77% of SMEs Hope to Expand Economic Exchange on the Occasion of the Korea-Japan Summit

[Image source=Yonhap News]

Eight out of ten small and medium-sized enterprises (SMEs) hope to expand economic exchanges with Japan following the recent Korea-Japan summit held in Tokyo.

The Korea Federation of SMEs announced the results of the "SME Korea-Japan Economic Cooperation Awareness Survey" conducted on 304 SMEs on the 29th.

Regarding areas of exchange with Japan (multiple responses allowed), 74.3% of the responding companies indicated exports, 16.8% imports, and 14.8% expressed a desire for future exchanges.

In terms of export sectors to Japan by SMEs (multiple responses allowed), materials and components accounted for 34.5%, machinery and equipment 29.2%, and stationery and daily necessities 16.4%, in that order. For imports (multiple responses allowed), materials and components were 56.9%, machinery and equipment 21.6%, and stationery and daily necessities 9.8%.

Since the Japanese government's export restrictions in 2019, 45.6% of the responding companies reported difficulties. The main challenges were decreased exports (21.4%), logistics disruptions such as customs delays (9.8%), supply disruptions of materials, components, and equipment (7.0%), and reduced technical and human exchanges (6.8%).

Following the Korea-Japan summit held in Tokyo on the 16th, 76.6% of the responding companies expressed an intention to expand economic exchanges with Japan in the future. Meanwhile, 23.4% responded negatively.

Among the areas expected to see revitalized economic exchanges (multiple responses allowed), export expansion was the highest at 84.1%. This was followed by expansion of human and technical exchanges at 14.6%, smoother logistics such as customs clearance at 12.9%, and smoother import of materials, components, and equipment at 11.2%.

The reasons for hesitation in expanding exchanges (multiple responses allowed) included decreased attractiveness of the Japanese market at 39.4%, completion of domestic production of raw materials at 19.7%, complicated customs procedures at 7.0%, insufficient digitalization of operations at 4.2%, and deterioration of Korean brand reputation at 2.8%. Other responses included "few transactions," "decline in price competitiveness," and "maintaining the status quo."

Regarding areas requiring cooperation or government support for expanding Korea-Japan economic exchanges (multiple responses allowed), support for market development in Japan was the highest at 65.5%. This was followed by expansion of exchanges by industry at 34.5%, cooperation in source technology, and cooperation in the digital content sector, each at 8.9%.

Joo Moon-gap, Director of the Economic Policy Headquarters at the Korea Federation of SMEs, stated, "Korea has a high need for economic cooperation with Japan, especially in the materials, components, and equipment industry. Korean SMEs in the SoBuJang sector require the source technologies possessed by Japanese companies, and since Korea also has many SMEs with advanced ICT and other technologies, active technical and human exchanges between companies in both countries are necessary."

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