Chair of Women Entrepreneurs Association, and Three Others

Female CEOs, including Lee Jeong-han, President of the Korea Women Entrepreneurs Association, are exchanging opinions on the 21st at BY Industry in Siheung, Gyeonggi Province. From the left, Park Sun-hee, CEO of Leaders R&D; Kim Geum-ja, CEO of Rollpack; Lee Jeong-han, President of the Korea Women Entrepreneurs Association; Kim Nan-sil, CEO of Metamix. / Siheung - Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kim Bo-kyung] We met with female CEOs running small and medium-sized enterprises (SMEs). In addition to SME management, we looked into the challenges and passion experienced by women entrepreneurs. They have built their businesses in harsh environments for as short as 5 years and as long as 35 years. Although their generations, industries, and business experience varied, their concerns were similar.

At banks where they went to get business loans, they heard remarks like "This is not a business for women" and "Isn't your husband the actual business owner?" Although these are now stories of the past, senior female CEOs still remember them clearly. Most difficulties faced as SME owners were not divided by gender. Familiar issues such as the Serious Accidents Punishment Act focused on punishment, the uniform 52-hour workweek system, chronic labor shortages, and difficulties in business succession were urgent matters for them.

Lee Jeong-han, CEO of BY Industry, started his business in 1988 as a small iron materials store (Baekyang Stainless Trading) and grew the company into a specialized metal sheet distribution and processing company with 60 employees and annual sales in the 10 billion KRW range. It remains a field where women are rare. From this year, Lee serves as the president of the Korea Women Entrepreneurs Association, representing women entrepreneurs.

Lee Jeong-han, President of the Korea Women Entrepreneurs Association / Siheung = Photo by Kang Jin-hyung aymsdream@

Rollpack, operated by CEO Kim Geum-ja, is the number one SME in the vacuum packaging equipment sector. Last year, 20 years after its founding, it achieved sales of 24 billion KRW. Over 80% of its products are exported overseas to the U.S., Europe, and other regions. Labor shortages in the overseas business division frequently put CEO Kim in difficult situations.

Kim Nan-sil, CEO of Suwon Stay, who has operated a residence for 14 years, is seeking a breakthrough to overcome the COVID-19 slump through blockchain-related startups. Park Sun-hee, CEO of Leaders R&D, a smart factory solutions company, is also active as an ISO certification auditor, demonstrating vigorous activity. At the end of last month, we met four female CEOs at BY Industry headquarters in Jeongwang-dong, Siheung-si, Gyeonggi Province.

"Common Challenges for SMEs: Business Succession, Labor Shortage, 52-Hour Workweek"

△Lee Jeong-han= Many middle-aged and older entrepreneurs who have gone through difficult times often say they feel disheartened. Due to the heavy inheritance tax burden, business succession is practically impossible. As a result, the perception that 'there is no need to work hard in business' is widespread. The social atmosphere where entrepreneurs are not respected and the gradual decline of foundational root companies in the industry are also concerning.

Kim Geum-ja, CEO of Rollpack / Siheung = Photo by Jinhyung Kang aymsdream@

△Kim Nan-sil= Even when receiving orders from overseas buyers, it is difficult to fulfill them under the constraints of the 52-hour workweek system. Labor shortage solutions and automation of production facilities should have preceded the introduction of the 52-hour workweek. The Serious Accidents Punishment Act is like a 'nightmare' for entrepreneurs. The law should be revised so that all employees share responsibility for industrial safety, not just focusing on punishing business owners.

△Lee Jeong-han= Young people spend years preparing for civil service exams or large company recruitment without income after graduating from university. How about creating a system where working 3 to 5 years in an SME grants additional points for employment in public institutions or large companies?

△Kim Geum-ja= Since last year, we have been trying to hire staff for the overseas business division, but it has been difficult. Overseas buyers are in their 30s, so hiring employees in their 50s is not feasible. Customized support is needed.

Kim Nansil, CEO of Metamix / Siheung = Photo by Jinhyung Kang aymsdream@

△Kim Nan-sil= After operating a residence since 2009, sales dropped to one-tenth due to the impact of COVID-19. After much consideration, we started a blockchain business and tried to recruit engineers, but faced difficulties hiring foreign students due to 'protection of domestic jobs' regulations. Improving the complicated foreign hiring procedures is urgent.

△Lee Jeong-han= We pay foreign workers wages above the minimum wage and also provide accommodation and meals. Visiting female entrepreneurs' workplaces, many bosses barely take home their own salaries. While large companies may hold performance bonus celebrations, SMEs struggle just to pay employee wages, let alone invest in equipment.

"ESG (Environment, Social, Governance) Management Sweeping Through SMEs"

△Park Sun-hee= The first step in ESG management is 'energy saving.' It is essential to monitor the amount of energy used when producing products. The government should actively support developing solutions that suppress or absorb carbon emissions.

△Lee Jeong-han= Public enterprises should lead by example in ESG management. This can be done by investing in improving poor workplace environments, such as installing dust collectors. Eco-friendly energy projects should proceed step by step.

Park Sun-hee, CEO of Leaders R&D / Siheung = Photo by Kang Jin-hyung aymsdream@

△Park Sun-hee= We also need to explore smart factory construction plans suitable for SMEs. Smart factories are a distant dream for SMEs with annual sales under 10 billion KRW. Manufacturing must jump forward through smart factories by enabling efficient inventory management, shortening delivery times, and enhancing product quality.

△Kim Nan-sil= Since manufacturing contributes more to job creation than other industries, government support benefits should be distributed evenly. Public hearings should be held in advance to gather diverse opinions.

△Kim Geum-ja= Nowadays, even one-person companies can export overseas online if they have ideas. In the past, the government focused on financial support, but now I hope there are more national institutions that help export companies develop products tailored to local markets through research and development (R&D).

△Lee Jeong-han= It would be good if experts with experience running SMEs took leadership roles in related government ministries or agencies.

△Kim Nan-sil= Members of the National Assembly should also engage in responsible legislative activities. Even if there are good ideas, businesses must close if they violate regulations. We must not crush the hopes of young entrepreneurs who pursue new businesses and dream of entering the global market.

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