The Business Opportunities for SMEs in the Global Era · Supporters: Small and Medium Enterprise...

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8th APEC SME Business Network Promotion Forum

The Business Opportunities for SMEs in the Global

Era

<Research Report>

Tuesday, December 13, 2005

Place: Takamatsu City

Organizer: Japan External Trade Organization (JETRO)

Co-Organizer: Kagawa Bloc Council, Japan Junior Chamber, Inc.

Supporters: Small and Medium Enterprise Agency, Kagawa Prefectural Government,

Takamatsu City, Takamatsu Chamber of Commerce and Industry, Shikoku Economic

Federation, Kagawa Association of Corporate Executives, Shikoku Small and Medium

Enterprises Entrepreneurs Association of Corporate Executives, Shikoku Branch of

Organization for Small and Medium Enterprises and Regional Innovation, Shikoku

Bureau of Economy, Trade & Industry,

March, 2006

Japan External Trade Organization (JETRO)

Forward

The APEC (Asia Pacific Economic Cooperation) forum was proposed by the

Japanese government at the 5th annual APEC SME Ministers Summit held in

September of 1998 in Kuala Lumpur and was officially approved as an APEC

contribution project of Japan. The 2005 forum is the 8th time the event has been held.

This forum aims for mutual understanding and the promotion of business exchange

between SMEs in APEC regions and hopes to create new business opportunities and

promote industry. Every year when the forum is held and survey is implemented in

APEC regions and compiled into a report.

The theme of this year’s survey is “The Business Opportunities for SMEs in

the Global Era” and was conducted in interview format to learn how SMEs were able to

expand their existing business and find new business opportunities amidst advancing

globalization and industrial exchange without getting caught up in conventional

corporate activities and operation/business methods.

We hope that SMEs in the APEC region will be able to acquire some ideas and

hints for new business opportunities through this report.

Lastly, we would like to sincerely thank everyone who was involved in the

making of this report for their cooperation.

March, 2006

Economic Research Department

Japan External Trade Organization (JETRO)

Table of Contents

Japan ....................................................................................................................................................5

Japan Ground water Development Co., Ltd. (Yamagata) ................................................................5

Watec Co., Ltd. (Yamagata) .............................................................................................................8

Sakamoto Urushi Manufacturing Co., Ltd. (Fukushima) .............................................................. 11

Kaken Geneqs Inc. (Chiba)............................................................................................................14

Tecnos Co., Ltd. (Nara City, Nara Prefecture)...............................................................................16

Laplace System Co., Ltd. (Yawata City, Kyoto Prefecture)...........................................................18

Riko Co., Ltd. (Tondabayashi, Osaka-fu) ......................................................................................21

Kaaz Corporation (Okayama) ........................................................................................................23

Iris Co., Ltd. (Tokushima)..............................................................................................................26

Nissan Tokiwa Co., Ltd. (Tokushima) ...........................................................................................29

Maruha Bussan Co., Ltd. (Tokushima) ..........................................................................................32

Swany Corporation (Kagawa)........................................................................................................35

Futec Inc. (Kagawa).......................................................................................................................38

Australia.............................................................................................................................................40

AUSTRADE (trade promotion agency).........................................................................................40

CIC Secure.....................................................................................................................................42

Canada ...............................................................................................................................................44

Business Development Bank of Canada（BDC）.........................................................................47

Dalsa Corp. ....................................................................................................................................45

Chile...................................................................................................................................................47

Asociación de Exportadores de Manufacturas de Chile A.G. (ASEXMA)....................................47

COSMETICA NACIONAL...........................................................................................................49

TRAVERSO S.A............................................................................................................................51

China..................................................................................................................................................53

ZXQYS (national development/reform committee for SMEs)......................................................53

Oceans Sports & Entertainment Marketing Ltd.............................................................................55

Beijing Tianzheng Information Technologies Co., Ltd. ................................................................ 61

China/Hong Kong...............................................................................................................................63

Hong Kong Small and Medium Enterprises General Association（HKSMEGA）......................63

Trade and Industry Department, Hong Kong SAR Government....................................................64

Indonesia.............................................................................................................................................65

Ministry of Cooperative, SME........................................................................................................65

Java Dini Art....................................................................................................................................67

PT Putrabali Adyamulia...................................................................................................................68

Terracotta Indonesia.........................................................................................................................69

South Korea .......................................................................................................................................66

Small and Medium Business Administration.................................................................................66

Nobtech Co.,Ltd.............................................................................................................................71

Malaysia..............................................................................................................................................80

Small and Medium Industries Development Corporation（SMIDEC）........................................80

Zeito Plastic Components Sdn Bhd.................................................................................................82

Mexico.................................................................................................................................................84

Underministry for Small and Médium Enterprises/Ministry of Economy......................................84

Red Interamericana de Comercio (RISCA) ...................................................................................84

New Zealand........................................................................................................................................89

New Zealand Trade and Enterprise..................................................................................................89

Interactive Technologies Ltd（ITL）……………………………………………………………..92

New Zealand Pharmaceuticals（NZP）……………………………………………………….…. 94

Peru.................................................................................................................................................. ..93

PROMPYME (El Centro de Promoción de la Pequeña y Micro Empresa; small/mini

company promotion center) ...........................................................................................................93

Alpa Exportaciones (Alpa Export Company) ................................................................................95

Consorcio Artesanias MERINO S.A.C. (Merino).......................................................................96

Philippines.........................................................................................................................................101

Department of Trade and Industry-RegionXI................................................................................101

HUBPORT INTERACTIVE INC. ................................................................................................103

Lane Systems Inc...........................................................................................................................105

Russia...............................................................................................................................................104

OPORA (National Russian SME Association) ............................................................................104

Ministry for Economic Development and Trade of the Russian Federation................................106

Medpharmservice.........................................................................................................................108

Singapore...........................................................................................................................................114

International Enterprise Singapore................................................................................................114

Ya Kun International Private Limited............................................................................................119

Chinese Taipei.................................................................................................................................. 118

Industrial Development and Investment Centre, Ministry of Economic Affairs.......................... 118

Small and Medium Enterprise Association, Ministry of Economic Affairs.................................120

Taiwan External Trade Development Council (TAITRA) ...........................................................122

Moxa Technologies Co., Ltd........................................................................................................124

Triad International Corporation ...................................................................................................126

Thailand.............................................................................................................................................133

Office of Small and Medium Enterprises Promotion（OSMEP）...............................................133

SME Trade Promotion Co., Ltd. ...................................................................................................134

United States of America...................................................................................................................135

US Market Access Center（formerly known as International Business Incubator）...................135

GeoVector ....................................................................................................................................133

Vietnam............................................................................................................................................136

Agency for SME development-ASMED .....................................................................................136

Ha Tran joint Stock company（A-Design）.................................................................................143

5

Country: Japan - SME

Company Name Japan Ground water Development Co., Ltd. (Yamagata)

Industry Non-sprinkling snow removal, boring construction, soil/ groundwater

remediation

No. of employees 190（Including related companies）

Overseas offices None

Company URL http://www.jgd.co.jp

1. Overview of foreign exports and imports, domestic transactions with foreign companies,

cooperative relationships with foreign companies (entrusting of production, sales contracts,

etc...), or expansion into foreign markets, etc...

JGD is proud to hold 50% of the market for the sale of non-sprinkling snow removal systems

for melting snow on roads, etc... While continuing this core business, JGD also formed a

collaborative business pact with Walsh in the US and introduced technology that has enabled us to

engage in the remediation of contaminated soil and ground water. Through long term training at

Walsh when the agreement was formed, annual employee training at Walsh, and the invitation of

Walsh employees to speak at lectures in Japan, JGD has obtained know-how and technology

related to the decontamination business, an industry that does not exist in Japan. As a result of

recent improvements environmental awareness and the establishment of environmental laws, etc...,

the number of requests JGD receives for decontamination work is steadily increasing. The

technology JGD introduced from Walsh received much praise at The 2005 Global Environmental

Protection: Soil and Ground Water Remediation Technology Expo held at Tokyo Big Site and was

have received business inquiries from end users who up until now we have not done direct

business with.

2. Background and business decisions (reason, considered risk, forecast of success, etc...)

leading up to formation of your business

JGD met Walsh in 1997. At the time, employees were dispatched to the JETRO Denver, CO

office, a sister city of Yamagata prefecture, and JGD had been looking into how they could

develop each others' business prospects. It was a time when environmental issues were starting

to gain attention in the prefecture and as a Yamagata Prefecture project, JGD was dispatched to

Denver and was introduced to several environment related companies. One of these companies

was Walsh.

The sale of non-sprinkling snow removal systems is largely dependent on public works.

Therefore at the time, JGD had been searching for a new industry in which they could make use of

their technology. Meanwhile, Walsh had been expanding overseas since 1992 and while they had

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succeeded in entering the Japanese market in the same year (a bio-soil remediation project with

The Japan Research Institute, Limited), they had been searching for way to gain a better foothold

in the market. Since it was deemed that cooperation between the two companies would be a good

thing, they signed a collaborative business agreement in 1998. The training that JGD (4

employees) received for six weeks at Walsh after the signing of agreement was extremely detailed

and was a large asset to them.

3. Problems you experienced around the time you started business and how you solved those

problems (personnel deficiency, establishment of internal systems, deficiencies in

information gathering, capital procurement, language barriers, etc...)

The soil remediation technology using horizontal wells that JGD received from Walsh was not

being used in Japan. As a result, JGD had problems such as at times not being able to use the

machinery in confined spaces found often in Japan. In addition, since the soil remediation business

was a new area for JGD at the time there were not a lot of people who knew about it and we did not

get many business inquiries. However, JGD increased awareness by inviting Walsh to come speak

in Japan and its ground water remediation technology gradually got a good reputation as a result of

their competitiveness that was achieved through the technology obtained from Walsh. Furthermore,

the fact that JGD had this technology meant that the trust in their technology increased and they

experienced an indirect benefit of receiving more business inquiries in the other industries they are

engaged in.

However, it is common practice in Japan for a consulting company to be liable for the work that

they implement in regards to that consulting and since there are no clients who will not pay for just

consulting work Walsh's entrance into the Japanese market has not gone as they had hoped.

4. The existence or nonexistence of public support during these times (please explained in

detail if you did receive support)

Nothing in particular.

5. Reason for success of your aforementioned business

At a time when environmental issues were gaining more and more attention, JGD focused their

attention on environmental technology before other companies and formed a relationship with a

foreign company that had such technology. After that, as a result of the enactment of the Soil

Remediation Law in 2003, it became a requirement to implement a soil survey in the case of

transferring land once used for factories that had used specific harmful substances, to the public.

After the enactment of this law JGD saw an increase in business inquiries from banks who had

acquired real estate as collateral and also from real estate companies who sell land, etc..., and they

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think they will continue to increase. When enacting this law, since the environmental ministry had

selected over 2000 companies as certified survey organizations, competition became quite fierce.

At present they are seeing companies that do not have good technology being gradually weeded out.

Since JGD’s technology is different from that of other companies, and since they have high

competitiveness from the standpoint of cost, they think that they will be able to survive this fierce

competition. In addition, in 2005 JGD linked technologies with a consulting company that has rich

know-how in the area of soil remediation measures, In Situ Solutions Co., Ltd., and are busy

improving their technology.

6. Future expansion of your business and your company's vision

The public works industry has been showing a tendency to shrink as of late and while JGD is

trying to strengthen their sales directed at the private sector, profits from non-sprinkling snow

removal systems are dropping. Presently, sales from non-sprinkling snow removal systems account

for about 80% of their total sales revenue which is 3.56 one billion yen (August, 2005), and hot

spring excavation and soil remediation business accounts for 20%. Annual sales revenue for their

solar remediation business is approximately 100 million yen, but what they aim to expand that to

300 million yen and make their sales ratio 7:3.

It is expected that the soil contamination survey/remediation market will greatly expanded the

future (according to estimates by the Soil Environment Center in the year 2000, a 13.2 trillion yen

latent market exists. However, these figures were calculated based on the number of latent

contaminated sites and also includes sites that are not required by law to be surveyed or remediated.),

and JGD expects that their business will expand accordingly.

8


Company Name Watec Co., Ltd. (Yamagata)

Industry Manufacture/sale of ultra-small CCD cameras

No. of employees 58

Overseas offices US, Taiwan, China

Company URL http://www.watec.net（Overseas）

http://www.watec.co.jp (Domestic)


cooperative relationships with foreign companies (entrusting of production, sales

contracts, etc...), or expansion into foreign markets, etc...

Watec sells small CCD cameras to 60 countries all over the world and overseas sales accounts

for approximately 80% of their 1.2 billion yen in total annual sales. Their products are not only

widely used all over the world, but are also utilized for security in such places as banks, museums,

police stations, government agencies, department stores, etc..., and in many different fields, an

example of which is test use on rockets. At present, they do not sell our products through a

commercial establishment and have sales offices in the US and Taiwan, and a representative office in

Beijing.



Watec was established in 1987 by approximately 10 specialists including a president who had

worked in the camera related industry. At the time surveillance cameras used TV tubes and were

quite large. They succeeded in developing small CCD cameras by replacing TV tubes with CCD and

miniaturizing internal circuitry. Because of their small size these CCD cameras can be used not only

for surveillance but for many other purposes as well.

These small cameras were attached to the helmets of skydivers at the opening ceremony of the

Seoul Olympics and broadcasted images to the entire world. As a result Watec received many

business inquiries from overseas. Since at the time Watec only consisted of engineers, they engaged

in overseas sales through a corporate firm without knowing anything about sales methods. After this,

in an effort to strengthen their overseas sales, they established a subsidiary in the US with the help of

corporate firms in 1990. After breaking ground in the US, Watec actively engaged in expanding

overseas by establishing a subsidiary in Taiwan and a representative office in China. Furthermore, at

the time Watec had been engaged in OEM supply, but not anymore.


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problems (personnel deficiency, establishment of internal systems, deficiencies in information

gathering, capital procurement, language barriers, etc...)

Since Watec mainly targets overseas markets they have applied for patents overseas with regards

to fundamental technology, including patents related to miniaturized circuits for CCD cameras.

However, since they cannot establish a law department due to cost issues, it is difficult for Watec to

follow up on pirating countermeasures and they have suffered much damage from pirated products

in Taiwan, and Korea, etc... Recently they have heard that pirated products produced in China are

also in the market. Since pirated products cannot compare to our products in terms of quality they

continue to receive business inquiries from those users who understand our technology, but pirated

goods are still a problem.

Watec used to have our headquarters in Kawasaki City, but moved it to Tsuruoka, the birth place

of our current president, in 1995. Since they mainly deal with overseas clients they did not anticipate

that moving their headquarters to a more remote area would cause major problems. But, in reality

they did encounter many problems. Customs clearing and distribution is not convenient but their

biggest problem is a lack of personnel. Is very difficult for Watec to procure engineers that can

engage in creative development, personnel needed for overseas sales, and also personnel needed in

the creation of catalogs (designers, copywriters, translators, etc...). As a result of these problems,

they think that we may have no choice but to establish an office in Tokyo in the future.



Yamagata prefecture introduces Watec on their company PR homepage. In addition, in regards

to recruiting engineers, marketing, and development, etc..., Watec is deliberating gaining assistance

from the Organization for Small & Medium Enterprises and Regional Innovation, JAPAN, Tohoku

(Sendai).


In the security related business, most leading corporations sell a whole security system that

includes cameras as one part of that system. As a result, there were no leading manufacturers that

were engaged in miniature CCD cameras. That is why at the time, Watec decided to focus their

energy on the new technology that was CCD and had the foresight to develop the world's first

ultra-miniature CCD camera. In contrast, systems are not sold as a whole overseas, and consulting

companies select cameras, etc..., depending on the circumstances, so as a company that specializes in

miniature CCD cameras, Watec became quite highly evaluated. The fact that they are very

meticulous in their development of miniaturized CCD cameras is the reason why their technology

became the “only one” in this field. Watec’s desire to “perfect technology” continues to this day, and

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they are developing CCD cameras to be installed in man-made satellites and hot air balloons that fly

at an altitude of 20 kilometers for university, etc..., experiments. While these developments do not

directly link themselves to the market, they do believe that the reliability of their products to

withstand extreme cold and the harsh environment of space will serve to heighten the reputation of

their technology.


Watec desires to continue to expand their overseas business. They expanded their subsidiary in

New York and aim to locally incorporate their representative office in China. In Europe, especially

since the formation of the EU, since the market has become unified, the elimination and

consolidation of companies in each country that they had been entrusting their sales to continues,

and each sales company has taken it upon itself to engage in cross-border sales. With this type of

situation, it is not impossible that they may lose the trust of their users by entrusting their sales to

companies in each country in such a disordered fashion. Europe accounts for 25~30% of their

profits, and they plan to establish an office/subsidiary in Europe in the future that can collectively

handle their business.

In addition, in regards to manufacturing/development, Watec continues to examine how they can

increase their production efficiency in Japan, a country where employment costs are high. They have

no plans to move production overseas.

11


Company Name Sakamoto Urushi Manufacturing Co., Ltd. (Fukushima)

Industry Manufacture/sale of Urushi and Urushi ware. Planning/sale of industrial

products that use Urushi.

No. of employees 30


Company URL http://www.eyes-japan.co.jp




After starting business by offering lacquer processing services to the fountain pen manufacturer,

Parker, they were able to collaborate with many foreign corporations on products such as utensils

made by Crystal and the interiors of airplanes made by Boeing and have succeeded in applying

lacquering technologies to industrial products. Their lacquering technology is used for many

industrial products such as on the outside of note PCs, cameras, mobile telephones, CD players, and

lighters, and for car interiors, etc...

In addition, Sakamoto Urushi’s technology/design potential was international acclaimed when

their creation, “Happening”, an exhibit designed entirely out of lacquered cardboard and shown at

overseas trade shows, received the New York Museum of Modern Art’s Design Award and was

added to its permanent collection.



Sakamoto Urushi was originally a lacquer wholesaler, but when their current president inherited

the business 30 years ago he felt that it was necessary to produce something in order to aim for

stable business. Before WWII, since lacquer was economically controlled as a military substance, if

you look at industrial statistics you will see just how utilized it is. According to these statistics,

70~80% is used in industry, so he thought to apply lacquer to industrial products.

Sakamoto Urushi had not originally planned on marketing their product overseas, but Japanese

companies at the time could not grasp the concept of putting high added value on lacquer. Just

around that time, (1980’s) the fountain pen maker, Parker, was having trouble with pirated products

in China. In order to combat this, Parker aimed to increase the quality of their products, and this

thinking matched Sakamoto Urushi’s strategy and ideas at the time to use lacquer to increase added

value, so they engaged in co-development of a lacquered fountain pen. With the success of this

lacquered fountain pen, the reputation of Sakamoto Urushi’s technology spread by word of mouth

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and interest in lacquer work from overseas manufacturers started pouring in.




The thinner added to lacquer can be procured virtually anywhere and in consideration of

transportation costs it is cheaper to procure it locally. Regardless however, high-quality product

manufacturers in Europe insisted on purchasing it from Sakamoto Urushi. At the time they were

perplexed as to why European companies were so particular in their traditions, and learned a lot.

However, exporting thinner turned out to be quite troublesome due to the restrictions involved.

When Sakamoto Urushi received a request to do the interiors of first class from a US airplane

manufacturer they encountered difficulties with the strict heat-resistance tests imposed by the US

Federal Aviation Administration. However, since these restrictions were so rigorous they did

encounter the benefits of having their technology highly praised and seeing entrance by other

companies fall to the wayside, so they can’t categorically say that harsh restrictions were a bad thing.



Sakamoto Urushi developed technology for melting metals such as aluminum which is quite fire

retardant and evenly spraying lacquer on the surface of FRP (fiber reinforced plastic) used in the first

class interiors of airplanes, however this industry became a certified industry of the SME Creative

Endeavors Promotion Act of 2002. This technology was chosen in 2005 as the recipient of the

“Japan Prize for Creativity” given by the Minister of Economy, Trade and Industry.


From the moment they started making things, Sakamoto Urushi decided that they “were not going

to make anything that could be made overseas” and aimed for high-added value through creation of

their own technology. This is because the current president traveled to Taiwan to undergo lacquer

training and felt that, “we will not succeeded if we are doing the same thing” when he came in

contact with the local artisans. This attitude remains unchanged and this unwavering ideal is one

reason why they have succeeded in becoming an internationally praised “only one corporation”.

In addition, always doing business with foreign companies through commercial firms led to their

success. By entrusting all other matters to others, they have been able to concentrate on the

development of their lacquering technology which is their main business. When negotiating with

foreign companies commercial firms act as a buffer which enables smooth transactions.

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Through doing business with foreign companies, Sakamoto Urushi learned from traditional

European craft manufacturers that the secret to success is balancing industrial products and

traditional crafts. The successful European traditional craft manufacturers are the ones who have

retained a traditional craft as their core business and apply it to industrial products. Sakamoto Urushi

continues to secure profits by applying their technology to industrial products while pursuing the

“beauty” of traditional craft technology.

They do not limit their transactions to overseas, however when applying lacquering technology to

industrial products they do employ a collaborative strategy with leading manufacturers. This is

advantageous for them in order to put their energy into lacquering technology. In actuality, recently,

they have formed partnerships with Japanese leading appliance manufacturers and plan to exhibit

appliances in foreign trade shows. In addition, even if the collaboration is with a domestic

manufacturer, in the end these partnerships with leading companies target the entire world. In

addition, due to the nature of their products they are not considering entrance into any other foreign

markets except the present Europe and the United States.

14


Company Name Kaken Geneqs Inc. (Chiba)

Industry Manufacture/sale of DNA microalley, etc.., chips and subcontracting service;

development/manufacture/sale of bio-devices, gas injection molding devices,

nitrogen generating devices, etc...

No. of employees 26

Overseas offices Sales through agents

Company URL http://www.kakengeneqs.co.jp




Geneqs develops/manufactures/sells bio-related devices such as gas injection molding devices

that inject high pressure nitrogen gas and maintain uniform pressure during the injection molding of

resin, and devices that manufacturer chips (microarray) that analyzed DNA and protein information

(microarrayer), etc....

In the beginning of 2004 they had their first order for a gas injection molding device from China.

In only two years since then exports have expanded rapidly and at present one third of their sales of

gas injection molding machines comes from overseas.



Since the domestic sale of the same devices has dropped with the moving into far markets of

automobile, appliance, and OA device manufacturers, Geneqs’ principal clients for injection molding

devices which is their main product, the company decided that they could not survive by only doing

business domestically and started entering foreign markets in 2003. After gathering information on

firstly China, and ASEAN countries, they fixed their sights on clients who they felt had a demand for

gas injection molding devices from amongst Japanese based companies in foreign markets and the

president and sales manager traveled to each country to actively engage in sales activities.




The company had no information and faced language, legal, and cultural barriers. They became

painfully aware that offering after service maintenance when selling machinery and overseas is the

largest need of the customer, but had much trouble in finding an agent that could perform the

15

maintenance.



They participated in JETRO seminars and conventions and gathered overseas information on

China and the ASEAN countries, etc....

When traveling on business trip to China, a current JETRO adviser fluent in Chinese accompanied them as a specialist, as part of support from the Chiba Prefecture Industrial Promotion Center, in order to provide help with negotiations.


Their overseas sales performance up to now is the result of the sale of gas injection molding

devices to Japanese corporations and is viewed as domestic performance.


Their future goals include entrance into foreign bio fields and the expansion of sales channels by

reaching out to local customers. They would like to sell state-of-the-art bio devices to research

institutions in Singapore, China, and Korea, etc.

With sales through an agent, the agent is not going to always be putting energy into just our work,

so ideally it would be best to engage in direct sales. While we search for agents in each country

that we can continue to trust, we also continue to deliberate on how we enter foreign markets.

Our president's motto is, “unleash unlimited knowledge and continue to create corporate profit.”

16


Company Name TECNOS Co., Ltd. (Nara City, Nara Prefecture)

Industry Development/manufacture, etc... of liquid crystal evaluation devices

No. of employees 43


Company URL http://www.tecnos-netc.co.jp




Established in 1990. 60 million yen in capital, 900 million yen in sales. Developed a liquid

crystal optical characteristic evaluation device that can measure the view angle, brightness, and

response speed, etc., of liquid crystal displays in 1993. Samples were highly praised by leading

liquid crystal manufacturers and they succeeded in deliveries to leading manufacturers in the same

industry thereby solidifying their business foundation. Developed a liquid crystal integrity testing

device used to evaluate defective lighting and liquid crystal displays, etc., in 1997 continue the

development and production of liquid crystal related testing devices such as a liquid crystal film

thickness Mura testing device, etc. during the year from 2000 to 2001. In 2001 they established

their own research center within Kumamoto University, one of their research partners, and is

presently considered a leader in the world of partnering industry with the world of academia.

Overseas transactions began with the sale of an optical characteristic evaluation device to a

Taiwanese corporation a few years ago. They formed sales agent contracts in Taiwan, Korea, and

China. They also plan to establish their own office in Taiwan and Korea in the future. Out of 10

liquid crystal manufacturers that used to exist domestically, all but one have moved their production

overseas in recent years. Their foreign sales share is presently approximately 60%, and they aim to

make that approximately 80% in the future.



President Yaedzu was in charge of the AV business at a leading electronics manufacturer when he

started to question the future of that business and suggested entering the new field of scanners. But

when his proposal was rejected, that rejection was one of the factors that led him to retire from the

same company at age 46 and go independent. Using experience and connections he had at the time,

he started excepting research work from leading manufacturers. In 1992 he succeeded in

developing a full color scanner which led to the establishment of his business. After that, he

entered the field of liquid crystals which was forecast to be a rapidly growing industry in the future

17




The full color scanner developed in 1992 employed state-of-the-art technology at the time, and

commercialization was abandoned when it was determined that one billion yen of investment was

necessary. They were forced to sell the technology to a leading manufacturer. After that, the

company put as much of their energy as possible into employing a product development strategy that

put emphasis on the needs of the customer.



1996: Business Certified by Ministry of International Trade and Industry in accordance with the

SME Creative Endeavors Activities Act

2001: Certification of new business field development implementation plan by Ministry of the

Economy, Trade, and Industry in accordance with New Business Creation Promotion Act.


Their outstanding technological power through collaboration with universities, and there sales

position which meticulous responds to the needs of the consumer has led to high praise from

customers.


With the recent explosive expansion of the liquid crystal market, and increasing size and

resolution of liquid crystal displays, the expectation for products from this company that aims for

original and precise technological development that leading companies cannot do, is high. In

addition, through his experience as a special lecture at universities, etc., president Yaedzu has great

interest in the nurturing of young engineers. Concerned with how students must put so much

energy into part-time jobs, he aims to convey to students the importance of research and

development through collaborative research with universities, etc.

18


Company Name Laplace System Co., Ltd. (Yawata City, Kyoto Prefecture)

Industry Development, etc... of solar energy measuring and simulation software

No. of employees 26

Overseas offices Germany (Freiburg), US (Silicon Valley)

Company URL http://www.lapsys.co.jp




Established in 1990. 22 million yen in capital. Main business includes the development/sale of

measurement systems, simulation software, and display systems, etc., related to recyclable natural

energy reduction such as solar energy, etc. Pioneered a new market in 1997 with the development

of solar energy measurement software called “Solar Link”, and solar energy output simulation

software called “Solar Pro”. Sell to various clients such as domestic mainstream solar energy

module manufacturers, House manufacturers, construction companies, and government agencies,

etc., and the number of units of “Solar Link” that have been established as expanded to

approximately 600 places (domestically). As a result of having “Solar Pro” receive high acclaim in a

trade magazine that introduces new German energy technology, as the only software that can do

advanced three-dimensional shadow analysis in January 2001, in 2003 Laplace Systems exhibited

their technology at an international solar energy exhibit called “Intersolar” held in Freiburg. They

established an office in Freiburg in 2004 and are working to pioneer the European market. In 2005

they opened another office in Silicon Valley in the United States. They also have sales agents in

Korea, Taiwan, Thailand, and Italy.



When the company was first established it was involved in undertaking science and technology

related measuring software work such as construction and textiles related work, but as concerned for

the environment grew the started receiving more requests to do measurement software work related

to solar energy from around 1995 and felt that if they were to standardize and sell their own

independent software that the market would have more than enough potential to grow. President

and founder, Mr. Horii, specialized in mechanical engineering and before going independent

developed software for videogame manufacturers. He has a unique presence in the new field of

fusing science and technology related to accurate measuring software with easy-to-understand

software that emphasizes visuals.

19




Entrance into the German market was the result of active enticement from Freiburg city and a

move to the city was preempted by much buzz. Market research, the fostering of sales

representatives, study of Europe's distinctive distribution channels (in particular Germany), and how

to go about doing business at exhibitions are future issues to consider.



2001: Certification of business by Ministry of the Economy, Trade, and Industry in accordance with

New Business Creation Promotion Act.

2002: Was certified to receive creative technology research development subsidiaries from Kyoto

prefecture.

2003: Adopted as SME General Business Group R&D consignment theme

2005: Adopted as Japan External Trade Organization (JETRO) “Venture Incubation in USA”

project.


As concern for environmental issues grew, from the middle of the 1990s solar energy started to

gain attention as a renewable energy source and the solar energy market for government agencies

and homes grew. Software for simulating and predicting the amount of solar energy output and the

software that actually measures the performance of power generation systems actually installed adds

3-D animation to the companies unique accurate data measurement performance and is characterized

by display functions that are easy to understand just by looking and have received high acclaim in

niche fields in the measurement software market.


Domestically, since the market for environmental education is expected to grow, Laplace Systems

is engaged in developing teaching materials for schools that uses their characteristic technology that

is “easy-to-understand by looking”, and also in the information transmission station field. Overseas,

the US market is their next target and there presently pioneering that market with an emphasis on

California State. In the United States, awareness about environmental issues exceeded the

company's predictions and in addition to a strong demand to avoid risk in the wake of last year's

soaring oil prices and the energy crisis that occurred a few years prior, the fact that a support system

20

for venture companies like Laplace Systems is in place will give them the push from behind that is

needed.

21


Company Name Riko Co., Ltd. (Tondabayashi, Osaka-fu)

Industry Manufacture/sale of industrial floats and level switches

No. of employees 130


Company URL http://www.riko.co.jp




Riko is the world's second-largest dedicated manufacturer of industrial floats and produces

approximately 36 million units annually. 60 million yen of capital, and this term is sales revenue is

expected to be approximately 1.2 billion yen. Products are widely used in many things from

automobiles, motorcycles, ships, airplanes, and industrial machines, etc., to personal fan heaters, etc.,

to devices that measure amounts of remaining fuel, and in FA automated lines, etc. Products are

sold overseas in 30 countries/200 companies, and exports account for approximately 30% of sales

revenue. Overseas sales are done directly with Germany, France, Czechoslovakia, the US, and

India, etc. Whereas they deliberated overseas production in China and Vietnam about three to four

years ago, since the risks associated with building a factory were to great, they decided to expand

their present factory at headquarters. Whereas production in developing nations is attractive from

the point of view of using local personnel in labor intensive processes such as product inspections,

and inspections, it was judged that the risk was too great due to the large amount of facilities

investment needed for float production. However, they have left themselves room to examine

technological partnerships and mergers with corporations in developing nations in the future.



President Umezu, who had been working for a synthetic rubber manufacturer, went independent in

1965 and established Riko. At the time the company was selling products from other companies, but

after learning about the product called “floats” in-house production was started two years after

establishment. They succeeded in developing a high-quality float called the “rigid closed-cell foam

float“ made from mostly NBR (synthetic rubber) that is superior in endurance, oil resistance and

processing and entered the market. In 1970 their product was adopted in the oil stove market and

their sales share increased. As a result of demand from markets with small lots and many varieties,

Riko was able to accumulate know-how and gradually improve their technological ability.

Currently, approximately 20 to 25% of the automobiles produced in the world (approximately 64

22

million cars) use Riko floats.




When Riko entered the market there were about 15 competitors and since it was not easy to

increase sales as a generic manufacturer, they searched for a way into foreign markets and started

exporting to Europe and United States in 1983. In addition, since floats are low in unit price and

have thin margins, Riko entered the level switch market that uses floats at the same time and

increased added value.





Currently they have only one domestic competitor and that company has moved production to a

developing nation. While other companies in the same industry handle a wide variety of synthetic

rubber products, Riko’s main reasons for success are that they specialized full production by

concentrating capital, personnel, and technological ability, quickly entered foreign markets and

expanded sales channels, actively increased added value by developing products that could be used

in level switches, internally developed an automated lines for their own factory, etc., and engaged in

efficient investment, etc.


Compared with 20 years ago, the unit price of a float for measuring fuel in an automobile is

approximately half the price, and the market is demanding a further reduction in prices. Their

future strategies include increasing efficiency, expanding the level switch field, and pioneering the

North American market and the Chinese/Southeast Asian/Indian markets that are showing

remarkable growth.

23


Company Name Kaaz Corporation (Okayama)

Industry Lawn mowers, cutters, automobile tuning parts, golf clubs


Overseas offices Taiwan

Company URL http://www.kaaz.co.jp/




Currently, overseas sales accounts for approximately 80% (of that, 60% is sold to Europe) of the

total 9 billion yen in sales from cutters and lawn mowers which are Kaaz’s main products. As a

result, they are always aware of sales overseas when developing products, have obtained

international safety/environmental standards such as the EU’s “CE Marking” and the US’s “ANSI”

and as a result of their dedication to quality and their sales initiative, the “KAAZ brand has received

extremely high praise overseas being chosen “Performance #1” by a trade publication survey in the

UK and the US, and “Recognition No. 3” by a French trade publication.



Kaaz Corporation was founded in 1922 by the father of the current president, Mr. Kazunari

Katsuya, and manufactured engines for agricultural use under the name “Doi Industries” and was

one of the leading domestic manufacturers in that industry. When president Katsuya joined the

company in the 1960’s the agricultural engine industry was in trouble as a result of large companies

taking control, so Kaaz started a new business in the field of cutters and lawnmowers, their present

main products. President Katsuya says even today that, “instead of engaging in low profits and high

turnover by being a subcontractor for larger companies, it is important for an SME to engage in

development, manufacturing and sales and to be competitive by producing a product under your own

brand that has high added value”. When he first visited Europe, President Katsuya got a lot of ideas

from overseas brand cutters and lawnmowers he saw on the market, developed his own product

through trial and error and entered the same market in Japan, which was a niche market, with his

own quality brand product.

However, in Europe and the US there are a lot of houses with yards that need daily upkeep and

cutters and lawnmowers gained popularity to the point where every household had at least one,

whereas in Japan, where there are not many houses with yards, the demand was limited. Impressed

with the designs and colors of products he saw in Europe, President Katsuya became infatuated with

24

overseas markets and when becoming president in 1970 immediately turned his eye to the foreign

market, single-handedly researched sales channels in every country in Europe, busily engaged in

sales to agents and eagerly sought to gain demand for his products through exhibitions at overseas

trade shows.




In the 1970s when Kaaz entered the cutter and lawn mower market, the Japanese government had

just started to earnestly promote exports and it was not easy for SMEs to pioneer overseas sales

channels. However, as represented by its highly durable body, Kaaz’s products were from 20 to

30% more expensive then products from European and US manufacturers as a result of Kaaz’s

pursuit of high-quality, and it took time and a lot of perseverance to get overseas markets to

understand just how good they are.





President Katsuya says, “It takes at least five years to develop a new product and get it selling

well. Therefore, during their time at the company each employee may only be involved in about

five to six projects of which if only half succeed would be a good thing. That is why employees

must not be afraid to fail, and must engage in their work with passion.” He also states, “you can start

anything if you always do work at your desk. You always have to be looking at new things and

hearing the opinions of the user and have the awareness to be able to use that in future work,” which

is why the president and employees spend much time and cost to go to domestic and international

exhibitions and sales clients.

The success of overseas sales of Kaaz can be mainly attributed to a strong passion for quality

and for their own products, constant movement, and the fact that president Katsuya’s belief of

always having to try new things is conveyed to the employees.


Kaaz is also actively challenging itself in new fields in addition to its main force cutters and

lawnmowers. The transmission for Kaaz’s lawnmowers is supplied to lawnmower manufacturers

in Europe and United States, and it is number one in terms of share in the world in that field. In

25

addition, Kaaz is leveraging the technology gained from their lawnmower transmissions and has

entered the fields of differential gears for racing cars, etc., and tuning parts with the eldest son and

Executive Director Masakazu Katsuya leading the way. Currently, sales revenue from these fields

is only about 5% of total sales revenue, however Kaaz has exhibited at the world's largest

automobile parts trade shows, “EQUIP AUTO 2003” (Paris, France, 2003), and “Automechanika

2004” (Frankfurt, Germany, 2004) (JETRO, Okayama prefecture, and Okayama Prefecture Industrial

Promotion Foundation had a joint booth), is excavating agents in Europe through these trade shows

and gradually increasing their sales in foreign markets in these fields. In addition, recently they have

also entered the golf club market.

26


Company Name Iris Co., Ltd. (Tokushima)

Industry Manufacture/sale of women’s undergarments

No. of employees 24, Domestically

Overseas offices China (Shanghai, Xian) (7 companies in all)

Company URL http://www.jp-iris.co.jp




Iris, an undergarment manufacturer whose main products are women's shorts, and brassieres, etc.,

led other undergarment manufacturers in 1991 and entered the Chinese market. In the end of 2002

they finished transferring their production function to China and kept only their headquarters,

planning/development, and sales departments in Japan. OEM (original equipment manufacturing)

supply to domestic leading undergarment manufacturers accounts for 70% of products, and

approximately 30% of Iris’s products are sold in the Chinese market. They pioneered the Chinese

market early on and have 140 direct sales offices in apartment stores in every region such as

Shanghai, Tianjin and Beijing, etc. In China, in addition to their main business they also are

engaged in the car-rental and repair business, taxi business, real estate development, and livestock

pharmaceutical manufacturing with a group corporation of seven companies being run in Shanghai

and Xian. Annual sales revenue for August 2004 was approximately 2.2 billion yen.



Located in a rural area with a small market, Iris desired to engage in OEM supply to large

manufacturers from the time of its establishment, and acquired orders from Gunze and Wacoal by

brining in independently developed undergarments.

However, when there price competitiveness in the domestic sewing industry dropped upon

entering the 1980s, Iris began deliberating on moving their production overseas. In 1984 they started

entrusting manufacturing to Korea and Thailand and shifted production to China which became low

cost after the rapidly appreciating Yen, and then to Shanghai, Guangdong and Tianjin from 1988.

Based on this experience, Iris established there 100% subsidiary Shanghai Iris Clothing Co., Ltd. in

1991 and started production in 1992. The entrance into Shanghai was due to confidence in the

expansion of development plans for the Pudong region announced in 1990. Entrance by Iris was

greatly welcomed by the city of Shanghai since it was a time when foreign investment and activities

had dropped dramatically due to repercussions from the 1989 Tiananmen Square incident and

27

running of the business was quite smooth.

They started local sales in 1993 and opened up direct sales stores in Isetan. Since investment

was approved under the conditions that it be over 70% in exports, and under 30% in domestic sales,

Iris had from the very beginning been thinking about local sales. They opened up direct sales

stores in department stores in areas such as Tianjin, Beijing, Wuhan, Halpin and Changsha and grew

to have 140 stores nationally.

In China, in parallel with their main business, they engaged in other fields as mentioned earlier. In

every field they took ideas from local partners and started business by merging with those partners.




While Iris’s business in China is diversified it is also being constantly organized at the same time

and six companies have already been closed. There are times when companies must be closed as a

result of certain circumstances involving the partner, but the main reason is change in the market

environment. For example, a foreign consulting firm that was the first start business in 1993 and

helped a total of 37 companies enter the Chinese market closed in 2002. The reason for the close was

that due to a rapid influx of domestic and foreign capital into the Chinese market, the

investment/operation environment changed dramatically and entrance into the Chinese market was

not being recommended. They said that, “if you are trying to bring technology that is applicable all

over the world that’s one thing, but if you want to enter the Chinese market just to cut costs you

should reconsider.” President Sasaki feels that, “the key to business in China is (1) taking and

managing risks, (2) fighting with an invisible enemy and (3) having the strength to do so, and being

able to handle unforeseen troubles. In particular, risk is increased in recent years and you need to do

market research.”





What is the secret to Iris’s business success in China? According to president Sasaki it’s, (1)

entering the market early when there is less competition, and (2) specializing in differentiated

products and higher-priced products that are difficult for other companies to copy. In addition,

building a system geared for the domestic market, the Chinese market, that can deal with demands

for small lots and large variety, (3) constructing a direct sales network for the Chinese market, and

28

investing an amount approximate to 10% of annual sales into advertising along with doing detailed

research, (4) leading factory management and production to the Chinese, and building an

autonomous operation system. Production is done totally at the local level, and the work on the

Japan side is limited to headquarter functions, planning/development, and business operations.


Iris is now considering drastic changes in the field of women's undergarments. Present annual

production volumes are: first run 1.5 million women's shorts, and 600,000 brassieres. Out of second

run: warm underwear, 280,000 “Danren”, and 15,000 “Danren X” are produced and indigenous

varieties are still core. However, a lot of foreign investment and Chinese capital is being poured into

the indigenous varieties area and competition is growing fierce. Among these are large companies

that have large stocks and regualry announce new products, which is putting a huge burden on SMEs

trying to survive. That’s why Iris is going to shift to “Danren” and “Danren X” that can keep

products more expensive, diversified, enable lower production volumes of more varieties and take

advantage of short cycles, and they may have to consider abandoning indigenous varieties all

together. Furthermore, they also have a plan to strengthen commercial firm function and enhance

their lineup at “Aireiito” direct sales stores. They are going to establish a trade company in

Shanghai's Waigaoqiao Free Trade Zone and import/sell foreign products other than women's

undergarments.

In 2002 Iris developed warm underwear using Toyobo’s patented fiber eks (heat generating fiber).

Targeting local needs that demand thin and warm underwear, it is sold under the brand “Danren X”,

and it has been praised as fitting good and being fashionable. They have plans to develop new

products that will follow “Danren” and are putting a lot of energy into promotion such as holding

fashion shows in Beijing, Shanghai, Tianjin, and Wuhan in October 2003.

29


Company Name Nissan Tokiwa Co., Ltd. (Tokushima)

Industry Clothing manufacturer and staffing outsourcer

No. of employees 310 (Domestically, 280; Overseas, 30)

Overseas offices Shanghai（FUNCTION Co., Ltd.）

Company URL http://www.nissantokiwa.co.jp




Nissan Tokiwa, a sportswear, women's clothing manufacturer that mainly deals in the OEM

supply of famous women's clothing brands and is a certified producer of famous brand sportswear,

has started dispatching people who have completed training domestically as technical advisers to

Japanese based manufacturers and factories of business firms that have been relocated to China, and

established an outplacement service company in Shanghai in January 2004. After establishment,

the business got off to good start and has already shown good placement performance. This

business dispatches Chinese trainees who have passed the second level technical skill test on the

fundamentals of manufacturing women's and children’s clothing implemented by the Japan Textile

Products Quality and Technology Center (QTEC) as technical supervisors on a contract basis to

mainly Japanese based manufacturers and local factories affiliated with business firms after they

have finished training at the main Nissan Tokiwa factory, and according to the Nissan Tokiwa, “we

have reservations for placement contracts to take us through the rest of the year”.

At present there are 30 people are registered as being qualified to take part in this program, and

they make up nine teams consisting of three people each (three people are on reserve). One team is

out placed at a time and they provide guidance for (1) factory evaluations, (2) sample quality

confirmation, (3) part process quality confirmation, (4) mid-point manufacturing quality inspections,

and (5) finished product quality inspections, etc. the outplacement contract period is nine months and

a new team comes in every three months on rotation in order to prevent coziness between

outplacement staff and local employees.



At the time Nissan Tokiwa was exporting women's slacks on an OEM basis to mainly American

manufacturers but as a result of a rapidly appreciating yen after the signing of the Plaza Accord in

1985 it was forced to switch from focusing on exports to the United States, halted exports in 1987,

and switched to OEM supply for domestic manufacturers. After this, while keeping in mind a

30

possible re-launch of exports to United States it started production overseas where labor costs are

cheaper. In 1993 it established a manufacturing processing facility in Guangdong, China, and

established a company to manage it in Hong Kong. In the following year in 1994, it established a

trade company in Hong Kong. In addition, since a volume restriction was put on the import of

Chinese products to the United States in accordance with the Multi-Fiber Arrangement, they started

to look to place their production in a country other than China, secured outsourcing processing

facilities in Qatar, Jordan, Indonesia, and Cambodia, entrusted production/processing and established

a low-cost mass supply system targeted at mainly the United States.

However, in regards to their main force which was the manufacturing of their own products in

Guangdong, due to such problems as (1) the factory was quite far from Hong Kong and

transportation costs rose, and (2) production facilities and factories became dilapidated, in 2003 they

closed the factory, pulled out from overseas, and specialized/concentrated on domestic production.

On the other end, the business experience in China late president Hiraishi to remember one thing.

Thinking that, “There is very little personnel in Chinese factories that can provide technical guidance

for products. In the future, I would like to contribute to the expansion of business between Japan and

China by teaching advanced sewing technology from Japan”, Nissan Tokiwa has opened a new path

for the future.









One of Nissan Tokiwa’s strengths is that it never became lax in the management/strengthening of

its domestic production system even while it searched to relocate production overseas. While Nissan

Tokiwa established/secured production facilities overseas, a continued OEM supply of sportswear

and expensive women's clothing to leading manufacturers with its headquarters in Tokushima and

factories in Naruto and Donari and maintained an employee system of approximately 300 people.

The fact that it devoted itself to the introduction of the latest facilities and systems from overseas,

and it never stopped pursuing production technology domestically, is what enabled it to start a new

business.

31

In addition, since 1989 Nissan Tokiwa has invited 30 female Chinese trainees every year through

the Tokushima Prefecture Exported Sewing Products Trade Association and thoroughly teaches

trainees Japanese quality management methods and sewing technology during a three-year program

that consists of one year training and two years of practical experience. Those that finish the

program are required to take the second level proficiency test on the fundamentals of manufacturing

women's and children's clothing implemented by the Japan Textile Products Quality and Technology

Center (QTEC) and those who pass are awarded qualifications as quality instructors. These

training activities have given birth to a new business.


Nissan Tokiwa requires that instructors renew their qualifications every year in order to maintain

the quality of their skills. Those women who have completed three years of training/practical

training and life in Japan, and who can speak Japanese, are used as liaisons between Japanese based

corporations and local factories. In the future there are plans to expand the service to include other

foreign-based companies entering China without being limited to Japanese based corporations. In

order to do this Nissan Tokiwa feels that it needs to put a lot of energy into the fostering of personnel.

In addition, since there is also a lack of people who can oversee the maintenance of production

facilities in China, in the future they are looking into accepting male trainees, and training them in

the technology/know-how of machinery maintenance to foster technical trainees.

32


Company Name Maruha Bussan Co., Ltd. (Tokushima)

Industry Import, manufacture, sale of processed agricultural food products;

manufacture, sale of canned food items

No. of employees Domestically, 80

Overseas offices Jiangsu province (independently financed), Dalian (merger)

Company URL http://www.maruha.org




As a manufacturer/seller of root vegetables/vegetables such as burdock, carrots, bamboo shoots,

mushrooms and wild vegetables, etc., whose main axis lies on processed lotus root products, Maruha

procures most of its ingredients from the provinces of Liaoning and Jiangsu in China and part from

Korea, and has a factory almost the same size as its Japanese counterpart in China. Maruha has

approximately 1,400 different types of products and sells to approximately 500 companies including

food general wholesalers, super markets, convenience stores and fine cuisine restaurants and has a

30~35% share of the domestic lotus root processed item, its main product, market.



Maruha expanded overseas quickly and started importing ingredients from Baoying County in

Jiangsu Province, known as the best producer of lotus root in China, in the late 1970’s. Faced with a

shortage of domestic agricultural labor, rising costs and unstable production due to unpredictable

weather, Maruha looked to overseas for stable procurement. Procurement on a local level was done

the same way as it was in Japan, by going around to local producers and buying from them directly.

This is because Maruha places emphasis on the safety and trust of the consumer and is particular

about procuring from people “whose face you can see”. In 1987 they secured cooperation from a

factory in the same region and became the first Japanese corporation to engage in local processing.

From 1994 they engaged in direct business and established the world’s largest lotus root

processing plant with a merger between local cooperating factories and local government. They

began primary processing of carrots and burdock, etc. With the low cost of production in China they

were able to think seriously about the stable procurement of ingredients and maintaining the

freshness of foodstuffs and moved local processing into high gear.

At the end of the 1990s they turned their eye to mushrooms and wild vegetables from Jiangsu and

after securing cooperation from a factory in 1997, established a manufacturing company for boiled

33

mushrooms and processed wild vegetables through the merger with that cooperating factory in

Dalian city in 2000 thereby expanding their field of business and region of penetration.

In 2003 they reorganized the merger in Jiangsu and made it a 100% subsidiary. By making the

company a subsidiary they were able to organize operations and quality management and stabilize

production and delivery.




When Maruha started doing business with a Chinese corporation they were burdened by many

cultural barriers such as business customs and living environment, etc. There are also many unstable

elements in Chinese society such as anti-Japan demonstrations. Due to these local circumstances

Maruha feels that doing business in China requires much consideration. In 2004 it established a sales

company in Shanghai and planned to start local sales, but in consideration of the numerous

complaints from the local community and complicated anti-Japan feelings, and the fact that it is

difficult to collect receivables, they switched to gradually selling through a corporation on the

Chinese side.

In addition, one of the largest concerns for not just food products, but any Japanese based

corporation entering the Chinese market is the difficulty associated with quality management which

is why Maruha does only primary processing, such as manufacturing of its “Boiled Series”, at a local

level, and does final processing like seasoning, etc., domestically. Of course they have established a

quality management system in factories in China and there are no problems. However, they do visit

the factories every so often to check on things.





The strong point of this company that believes in “loving the ingredients and providing good taste

and enjoyment” is that it has a passion for research and development, a provision system that is

strictly adhered to the region of production and consumption, and overseas expansion overflowing

with a pioneer mentality.

Maruha’s expansion began with the morning, noon and night pursuit of lotus root processing

technology by the original founder and president, and the tradition of research and development that

had continued since establishment was passed down in 1988 to President Kayako Hayashi when he

34

took the reigns. In 2001 a quality management/research and development department in headquarters

received feedback from the market in the form of the voices of consumers and in order to make use

of this feedback in research Maruha opened a Tokyo office with market research functionality.

Maruha entered the Chinese market during a comparatively early period. Competition is

growing fiercer but Maruha aims to further expand its business in China through aiming to advance

local production and increase added value.


Maruha’s future strategy is threefold. (1) increasing added value and diversifying sites of overseas

business, (2) strengthening the consumer region/production region site system for domestic business,

and (3) strengthening cooperation with leading distributors for the entire group.

The important points for doing business in China are to increase processing at a local level and to

increase added value. This is necessary in order to survive the fierce competition and to meet the

desires of the local region. At the same time, escaping from a system that is exclusively devoted to

China, and diversifying business all over Asia, and further expanding/stabilizing production/supply

on a global level, are also issues. Vietnam, Thailand, and Indonesia are in Maruha’s sights. They

are powerful candidates from the standpoint of manpower and ingredient production. User

corporations (Japanese based manufacturers, distributors) are also demanding that they would like to

see products provided to them after being processed in the place they are produced.

Domestically, Maruha aims to further strengthen their production/provision system that is strictly

adhered to consumer and production regions. Even in the domestic market, but tastes of the Kanto

and Kansai markets differ greatly. Maruha will process/produce close to the consumption/production

regions and further clarify the fundamentals of providing “Safe, fresh and delicious food”.

Strengthening their partnership with leading distributors is considered to be more important than

the company itself. It is the trump card to comprehensively strengthening information gathering,

production plans, international distribution, and domestic sales.

While embracing complicated issues, the business environment in China has become more and

more difficult, and Maruha thinks that, “the reason why we have gotten to where we have is all

thanks to China. We aim to expand further with our foundation of procuring ingredients and

processing in China and we would like to raise our present 2.5 billion yen total group sales revenue

(May, 2005) to the midterm 5 billion yen mark.

35


Company Name Swany Corporation (Kagawa)

Industry Manufacturing industry (sports/winter gloves, walking bag, wheel chairs)

No. of employees 80

Overseas offices US, Europe, China

Company URL http://www.swany.co.jp




Swany’s main business is the manufacture of gloves. There reason for thinking about exporting

gloves was due to their peculiar employment situation. In other words, since gloves are only needed

when it is cold, a situation in which workers only worked nine months out of the year continued until

around the beginning of the 1950s. Swany felt that pioneering overseas markets was necessary to

free themselves from this situation and therefore put energy into pioneering the export market.

They started moving production overseas in the 1970s starting with Korea. After that in the

1980s they entered China and presently have all of their production facilities (four locally

incorporated companies established) in China. They have also established a locally incorporated

company in the US as a sales point.

In addition to gloves they also make wheelchairs and walking bags. This is because president

Miyoshi is a wheelchair user himself and is quite familiar with the problems associated with existing

wheelchairs. The business was started with the hope of providing a product that was better for the

user. In addition, there wheelchairs and walking bags are all produced in China.

Their ratio of domestic to international sales is 6 to 4. Meanwhile, in terms of product share of

sales, the ratio of wheelchairs to walking bags is about 8 to 2, but the wheelchair/walking bag market

is 10 times that of the glove market so this ratio is expected to reverse itself over the next five to six

years.

Swany does not engage in business with foreign-based companies and has not linked its business

with foreign corporations.



The manufacturing of gloves is a typical labor-intensive industry and production was moved

overseas not because of the prospect of success but because of necessity. In other words, they were

shocked into action by the low labor wages of Taiwan and Korea in the 1970s and decided to enter

the Korean market in 1972. After that, they caught eye of the fact that labor wages in China were

36

1/5 of that of Korea and in 1984 closed their Korean factory and move their production to China

where presently all of their products are produced.




When they closed the Korean factory they experienced a 100 day labor dispute with Korean

employees who opposed the closure but after discussing the matter in good faith they got them to

understand why production was to be moved to China. In addition, as a result of not firing talented

Korean executives and having them work in China instead, at present the presidents of two out of the

four locally incorporated companies in China are two of those Korean executives.

It is difficult to recruit executives in China. In particular, since college graduates do not want to

work in factories, in order to secure talented personnel, along with visiting universities they work to

come to a mutual understanding with recruited personnel. In addition, whereas they do have people

quit, they feel that mutual understanding and equal treatment is vital.

Language was a large barrier to entering overseas markets, but they foster local executives so that

they could speak Japanese, and trained half of all Japanese sales reps to be a good to work in

Chinese.



When they entered the Korean market they received financing from the local 114 Bank and from

what was formerly known as the Japan Development Bank. They again received financing from

the Japan Development Bank when they entered the Chinese market.


Factors for success can be narrowed down to disclosing operator level meeting minutes/president

business trip reports, etc., to the entire company, and mutual understanding and fair treatment. In

other words, in Swany’s case, none of the presidents of locally incorporated companies are Japanese,

they are all foreigners. In addition, stock gifts are given equally without differentiating between

Japanese and foreigners.

Language is an important key to mutual understanding and since foreign executives are all trained

to be able to speak Japanese, there is a large merit to be able to understand each other in Japanese.

Furthermore, management conferences with executives are held for times a year (one of the

meetings is held at headquarters).

37


Swany plans to continue to produce in China. Recently, problems like the deterioration of

Japan-China relations and the valuing of the yuan, etc., have been pointed out, but from the point of

view of this company who has engaged in business in China for many years is, politics and

economics should be thought of as two different things, and even if political relationships deteriorate,

it is not necessarily the case that economic relationships will also deteriorate. There are risks

associated with the yuan issue, but it is not considered to be a large problem at this point in time.

Since gloves are among the most difficult sewn products to make it is of utmost importance to

secure talented labor. The largest merit of producing in China is not that labor wages are cheap but

personnel is talented. In other words, agricultural villages in China are a huge source of young,

talented female labor and it is hard to imagine that this type of personnel resource could exist

anywhere else than in China.

38


Company Name Futec Inc. (Kagawa)

Industry Manufacturing industry (detection devices, etc...)


Overseas offices London

Company URL http://www.futec.co.jp




Established in 1955 as Fuji Lubricants Co., Ltd. and engaged in the manufacturing and sale of

automobile lubricants. As a result, they first entered foreign markets when they exported automobile

lubricants in 1967 when Mitsubishi Electrics exported electric locomotives to Spain. However, this

industry was a niche industry and they had to search to switching to other industries when faced with

the problems of the uniqueness of the client and the lifecycle of the product, etc., and consequently

went independent as Futec in 1997 and started manufacturing and selling survey devices. If you

look at sales from the first quarter of that year you will see that lubricants only accounted for less

than 10% of sales revenue, and survey devices had become their main force.

Exporting under the name Futec started in 1977 with a film defect detection device to Taiwan and

a paper defect detection device exported to the United States. Then in 1989, they established a

locally incorporated company in the United States as a sales point and also established another

locally incorporated company in the UK as a sales point. However, they retreated from the US

market in 2000 and at present only have an overseas sales point in the UK, but there will be opening

a representative office in Shanghai in March of 2005.

The industry is very specialized and they do not do business with foreign based corporations or

have any business partnerships with foreign companies.



Production is done solely in Japan and oil exports come from Japan, but profits are steadily rising

and they have no plans at present to move production overseas.

Whereas they do face competition from lower-priced foreign products, due to the uniqueness of

the product, since the key to beating the competition is improvements in quality and service rather

than price, technical innovations are fast evolving, and it is more advantageous to have production in

Japan where manufacturers are constantly developing new products. In other words, getting your

wings in Japan is the secret to beating foreign competition.

39

During the peak of the bubble economy it was considered good to go into debt in order to expand

your business, but after the bubble collapsed, since it became of utmost importance to be financially

sound, the company has strived to maintain zero debt self-financed operation. Accordingly, risky

investment is done totally with self financing and they have no intention of the engaging in

large-scale investment that would exceed their limits of self-financing such as moving their

production overseas.




In the case of this company, since entrance into overseas market refers to sales and not production,

they have no need to employ large numbers of local employees, and local staffing problems are the

sole problem of local operators and the basis of dealing with this problem is respect for autonomy.

In other words, they had been sending Japanese staff when launching a locally incorporated company,

but now they leave it all to local staff. The president of the English corporation is a Brit who lives

in France and who has been entrusted with all rights under the condition that if the company

continues to be deeply in the red that the office will be closed, etc.



All capital is self-financed.


It was good to be fully aware of the uniqueness of the product we handle and the superiority of

craftsmanship in Japan, that we remembered that above the of “top of national niche” line lies the

“top of global niche” line, and that instead of moving our production overseas to cut costs, we put

our energy into making new products of high quality and providing better service.


By aiming to be the top of a national niche, as a result they were in a position to strive to be at the

top of the global niche. However, they look to continue their basis of operation that is zero debt

self-financing at all costs.

Even though they aim to be the top of a national niche, it is vital to always be looking at what is

happening overseas and not to miss out on chances to become the top of the global niche. In this

respect Futec particularly focuses on the internationalization of personnel and plans to continue to

put importance on it.

40

Country: Australia- Institution

Organization AUSTRADE (trade promotion agency)

Organization format Government organization

Scale Budget: AUD335.8 million; no. of employees: 1,053 (budgeted for

FY2005/06)

Overseas offices 57 countries, 101 locations

URL www.austrade.gov.au

1. Basic thinking/stance on government/SME promotion organizations to respond to the

globalization of SME (including positioning of globalization in SME policies and fields being

supported as particularly important (export, import, corporate tie-ups, overseas investments,

etc.)).

To support the development of SMEs by expanding exports, Austrade implements NEDP (a free

program aimed at entrepreneurs thinking of getting into new exports that provides support ranging

from responding to novice questions to successful exporting) and EMDG (a subsidy support type

program aimed at entrepreneurs wishing to expand existing export operations)

These programs have no limitations of industry type regarding qualifications to use the program.

2. Specific policies, measures (including the financial side) and respective budgets supporting

responses to the globalization of SMEs.

(1) NEDP（New Export Development Program）1：

Austrade (16 in Australia/101 offices overseas) supports new developments of SME overseas

markets in cooperation with TradeStart (50 offices in Australia) through NEDP. (TradeStart provides

information and expert advice to support the success of export businesses of Australian companies.)

Export advisors in Australia and Austrade overseas staff, etc. provide free of charge up to 20 hours

of coaching, guidance, focused workshops and advice concerning exporting with respect to

exportability inspections of products, preparing to enter a market and after finalizing an export

destination.

The qualifications for utilizing this program are as follows.

1) Acquired an ABN (Australia Business Number)

2) Main location of business in Australia.

3) Have not used NEDP, TradeStart programs or the Export Access program within the last three

years and have not accepted services for new exporters from Austrade.

4) Have not obtained export profits in the same market within the past three years.

1 http://www.austrade.gov.au/australia/layout/0,,0_S2-1_CLNTXID001-2_-3_-4_-5_-6_-7_,00.html

41

Fees for business trips and market research (fees other than the free services that Austrade

provides), resources and time to utilize the programs (funds, human resources, etc.) are borne by the

participant.

Over 5,000 companies have been supported since the program started in the term ended June 2003

(July 2002 – June 2003). (Budget is unknown.)

(2) EMDG（Export Market Development Grants）2：

The EMDG program is a financing support type program of the federal government aimed at

SMEs in Australia trying to expand their existing export business (development markets, etc.).

Companies receiving this support can receive free assistance up to 50% of the amount subtracted

from AUD15,000 from the expenses associated with export promotion.

The qualifications for utilizing the program are as follows.

1) Annual business below AUD30 million

2) Expenditures of at least AUD15,000 on export promotion (can be calculated for two years the

first time only)

3) The products or intellectual assets the company is trying to export are produced in Australia.

The EMDG support money for FY2004/05 was AUD123.9 million (3,277 recipients). The

amount of money sent has a fixed cap annually, however, as result of funds AUD30 million that

will be added over three years from FY2004/05, the amount for FY2005/06 has reached

AUD160.4 million for FY2005/06.

3. Future Outlook and Expectations

The Australian government is aiming to shift economic growth from domestic-based to

external-based. With measures being implemented such as 30 new offices appointed to be in charge

of promoting export at Austrade, NEDP and TradeStart improvement, and additional contributions to

EMDG, the organization is expected to strive to promote export moving forward with a focus on

SMEs.

2 http://www.austrade.gov.au/australia/layout/0,,0_S2-1_CLNTXID0021-2_-3_PWB1455002-4_-5_-6_-7_,00.html

42

Country: Australia -SME

Company Name CIC Secure

Industry Manufacturing (security equipment)

No. of employees 15

Overseas offices New Zealand, Taiwan, Macao, Thailand, Malaysia, Singapore, Brunei (export

destinations)

Company URL http://www.cicsecure.com.au/

1. Overview of foreign exports and imports, domestic transactions with foreign

companies, cooperative relationships with foreign companies (entrusting of

production, sales contracts, etc...), or expansion into foreign markets, etc...

CIC Secure is engaged in the design and sale of goods for key safety management (boxes for

safely managing keys by using PIN entry, etc.) (manufacturing is outsourced); in addition to sales in

Austrailia, products are exported throughout Asia. (Domestic: export ratio: 9:1)



Ms. Cooke, the founder of CIC Secure started a consultant business for sales and marketing at her

home office after gaining experience in the sales of medical products. She searched for revolutionary

products looking for sellers. The first large-scale agreement she obtained was the sale of security

equipment; hence the business become involved in discovering various security products, until she

eventually started a business of her own related to security equipment.

3. Problems you experienced around the time you started business and how you solved

those problems (personnel deficiency, establishment of internal systems, deficiencies

in information gathering, capital procurement, language barriers, etc...)

In starting up the business CIC Secure, the first issues it faced were insufficient funds to hire

needed employees and a lack of knowledge related to basic bookkeeping and legal know-how. To

resolve the former, the company introduced an internship program and secured talented students. For

the latter, it used state government consulting services for entrepreneurs.

Since the export potential was unclear when evaluating product exports, CIC Secure grasped such

potential through surveys run via the NEDP program.

4. The existence or nonexistence of public support during these times (please explain in


State government consulting services were utilized and obtained for knowledge relating to basic

43

bookkeeping and legal know-how.

As for the export business, it was launched as a result of learning about Austrade’s NEDP

program; plans for gradually starting an export business were successfully formulated with NEDP

free services, leading to success export operations. Funds were received via Austrade’s EMDG

program, however, EMDG’s fixed threshold of AUD15,000 is a bit high for an SME.


One factor in the company’s business success is that CIC Secure conducts training of basic sales

skills for all of its employees and proposes what has learned from methods in expanding sales at

major international companies.

Large contributions are being made and the importance of are increasing for Austrade’s

newsletters, Website and information from local employees in terms of obtaining knowledge related

to markets with an interest in the company’s products.

6. Future expansion of your business and your company’s vision

CIC Secure is evaluating the potential of product sales in the UK and Ireland and aims to expand

its export business while continuing to receive support from Austrade.

44

Country: Canada - Institution

Organization Name Business Development Bank of Canada (BDC)

Organization Type State agency, public institution or industry organization

Size Annual budget: C$2.3 billion (loans budget) Staff: 1400+

Overseas Network None

URL www.bdc.ca

1. Basic idea and policy of the agency, institution or organization to promote SMEs in the

globalization (including, evaluation of the globalization in overall SMEs policy, key areas

to promote (export, import, alliance with foreign companies, foreign investment, etc.), and

key industries)

The Business Development Bank of Canada (BDC) is a federal crown corporation (100%

government-owned) bank that offers financial services, loans, venture capital, and business

consulting services to small and medium size Canadian businesses and entrepreneurs. BDC

specializes in helping small businesses with start-up and growth financing, and with developing

business plans. They provide custom financial solutions to meet their clients’ needs. They focus

specifically on small business, because often, the large commercial banks are more reluctant to deal

with small businesses. BDC particularly specializes in companies in the high technology and

exporting sectors.

2. Measures and budget (including financial support) to promote SMEs in the globalization

BDC’s main support for SMEs in globalization is providing business-consulting services and

financing solutions tailored to their specific needs. BDC has a portfolio of outstanding loans to small

business currently totaling about C$8.2 billion. In 2005, its authorized loan budget is approximately

C$2.3 billion.

It has also recently launched a Venture Capital Fund, which will make strategic investments in

Canadian companies with promising technology in the fields of life sciences, telecom, information

and other advanced technologies. In 2005, the Canadian Government provided an injection of C$250

million for BDC to establish this venture fund.

3. Outlook and prospects

BDC believes there will be continued growth in demand for its services. It projects its outstanding

loan portfolio to grow to C$8.8 billion in 2006. They also believe the Canadian Venture Capital

market is recovering several years of weakness. This recovery will allow BDC’s Venture Capital

Fund investments to increase.

45

Country: Canada - SME

Company Name Dalsa Corp.

Industry Design/development of semiconductors related to image processing

technology and related software development

No. of employees Approx. 1,000*

Overseas offices Has branch offices in the U.S., Netherlands, Germany, Japan and China and

agencies in 30 other countries

Company URL www.DALSA.com


companies, cooperative relationships with foreign companies (entrusting of production,

sales contracts, etc...), or expansion into foreign markets, etc...

Dalsa Corp. specializes in products related to digital imaging processing technology and related

services. In particular, its strengths are integrated circuits, electronics technology, software

development and wafer processing technology in the semiconductor manufacturing field. The

company’s technology is used in various sensor equipment, digital cameras, image processing

software, related semiconductor chips and the like.

The head office is located in Waterloo, Ontario. It has sales and service bases in the U.S.,

Netherlands, Germany, Japan and China. Dalsa is listed on the Toronto Securities Exchange and

including the group companies employs about 1,000 people worldwide.



(Answered from the perspective business aimed at the Asia-Pacific region.)

The Asia-Pacific region continues to be a core base for not only in the field of manufacturing but

also technological innovation in the world. The company’s technology and products are used for

improving the quality of products produced in factories and particularly indispensable in

semiconductors; therefore demand has been determined to greatly increase in the future (with

semiconductor manufacturing bases concentrated in Asia). Given this, the strategy is to focus on the

Asia-Pacific region. Other promising fields are automobiles, printing, electronics, LCD displays and

pharmaceuticals.


those problems (personnel deficiency, establishment of internal systems, deficiencies in


(Answered from the perspective business aimed at the Asia-Pacific region.)

46

Speaking from Dalsa’s experience, it is necessary for an SME to understand the culture of each

country and region before it enters the market in the same region. Sensitive issues will arise

occasional over similarities and differences in culture and customs of the respective countries. In the

initial stage it may be of great help to search for a partner or seller in the relevant country or region.

In terms of funds, it is important to start business from a small scale to reduce the risks.



The Trade Commissioner system of the Canadian government (a officer placed in internal/external

diplomatic establishment according to industry and country/region) is a significant help. The

commissioner provides information on legal regulations in terms of local latent partners and

conducing business as well as information on the various regulations with respect to procuring funds.

Organizations such as JETRO (foreign-government related) indicate the direction operations should

take. Grasping an overview of the market in Japan was helpful.


More than anything, patience and endurance are important. Things do not move forward at a

speed we’re used to. The needs of the market in the relevant country/region must be firmly grasped

and the company’s products/services must be skillfully adapted to the characteristics of that market.

In other words, a wide perspective and flexibility are needed.


Our goal for the Asia-Pacific region is to increase sales by 50% within two years. We are planning

to build new R&D bases and innovation centers in the region. for areas in which experience, such as

knowledge and know-how in the relevant countries/regions, we will look to merging operations with

local partners.

*The interviewee is the CEO of DALSA Coreco, a group company of Dalsa. Coreco opened an

office in Japan in April 2004, becoming its first office outside North America. It was later bought by

Dalsa. While the number of Coreco employees at the time is unknown, the scale is very small.

47

Country: Chile - Institution

Organization Asociación de Exportadores de Manufacturas de Chile A.G. (ASEXMA)

Organization format Industry organization

Scale Estimated budget: 1.7 million dollars; No. of employees: 62


URL www.asexma.cl




etc.)).

For our association, giving exporting companies the ability to use FTA concluded or being

negotiated by Chile is extremely important. A natural index for measuring the utilization of business

chances offered by the FTA is the growth in exports of manufactured products.

As an association of exporters, Asexma provides assistance by ensuring the identity of export

companies and the launching of new technology and designs as well as support in approaching free

trade zone markets.

Asexma has been moving forward such that Chile becomes the industry platform for Latin

America based on the political and economic stability of Chile and favorable relationships with

neighboring countries and the rest of the world.

2. Specific policies, measures (including the financial side) and respective budgets

supporting responses to the globalization of SMEs.

Asexma has been focusing on providing training opportunities related to launching new

technologies so the supported export companies can compete in corporate activities, trade, logistics

management, marketing and globalization.

The organization is constantly providing immediate and appropriate support for SME

development in exporting. Major related activities comprise trade promotion activities such as

providing information on laws and regulations, the certificate system, statistics and the customs

system as well as market surveys, business schedules and trade missions.

As a non-profit industrial organization, Asexma does not have an independent budget with respect

to companies. However, its business center is an intermediary agent of various schemes of

Corporacion del Fomento de la Produccion (CORFO), which aims to improve the competitiveness of

SMEs. This includes Fondo de Asistencia Técnica (FAT), Proyecto Asociativo de Fomento (PROFO),

Programa de Desarrollo de Proveedores (PDP), Fondo Nacional de Desarrollo Tecnológico y

Productivo (FONTEC) and Programas Territoriales Integrados (PTI).

48


The globalization phenomenon of companies is one of Chile’s challenges. Today, when planning

to launch a given market, just providing the product is not enough; recently, one must act with a

modern perspective taking exports and competitiveness into consideration. To smoothly enter any

given market in the world, introduction of technology or design is necessary and global international

standards and requirements must be met.

Along with the aspects noted earlier, corporate responsibility to society is a prerequisite that

exporters and importers must satisfy. Doing so allows differentiation among similar products and

must be done lest we be left behind.

Given that, the activities of Asexma aim to support exporters, and focuses its efforts on various

companies constantly implementing technology using production processes, acquiring various

certificates and conducting job training for full-time employees as well as paying attention to

relationships with workers and the environment.

49

Country: Chile - SME

Company Name COSMETICA NACIONAL

Industry Production and sales of cosmetic products



Company URL www.cosmeticanacional.cl




Cosmetics export business.



We had to consider growth, the market scale in Chile, and competition from multi-national

companies and aim to increase sales.


those problems (personnel deficiency, establishment of internal systems, deficiencies

in information gathering, capital procurement, language barriers, etc...)

To date, growth through the company’s exports have been achieved using net assets, and outside

capital is probably only needed for rapid growth.



The company receives public support in procuring funds etc. for raising capital for research and

development from grants for participation in overseas missions by PROFOS (a promotion project)

and FONTEC (a technology development fund) of CORFO (an industry promotion public company)

and by a guarantee by CORFO.


We obtain the latest technology that only a very few multi-national companies or the like in the

industry have been deploying.


In terms of the number of sales, we are the industry leader in cosmetics in Chile and do not expect

50

much growth in the domestic market alone. Moving forward we would like to see growth in exports.

Specifically, we will penetrate important markets such as the U.S. market and develop agencies in

Latin America with appropriate payment capabilities.

51

Country: Chile‐‐‐‐SME

Company Name TRAVERSO S.A.

Industry Production of vinegars, lemon juice and sauces



Company URL www.traverso.cl




Traverso started out exporting its own products and now exports to Latin America, parts of the US,

and Israel. It is developing sales collaboration projects with foreign countries, one of which is

ANDREA MILANO, an Italian perfume producer. However, Traverso does not have any foreign

capital participation.



Traverso has a considerable portion of the market in Chile, which in turn drove its expansion into

markets overseas. Collaborations with overseas companies have been made to indirectly bring

Chilean-made high quality products not produced to date to overseas markets and to learn product

development processes of manufacturers known throughout the world.




Naturally language issues pose barriers in export destinations and various health related

regulations of the importing countries; thus new mixing methods and special analysis is needed to

clear these barriers.

Acquiring specific information on market, market share rates, margin standards and vendor

oligopoly rate in distribution, etc. was difficult. Normally, one must go to the country and meet with

the relevant persons to collect the data nearest to the actual situation.

Another issue is that mixing methods, etc. are different for our own products and those distributed

in foreign markets. This causes major problems in production processes and logistics.



52

Public support is a mere formality, but there is support from ASEXMA (Asociación de

Exportadores de Manufacturas de Chile) and PROCHILE (the Chilean foreign trade commission)


(1) Being service minded.

(2) Being active and responsive

(3) Have business-related knowledge

(4) Have a tradition of carrying out your promises.


We have been extremely satisfied at the results achieved so far, with perseverance and hard work,

we must achieve still greater goals.

53

Country: ChinaCountry: ChinaCountry: ChinaCountry: China ---- InstituionInstituionInstituionInstituion

Organization ZXQYS (national development/reform committee for SMEs)

Organization

format

Government institution

Scale

Overseas offices

URL http://zxqys.ndrc.gov.cn/




etc.)).

In February 2005, the Chinese government (State Council) announced its “Some Opinions of the

State Council on Encouraging, Supporting and Guiding the Development of Private and Other

Non-Public Economic Sectors” and clarified its stance on supporting development of privately run

companies and the like. The relevant “Opinions” can be said to be the stance of the Chinese

government to support the development of SMEs.

The Opinions comprise 35 items; the 18th item describes thinking concerning the globalization of

SMEs.

The details are as follows.

(1) Support companies developing markets in China and abroad

(2) Move forward with information networking and provide information on domestic and overseas

markets to non-public owned companies

(3) Encouragement/expansion of expanding exports of non-public owned companies and overseas

investments

(4) With respect to overseas investments, financing exports and export credit insurance, such

companies shall enjoy same benefits as other companies

(5) Encourage non-public owned companies to apply for intellectual property rights overseas

(6) guide the role of intermediary organizations such as industry organizations and chambers of

commerce, use the country’s SME international market development fund and support

international market development of non-public owned companies



The ZXQYS primarily promotes the following measures towards the globalization of SMEs as an

SME policy proposal/implementation institution.

54

(1) The China SME Expo has been held by the ZXQYS since 2004 on promoting international

exchange related to SMEs.

(2) With cooperation by the ZXQYS, the National Development Bank strengthened financing for

SMEs and in 2005, the amount of financing is expected to total 10.55 billion yuan. In particular,

financing is given to companies coinciding with the government’s industry policies in such

fields as science and technology, employment creation, general use of natural resources,

agricultural production and exporting, gaining foreign investments through exports, and those

offering social services.

(3) The 1st East Asia SME Development and Investment High Level Seminar was held on October

27. Vice Premier Zeng Peiyan attended.

(4) Conclude MOUs related to SME cooperation with countries and strengthen bilateral cooperation

(An MOU was concluded with Korea in March 2005 and with Croatia in May 2005.)


On the subject of promoting the globalization of SMEs, Vice Premier Zeng Peiyan presented

opinions on SME exchange in East Asian countries at the opening ceremony of the 1st East Asia

SME Development and Investment High Level Seminar on October 27. Below is a summary:

(1) Promoting exchange/dialogue

Promote exchange/dialogue in a variety of formats and regularly hold high-level seminars

concerning SMEs in East Asian countries. Resolve issues through dialogue and provide an

environment of fair market competition with respect to SMEs.

(2) Promoting deregulation and facilitation of trade and investment

Improve environment for trade investments and encourage multi-national investments and

businesses in SMEs. Also, with respect to SMEs, provide the necessary conditions for promoting

free movement of production elements such as people, products, capital, services and technology and

so on.

(3) Expanding support on the financial side:

Provide financial services for investments/trade cooperation of SMEs in the region through

financial institutions. Strengthen support in terms of lending, expand routes for direct financing and

set up a credit security system among other measures.

(4) Setting up a service structure for SMEs

Provide a service structure for SMEs with respect to sharing information, technological innovations,

protecting intellectual property and developing human resources, etc. Remove obstacles concerning

investing/trade and eliminate unreasonable regulations. Promote exchange between SMEs.

(Source: ZXQYS Website)

55

CountryCountryCountryCountry:::: ChinaChinaChinaChina ---- SMESMESMESME

Company Name Oceans Sports & Entertainment Marketing Ltd.

Industry Marketing related business concerning sports

No. of employees 10

Overseas offices Hong Kong

Company URL www.oceans-marketing.com




Through tie-ups with FIFA (Fédération Internationale de Football Association), Oceans Sports &

Entertainment Marketing, the only FIFA designated advisory company in China, provides the

following services:

(1) Creates marketing plans and carries out sponsorships and sales as a marketing agency for

various sports associations, clubs and athletes.

(2) Marketing and sales of sports content

(3) As a partner in the sports marketing field of advertising companies, develops clients who

support sports by cosponsorship.

(4) Operate various sports events and related promotional events guaranteeing the sponsor’s

interests to the fullest extent.

(5) Analysis and results off the effectiveness of event collaboration (in tie-up with media analysis

specialist companies)

Established a new company in Hong Kong in January 2005 for conducting business in

broadcasting rights.



With four years experience in work in the J-League and as a responsible member of the FIFA

Beijing Office, the company decided to enter the sports related business in China through experience

gained in preparing to sponsor the women’s soccer World Championships held in Beijing in

September 2003.




56

Not even two years have passed since operations began, and the company has been dealing with

problems such as 1) unstable revenue structure, 2) insufficient capital, and 3) business development

reliant on advertising companies.



None in particular.


(1) Carrying out sports co-sponsorship business professionally

(2) Having strong ability to convert sports content into a valuable promotion tool

(3) Management experience locally and overseas in various sports events

(4) Understanding the corporate culture of the clients of different cultures and social backgrounds.


(1) In the short term, aim for success on the level of all accepted projects.

(2) In the medium-range term, aim to stabilize the revenue structure and stabilize management as

well as improve visibility of the company in the industry.

(3) In the long term set up a holdings company for managing sports property management

companies, media investment/affiliate companies and advertising agents.

(4) Finally, aim to develop the most respected and successful sports marketing company in China.

57

Country: China - SME

Company Name Beijing Tianzheng Information Technologies Co., Ltd.

Industry Market surveys, information provider, consulting

No. of employees 40

Overseas offices Tokyo

Company URL http://www.8681incubator.org.cn




Promotes exchange of private companies in Japan and China, mediation for business

developments, and business creation.

The main content of work is as follows:

(1) Market awareness stage: marketing research

(2) Market development stage: market creation, channel development

(3) Market advertising stage: market promotion support



Through experience at working at major companies in Japan, the concept of the major Japanese

corporation is focused on commercial distribution and export (not being able to escape from an

export model of profound and huge), it was felt that in responding to business of cutting edge

technology sought by Chinese companies that initiatives for localization for business development in

China and business model structures were lacking. Hence we decided to start related operations for

disclosing impartial and public information on the situation of Chinese markets that Japanese

companies could use in entering China.




Upon startup, we ran into the problem of low interest with respect Japanese style business

proposals in China at the time. In contrast to what is said about China having low labor costs, it is

difficult to secure high level human resources and there were also problems in securing office space

and funds; however, this problem was resolved due to ongoing support from the Wangjing

Liuxuesheng Chuangye-yuan (Wangjing Students Abroad Association for Business) and the like with

58

respect to foreign student created companies.



Upon established, the company received the following services from the Wangjing Liuxuesheng

Chuangye-yuan founded by the City of Beijing:

(1) Provision of offices at a low price

(2) Regarding companies founded by returning students from abroad, corporate income tax

exemption for three years after establishment.

(3) With respect to companies founded by returning students abroad, unsecured financing up to

100,000 yuan if applied for.

(4) While only a nominal amount, provision of bonuses to companies that did well.


(1) A gap exists between China and Japan in terms of information, regions, technology, business

scale and so on; however, the company is close to the China market and since it can provide

quick and accurate related services, it can provide appropriate services compared with other

companies in the same industry.

(2) Since the company provides its services in China, it can do so at low costs.

(3) China has many companies that provide survey/consulting services; however, few companies

offer a set of services ranging from surveys, business negotiation, company startup to promotion

support, and that is the company’s strengths. Setting up a business support platform gives many

of clients peace of mind.


(1) The company will expand its bases to Beijing, Shanghai, Shenzhen, Guangzhou, and Tokyo as

well expand its staff to 50 and strengthen the services structure offered to Japanese and Chinese

companies.

(2) Through managing the Sino-Japan Microelectronic Industry Center for Incubation founded with

the support of the Beijing city government, etc., expand business related to promoting business

alliances between semiconductor companies in China and Japan.

(3) From 2006, the company will tie-up with companies in the same industry that offer the same

services and aim to build partnerships.

59

Country/Region: China/Hong Kong – Institution

Organization Name Hong Kong Small and Medium Enterprises General Association

(HKSMEGA)

Organization Type Industry organization

Size 200 Members, Annual budget: Flexible, Staff: 5

Overseas Network Affiliated to China International Corporation Association of SMEs

URL www.hksmega.org




key industries)

HKSMEGA is in place to promote investment, exhibitions and seminars across the border

between SMEs on both sides (China and HK). In the past few years, HKSMEGA hosted study

missions for our members to major cities in China, Canada and Australia, so that they could establish

business networking and explore business opportunities over the world. HKSMEGA also takes

advantage of CEPA to boost the China trade for our members.


In 2003, HKSMEGA was given a grant of HK$1.70 million under SME Development Fund

(administered by Trade & Industry Department) to provide IT estimation advisory service to 100

SMEs in Hong Kong so that the beneficiary SMEs could have their IT-enabled technology upgraded

to compete more favorably against their global counterparts. The response was overwhelmingly

positive.


SMEs have a very rosy future in the knowledge-based economy because they can accommodate

its characteristics, such as individualism, flexibility and speed. However, SMEs are, in general,

deficient in financing, human resources and corporate governance.

4. Please introduce any of the enterprises which is/are under your support.

HKSMEGA, as a non-profit organization does not specifically support any individual enterprise

but assist the industry at large.

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Country/Region: China/Hong Kong – Institution

Organization Name Trade and Industry Department, Hong Kong SAR Government


Size Annual budget: Staff:

Overseas Network

URL www.tid.gov.hk

1. Basic idea and policy of the Hong Kong Trade and Industry Department to promote SMEs

in the globalization (including, evaluation of the globalization in overall SMEs policy, key

areas to promote ((export, import, alliance with foreign companies, foreign investment,

etc.)), and key industries)

We do not have specific policy on promoting SMEs in the globalization. However, the

Government of the HKSAR believes the key to the success to SMEs lies in the increase in

competitiveness through productivity enhancement, which covers both increasing operational

efficiency and increasing the value added to our products. Therefore, within the framework of a

free market economy, the Government of the HKSAR provides numerous services designed to help

enterprises to develop their potential. These services are provided by various Government

departments, quasi-government agencies and industrial and trade ogranisations and are offered to

businesses of all sectors in Hong Kong.


Not Applicable.


Not Applicable.

4. Please introduce any of the enterprises which is/are under your support.

Not Applicable.

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Country: Indonesia - Institution

1. Basic Policy of the agency, to promote SMEs in the globalization (including evaluation of the globalization in overall SMEs policy, key areas to promote (export, import, alliance with foreign companies, foreign investment, etc), and key industries ① To facilitate SMEs to participate in overseas exhibition, and trade mission. ② To have bilateral cooperation with other countries. The Objectives is how to make

cooperation between SME in Indonesia and SME in other countries, to create marketing,

do strategic alliance partner, and to attract foreign companies to invest in Indonesia. ③ To promote in Domestic Market 2. Measures and budget (including financial support) to promote SMEs in the globalization ① Overseas promotion

Department of Cooperatives & SME has facilitated 447 SME’s Companies go abroad and joint

exhibition such as

- Saudi Arabia’s International Trade Fair 2004 at Jeddah

- Discover Indonesia Trade Fair at Kuala Lumpur, Malaysia

- The 14th International Middle East Furniture, Interior Design & Shop Fitting

Exhibition at Dubai

- Exhibition at Lima, Peru (products: handicraft, batik, garment, home decoration,

jewelry, bag, sandal, fashion accessories, and football)

- 2nd Indonesia Solo Exhibition at Sharjah, UEA

- 12th South Africa International Trade Exhibition, Johannesburg

- Import Shop, Berlin

- Vietnam International Trade Fair at Ho Chi Minh city, Vietnam

② Bilateral Cooperation

Indonesia has bilateral cooperation with Turkey, Algeria, Italy, Korea, Bulgaria, Jordanian, and

Romania. On next November, there is program to conduct trade mission to Italy. The objectives is to

make action plan of MoU. The product is Leather. There are 20 SME company will go to Italy and

have one and one meeting with SMEs company in Italy. The purpose of this cooperation is to attract

investment from Italy to produce leather in Indonesia and export to Italy.

Organization name Ministry of Cooperative, SME

Organization type State Agency

Size Annual Budget: 1.05 billion Rp (1USD = Rp 10,000)

Overseas Network

URL www.depkop.go.id

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③ Domestic Promotion

In 2004, Department has already facilitated SME to joint in 5 promotion events such as:

- Inkowapi Bazaar, domestic product exhibition at Mangga Dua Trade Center

- Weaving exhibition at Hotel Sahid Jakarta

- Batam Expo 2004, at Batam Center, Batam island

- SMEsCO Festival 2004 at SME Promotion Center (SPC), Jl. Gatot Subroto

- Export Product exhibition 2004 at Jakarta International Center.

Budget for Promotion and International Cooperation for 2005 is 7,55 billion rupiah. This is

including exhibition inside and outside country and bilateral cooperation. Department of Cooperative

& SME facilitate 100% support for Booth rental, Catalog, and fiscal. But for transportation

Department is only support 50% of overall cost. SME’s company itself supports the other 50%.

④ Developing Small Medium Enterprise and Cooperative Promotion Center (SPC)

The purpose is to make integrated promotion to increase access and market segment of SME. This

SPC facilitates such as multifunction room, business center, Meeting room, Workshop,

Information/data center, consultation and advocacy, quality guidance, technique and marketing

management, financing facility, design, packaging, etc.

The building has 17 floors. The outside construction has completely finished and the building

currently has operated from 1st- 4th floor. For 5th – 17th floor, it is still under process. Budget to build

this SPC is $US 23,845,000.

3. 3. 3. 3. Outlook and prospects

Actually if the Ministry see the current condition of SME’s company in Indonesia, the

prospect is negative. That’s why now The Ministry is trying hard to develop through

bilateral cooperation, overseas promotion, training & seminar.

If Bilateral Cooperation is successful, the Ministry optimists that Indonesian SME

will able to enter globalization era.

Definition of SME According Law No 9/1995, Small business is:

- Asset < $US 20000 excluding land and building

- Yearly turnover < $US 100000

- Belongs to Indonesian citizen

- Independent

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Country: Indonesia - SME

1. Detail of business

Wooden Candle Holder, Wooden Handicraft

2. Background, prospects and reasons for the SME to start up the business I’ve been working for HSBC (Hong Kong Bank) from 1984 until 1994. On 1998, I started doing

my own business bringing some kind of handicraft and batik to Holland and I got a lot of profit.

From that time, I started learning about marketing, human resource, and active to get information

from NAFED – Department of Cooperatives & SME. In year 2000 until now, I have sold Indonesian

handicraft to 6 – 7 countries per year. I think the business has good prospect.

3. Problems / difficulties that SME facing before / after starting up business (financing, human resource management, structure management, lack of information/ marketing, language, and so on.)

Sometimes it is not easy to trust when I got an order. I am afraid that I might be meet ‘monkey’

businessperson.

4. Availability of public support (if any) Not any

5. Critical success factor of the business I make good relationship with good makers in the village (Bali, Jogya, and Pekalongan) and I can

get cheap price for material.

I think success factor is also depends on the person. I am very active person, I learn how to

greeting person who just passing by my booth and I talk to my self I must make them to come over

to see my product and make transaction.

6. 6. 6. 6. Outlook of business and company’s vision It will be great if one day I can do export of the goods to so many buyers without I need to go to

so many countries by my self like now.

Company Name Java Dini Art

Type of Business Export

No. of Employees 4

Overseas Network

URL

64


1. Detail of the business Exporter of green coffee, black pepper, and white pepper

2. Background, prospects, and reasons for the SME to start up the business

Our company started as a small family enterprise which after three generations has rapidly expand

into one of the bigger pepper & coffee exporter in Indonesia

3. Problems/ difficulties the SME facing before/after starting up the business (financing, human resource management, structure management, lack of information or marketing, language, and so on)

- Before : Financing, human resource management & lack of reliable information

- After : Networking, lack of human resource, marketing

4. 4. 4. 4. Availability of public support (please detail public support actuallAvailability of public support (please detail public support actuallAvailability of public support (please detail public support actuallAvailability of public support (please detail public support actually obtained, if any)y obtained, if any)y obtained, if any)y obtained, if any)

---------------

5. Critical success factors of the business

- Continuous improvement in product processing to keep up with market trends/ demands and

government regulations

- Diversification

- Dedicated human resources

6. Outlook of the business and your company’s vision

- To expand the scale of our business

- Break into global market especially Japan

- Further diversity to include more secondary processing in our product

- Aim to manufacture final consumer products

Company Name PT Putrabali Adyamulia

Type of Business Exporter & Processor of Green Coffee & Black Pepper & White Pepper

No. of Employees 90 Staff Personnel + 250 labor (Manual)

Overseas Network

URL

65


1．．．．Detail of business

Our product is Garment and sale through some of outlet in Jakarta and Bali

2．．．．Background, prospects and reasons for the SME to start up the business

Background is Hobby and hope young generation to appreciate the Batik wear

3．．．．Problems / difficulties that SME facing before / after starting up business (financing, human resource management, structure management, lack of information/ marketing, language, and so on.)

To control product quality

4．．．．Availability of public support (if any)

Trade fair

5．．．．Critical success factor of the business

Consumer buying power

6．．．．Outlook of business and company’s vision

The batik is expected to become more popular on the International society

Company Name Terracotta Indonesia

Type of Business Production/ Sales of Clothing

No. of Employees 10 employees

Overseas Network

URL

66

Country: South Korea - Institution

Organization Small and Medium Business Administration

Organization format Government institution

Scale Estimated budget: 1.6259 trillion won (2005), No. of employees: approx.

560

Overseas offices 2 (China, Indonesia)

URL http://www.smba.go.kr/




etc.)).

The SME policy objectives are positioned as “increasing the strength of small and medium

venture companies by increasing their ability to innovate and strengthening their global

competitiveness”, transfer a policy paradigm towards autonomous competition and cooperation as a

part of the tone of policies focused on protection and development, and advance the following types

of SME policies.

(1) Focused development of innovative SMEs, centralizing policy resources and creating an

environment in which general SMEs can shift to becoming innovative companies. The government’s

various support structures promote measures that are focused on preparing a system that enables

efficient distribution following the achievements of innovative results.

(2) Strengthening the order-made type policies to set and promote policy objectives that are

differentiated an in line with SME requirements and characteristics.

(3) Eliminate the “direct protection system” that has lowered efforts to improve technology

development and improve quality by SMEs. To this end, plan to gradually end the organization

optional agreement system and fixed industry system by 2007.

(4) To eliminate polarization as companies, SMEs and small scale commerce and industry persons

grow together, focus political strength.

(5) Promote the loosening of industry-related regulations and simplification of procedures



(1) Expanded support at the base of SME exports:

1) Industrialization of domestic SME exports

Business details: system wherein SMEs with great latent potential for exports are discovered, the

various activities required for exports are supported and export SMEs are developed.

67

Current status of operations: In 2001, the budget of 1 billion won increased rapidly to 1.5 billion in

2005 and the number of companies supported started from 341; now 1,700 companies are being

supported as of 2005.

2) Management of export support center for SMEs:

Business details: The SME Export Support Center was set up and is managed by local SME agencies

in 11 locations since December 1998 and is supported in whole by 11 export support related

institutions and financial institutions.

Current status of operations: In 2004, financial support for exports in 2004 totaled 137.9 billion won;

export securities/insurance support totaled 279.9 billion won for 1,129 companies and marketing

support for 625 companies.

3) Enhancement of SME cyber-trade foundations

Business details: Building/managing “Internet SME Hall (Kor.bestme.com) to enhance the

marketing foundation for cyber-exports of SME-made products.

Current status of operations: as of the end of June 2005, catalog information had been built of over

152,000 products with information on 25,815 companies. A tie-up network is being setup with the

ASEM site and 160 trade sites worldwide are being registered.

(2) Strengthening of overseas marketing power of SMEs:

1) Overseas expos and dispatching market development organizations

Business details: support of participation in overseas expos and market development organizations

to promote overseas market entry of SMEs

Current status of operations: In 2004, dispatches to 72 overseas expos and 29 market development

organizations, etc. amounted to at total of 101 dispatches supported. In 2005, there were 117 such

dispatches supported with 10.2 billion won.

2) Support for acquisition of overseas standards certification:

Business details: Countries all over the world require overseas standards certification marks to be

obtained and the technological support needed to obtain the overseas standard certification as well as

support with part of the capital for obtaining such certifications.

Current status of operations: The 2005 budget is set at 21.4 billion won to 4,277 companies and

support to obtain certification given to 905 companies by the end of August was completed.

3) Developing staff needed to develop markets overseas

Business details: In line with the large increase of unemployed persons with academic ability due to

the 1999 IMF crisis, the administration has been educating the staff needed to deploy to overseas

markets and developing them through direct investments.

Current status of operations: SME marketing activities executed overseas by 884 people in 100

locations in 68 countries in 2004. In 2005, the dispatch of staff needed to develop overseas markets

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totaled 895 people for 8.5 billion won is being promoted.

4) Support in entering overseas retail distribution chain and international distribution market

Business details: So that overseas sales routes can be secured for export products caused by

shrinking distribution stage when exporting to retail distribution networks overseas, the government

has been promoting support operations for making inroads into overseas retail distribution networks

since 2002.

Status of operations: In 2004, supported entry of 70 promising SMEs into overseas retail

distribution chains. In March 2005, supported participation of 15 South Korean companies in the

U.S. IT Purchasing Exposition held in Washington D.C.

5) Support of SME/venture company overseas, through public overseas support centers

Business details: Providing local market information and supporting activities of an export

marketing agent, etc. to be designate consulting companies, etc. with know-how on promotion

support overseas as private overseas support centers and fulfill various export demands that domestic

SMEs find difficulty fulfilling.

Status of operations: In FY2001, operations began with the setting up of 20 centers in 11 regions

including Japan, the U.S. and China. Since 2004, the company is setting up and has been setting up

and managing 49 centers in 16 countries and has projects underway for 183 companies to make

inroads overseas.

6) Support SMEs with their entry overseas and with exports through the “Export Incubator”

Business details: Incubators were setup in major countries overseas such that SMEs could be

established quickly that wanted to try to set up branch companies and local offices overseas, with

inexpensive office space provided as well as local marketing and bookkeeping and legal consulting,

etc.

Status of operations: through the SME Promotion Organization, starting with the Chicago Center

set up in the US in 1998, in FY2003 such centers have been set up in centers of overseas trade such

as Japan ([South Korea] Small Business Corporation Japan Office) and Washington D.C., L.A.,

Germany, China and so on. In FY2005, two locations were added in places such as Viet Nam and

136 companies are planning to enter by the end of August to make inroads into the local regions.

Business details: Discovering innovative, promising SMEs and building a global foundation by

attracting foreign investment from overseas venture capital funds by providing support in efforts to

attract foreign investments.

Current status of business: Selected companies are matched with venture capital and support

received such as company analysis for attracting investments and forming strategies to attract

foreign investments and 80% of operational costs are covered by the government.

69

(3) Strengthening the internationalization of SMEs

1) Strengthening bilateral international cooperation activities

Business details: the SMB administration is pouring efforts to coordinate a corporate environment

such that information related to market trends of main trade countries and corporate customs, laws,

regulations and so on as well as creating mutual profits from trade and investment activities between

two countries.

Current status of operations: June 2000 SME cooperation agreement between South Korea and

Italy; In November 2001, between South Korea and the US; in June 2001, between South Korea and

Mongolia; in December 2003, between South Korea and Taipei, in March 2005 between China and

South Korea. These agreements are providing a strong foundation for exchange in SME areas

between two countries.

2) Strengthening multilateral international cooperation activities

Business details: The SMB administration vigorously participates in international conferences held

as required by international organizations such the OECD and APEC, and aggressively and actively

speaks out for the interests of SMEs.

Activities at the OECD: the SMB Agency participates in the WPSME (Working Party on SMEs), a

part of the Committee on Industry and Business Environment in the OECD.

Cooperation with APEC: The Agency participates in the APEC “SME Agency Conference” held

once a year and the “SME Workgroup Conference” held twice and year and serves a major direct

support role in expanding regional market entry and cooperation opportunities of SMEs in South

Korea.

Other international companies: The Agency participates in international conferences and joint

projects held by international organizations such UNESCAP, WTO and WIPO under the UN and

plans active support for SMEs to make inroads in overseas markets.


(1) Improvements in support structure in policy funds: unprecedented reductions in support time

and procedures by utilizing online systems such as for issuing e-coupons, etc. and business

consulting operations+

The One Process Support Structure has been in effect since July 15, 2005, in a tie up with the

SME promotion organization and security institutions to tie up with policy funds and credit

guarantees. Through One Process, it appears that the time for borrowing money can be reduced and

direct/indirect costs of SMEs can be greatly reduced.

(2) “Embodiment of requested services” by increasing the satisfaction level through systematic

management with respect to customer complaints and government expansion with respect to the

onsite support of SMEs.

70

From March 2005, the agency has been managing a “customer satisfaction office” system to take

care of various civic application work and the SME Onsite 119 for each local SME agency to

quickly grasp and resolve difficult points onsite in regional SMEs. The Agency is pouring efforts

into means to resolve issues of SMEs faster by utilizing these two systems.

(2) Boldly eliminating policies of precedent that are ineffective, and ensure policy effectiveness:

Boldly eliminate/adjust past polices that are not in keeping with changes in the times and

economic environment and provide support that can rapidly respond to the flow of globalization by

SMEs.

71

Country: South Korea - SME

Company Name Nobtech Co., Ltd.

Industry Information communication device trade, domestic demand/clothing

imports/sales

No. of employees 20

Overseas offices Japan, US, Indonesia

Company URL www.nobtech.co.kr




(1) Export of information communication devices (Wireless Local Loop Phone): produces OEM

and own branded versions of the WLL Phone and exports to Indonesia, Pakistan and Sri Lanka.

Sales in 2004 totaled 700,000 dollars.

(2) Export of CDMA relay units: Exports R-tron relay units made by a South Korea relay specialist

manufacturer and exports to Indonesia, delivers to PT.TELKOM (the largest communications

vendor in Indonesia) Sales in 2004 totaled 1. 1 million dollars

(3) Peripheral devices for mobile phones: plans and produces peripheral devices for mobile phones

through Mody, a joint brand with SK Telecom and distributes to domestic markets (South Korea

produced, overseas producing in China and Taiwan. Operations started from 2005. Sales in 2005

totaled 7 billion won.

(4) Brand clothing business: Imports brand clothing from the US and Europe and supplies to sales

and whole sale through Internet shopping malls (www.brandmall.co.kr) and offline direct

marketplaces. Sales in 2004 totaled 800 million won.



(1) Export of information communications devices (wireless Local Loop Phone)

1. Catalyst: being different from mobile phones, this phone is a mobile communication device that

can be exported by SMEs ( looking at the experience of mobile phone exports over several years),

therefore, participation by major companies is difficult and market value is low, and is an SME type

niche market, therefore, the company decided to invest and more forward in the area.

2. Possible risks: Competition with low cost products made in China

3. expectations for success: Since WLL business conducted in developing nations has quality and

price competitiveness, it was possible to continuously receive orders if the requirements of buyers in

the respective countries could be skillfully met. In contrast with other companies, the products of the

72

company are built using a low cost structure and are expected to continue to sell over the next year.

(2) Export of CDMA relay units

1. Catalyst: The company has a good network with PT. Telkom, the largest communications vendor

in Indonesia as a partner in Indonesia, and since the company assert its intent to enter the relay

device delivery business, among the relay manufacturing companies in the country, it became an

export agent of products of R-TRON, regarded highly for its technology and quality.

2. Possible risks: Competition with low-cost products made in China and strategic marketing

3. Expectations for success: while in terms of technology and quality, the product is very competitive,

in terms of price they are more expensive than the products made in China; therefore, whether the

business succeeds or not is directly linked to what direction the communication vendor takes in

competing with future products made in China. If the company grasps the strategies of

communication vendors and if the company emphasizes the excellence of the technology and quality,

then it is determined that orders will continue to come in.

(3) Mobile phone peripheral devices:

1) Catalyst: As a result of participating in managing vendor operations bid when SK Telecom

Commerce business unit with which the company has long relationship of transactions started a

mobile phone peripheral device business, the company started successful bid operations. In a market

that does not have a market-leading brand, it was determined that in the case of distribution of

mobile phone peripheral devices through SK telecom which has 20 million subscribers, the company

could secure a lead in the peripheral devices market; thus the mobile peripheral device business was

launched.

2) Possible risks: aggressive marketing by mobile phone manufacturers

3) Expectations for success; Through the organic collaborative marketing with SK Telecom, South

Korea’s largest operator, the market expanded at a rapid pace, and within three years, mobile phone

peripheral devices were planned, produced and is expected to grow into the largest in the country as

a marketing company (the annual sales target for 2007 is at least 80 billion won)

(4) Brand clothing business

Catalyst: Since the time when the company’s president was at Itochu Corporation, it has retained an

overseas brand network that has built a human network. Through this network, the business was

launched after it was determined that profitability could be created in a niche market by importing in

parallel overseas brand clothing and miscellaneous goods and selling them in South Korea.

2) Possible risks: Lack of domestic consumer market

3) Expectations for success: By retaining competitive product sourcing and a domestic sales network,

sales will show growth trends and profitability through expanding directly operated points of sale,

continued growth is possible as long as rapid shrinking of the domestic consumer market does not

occur.

73




(1) Export of information communication devices (Wireless Local Loop Phone):

Initially, this had good profitability, but problems arose with the low-price offensives of products

made in China and became less profitable. For new products, we struggled to cut costs and created a

new cost structure: one which provides a certain amount of profit that can be sustained even when

facing low-price competition by Chinese products. For low-price markets, CDMA modules from

used products in South Korea were reused, and products less expensive than products made in China

have been supplied to the low-cost markets and sales are continuing.

(2) Exports of CDMA relay units:

While there were problems with installation, maintenance and repair of relay equipment since

there were no specialists in Indonesia, the problem was resolved by seconding engineers from South

Korea and training local resources for over a year. There were also many points of Indonesian and

South Korean business customs that did not match and there was a great deal of trouble in the initial

entry, but efforts were poured into adapting to the local environment and with the efforts of partner

companies in Indonesia, these problems were overcome.

(3) Mobile phone peripheral device business

Promotion of business was delayed due to self-interests among departments often seen in large

corporations, but by coordinating persistently with their opinions, the business was launched, and

progress was made.

(4) Brand clothing business:

Built current system by improving capability of internal human resources while going through

four years of trial and error due to lack of specialist human resources in brand clothing related

divisions.



There is no public support with respect to the four business divisions.


(1) Export of information communications devices (Wireless Local Loop Phone):

1. Competitive price and excellent quality based on low-cost structure

2. Honest after-service support

3. Product development and proposals suited to the situation of the relevant countries

74

4. South Korea’s excellent mobile phone related manufacturing technology

5. Proposals and sales of products in light of within the requested items of buyers as much as

possible

(2) CDMA relay unit exports

1. Excellent quality and technology

2. Localization of human resources related to equipment, maintenance and repair

3. Capable and honest Indonesian partners

(3) Mobile phone peripheral device business*

1. Product development and production responsive to market needs

2. Brand strategy

3. Establishment of systematic distribution system

4. Prompt management

5. Ability to respond flexibly to changes in the market environment


1) Expansion of multi-product sourcing network

2) Product import and sales that can respond to the needs of consumers through parallel Internet mall,

directly operated points of sale, wholesale and retailer sales channels

3) Know-how built from trial and error over four years

4) Prompt management

5) Ability to respond flexibly to changes in the market environment


(1) Export of information communication devices (Wireless Local Loop Phone):

1. Pour efforts into developing overseas niche market that large corporations cannot reach and build

a stable export market

2. Export target sales of 20,000 units monthly/ 240,000 units/year (2006)

(2) Export of CDMA relay units:

1. Be a supply company of outdoor relay units in Indonesia

2. Supply total solutions related to relay units in Indonesia and build a new profit model

3. Target of sales of 500 units annually (2006).

(3) Mobile phone peripheral business

1. Planning of to become country’s top mobile phone peripheral company and grow into a

manufacturing and distribution company

2. Overseas export of mobile phone peripheral devices

3. Reach goal of annual sales of 30 billion won (2006) and 80 billion won (2007)


75

1. Growth into a reliable overseas name brand parallel import company with leading strength the

country.

2. Build 100 sales outlets (by 2006)

3. Build 5 directly managed points of sale (by 2007)

76

Country: Malaysia - Institution

Organisation Name Small and Medium Industries Development Corporation (SMIDEC)

Organization Type Government Agency

Size Annual Budget: RM27.8 million (Development)

RM10.78 million (Operation)

Staff: 119

Overseas Network

URL www.smidec.gov.my

1. Basic idea and policy of the agency, institution or organisation to promote SMEs in the

globalisation (including, evaluation of the globalisation in overall SMEs policy, key areas to promote (export, import, alliance with foreign companies, foreign investment, etc), and key industries.

SMIDEC strives to create resilient and efficient Small and Medium Enterprises (SMEs), able to

compete in a liberalised market environment. The Corporation will promote SMEs to be an integral

part of the country's industrial development capable of producing high value-added parts,

components and finished products. SMIDEC will serve as the national focal point for the overall

development of SMEs in the country.

VisionVisionVisionVision

To be the leading organisation in developing SMEs that contribute to economic growth and

enhance competitiveness of Malaysia.

MissionMissionMissionMission

To transform the SME sector into a vibrant, competitive, resilient and to be fully integrated into

the manufacturing and services sector.

2. Measures and budget (including financial support) to promote SMEs in the globalization 3. Outlook and prospects

The SME development will focus on harnessing the potential of the services sector to further

stimulate economic growth. Emphasis will be given to enhancing the contribution of sub-sectors

such as transport services and logistics, distributive trade and back office services. In addition,

support will be given for high value adding manufacturing related services, such as R&D, D&D and

packaging.

SMEs are expected to contribute to the long-term goals of achieving business and industrial

competitiveness in an increasingly globalised economic environment. SMIDEC will give priority

to the creation of a more conducive business environment, together with the institution of a cohesive

77

policy and regulatory framework and institutional support to stimulate vibrant entrepreneurial

activities, the expansion and diversification of existing firms and the creation of more start-up firms

in new potential areas of growth.

Policy and regulatory support will be targeted at promoting the development of dynamic,

innovative, entrepreneurial and competitive firms with a global outlook.

There will be greater availability and accessibility to funds for SMEs. The special needs of different

categories of SMEs – micro, small and medium enterprises – will be addressed. However,

increasingly, financial support for SMEs will be market driven and based on performance.

78

Country: Malaysia - SME

Company Name Zeito Plastic Components Sdn Bhd

Type of Business Manufacturing – precision plastic components

No. of Employees 120

Overseas Network

URL www.zeito.com.my

1. Details of the business

A manufacturer of plastic components for the medical, electrical, electronic, automotive and

telecommunication industries, Manufactures using injection moulding machines – 37 units. We also

do related secondary processes, printing, spraypainting, hot stamping and assembly.

2. Background, prospects and reasons for the SME to start up the business

The Company was set up in 1992 by 2 of the directors, Mr PC Leong and Mr B S Chew. It started

with a paid-up capital of RM250,000.00 with only 4 machines. At the time, there was a demand for

plastic injection moulded products by many MNCs who were moving a lot of production to

Malaysia. Mr Leong had experience in injection moulding and both had extensive management

experience.

3. Problems/difficulties the SME facing before/after starting up the business (financing, human

resource management, structure management, lack of information<marketing>, language, and

so on)

Main problems:

1. Management structure – whether to use a loose structure or adhere to a strict one

2. Marketing – without the benefit of a large structure, marketing initiatives were haphazard

3. Human resources – new companies usually do not attract good staff. Had to make do with

available staff.

4. New company – credibility issues had to be faced

5. No track record on quality and deliveries

4. Availability of public support (please detail public support actually obtained, if any)

Lately, we have had a few grants and services that we have managed to utilize which

has gone some way to assisting us to grow eg. Implementation of a ERP solution

company wide, getting certification to ISO 9001 and 14000 standards – all done using

grants provided by SMIDEC.

5.Critical success factors of the business

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a. good customers

b. emphasis on quality and customer service

c. a high degree of perserverance from the shareholders/management

d. continuous re-investment

e. strength in technical issues

f. priority for people first

6.Outlook of the business and your company’s vision

The Company faces many challenges namely;

i. Shifting of customers to China

ii. Rising raw material prices

iii.Moving up the next level in the technology ladder.

The Company’s plans in the short term are to boost its existing business by introducing new

services as well as to grow its medical products business.

Strategies to counter the challenges faced include;

i. Looking for new customers in the non-traditional markets of Europe like the

Scandinavian countries.

ii. Taking on lower volume projects with a higher value added content

iii. Focusing on Quality and Productivity

iv. Continuous reinvestment and upgrading of equipment

v. Expand usage of IT

vi. Joint RND with customers which minimizes customers’ risk and also allows the

Company to acquire knowledge resources.

With this in place, in the longer term, it intends to pursue its strategy of being an integrated

technology provider by venturing into design and development of complete products so that it can

offer itself as a one-stop centre for the procurement of various types of high end manufactured

products.

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Country: Mexico - Institution

Organization Name Underministry for Small and Médium Enterprises/ Ministry of Economy


Size

Overseas Network 7 (USA, Canada, Uruguay, Belgium, France, Switzerland, Singapore)

URL www.economia.gob.mx/




key industries)

To continue improving standards of life of Mexican SMEs and convinced that until today the

made efforts represent the precedent that is required to turn into realities the objectives established in

the World Economy, Mexico like other Economies are turning their eyes to the SMEs to impel their

creation, development and integral consolidation, through the implementation of a support system to

promote their competitiveness and to create a friendly environment and new entrepreneurial culture,

that satisfy the demand of the domestic market and manages to be inserted successfully in the

international market.

Today we have turned our eyes to the small and medium size enterprises to impel its creation,

development and consolidation based on the design, adoption and implementation of a systemic

approach based on competitiveness of the government to create a friendly environment that

promotes the small and medium enterprises to become competitiveness.

Mexico is implementing a support policy for SMEs aimed at enhancing their competitiveness so

they can compete successfully in the local and global markets. in this way, SMEs will be able to

make a major contribution to the economic growth and sustainable development of Mexico.

We consider SMEs as one of the pillars for sustainable economic growth, they have the potential

to make possible a more equitable distribution of the national income, to generate the amount and

quality of jobs that population demands and to increase social welfare.

Sinergy entails the participation of all the public and private institutions that mantain a

relationship SMEs that reflects in the programs that guide the function of the Underministry for

Small and Medium Enterprises.

Our challenge is to create competitive SMEs that can face the trade opening. For that reason,

mechanisms of interchange and cooperation with other Economies has been fostered in the matter of

qualification and training programs, access to the financing, technological innovation, access to the

information, and agreement of actions between the public and private sectors and academic and

investigation institutions have been created.

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Like other Economies, we have implemented a lot of public policies for the development of the

SMEs that includes shared financing, industrial opening, innovation and technological development,

work in equipment for the modernization, increase in productivity through the qualification,

consultancy, development of suppliers, conditions to facilitate the financial access and economic

development of regions and specific sectors.

In order for SMEs to take full advantage of the process of facilitation and liberalization of trade

and investment, Mexico through the Underministry for Small and Medium Enterprises has

orchestrated a lot of actions based on:

• Financial Support

• Human Resources Development

• Information Access

• Market Access

FINANCIAL SUPPORT

The main purpose should be to make financial and capital markets more accessible to SMEs by

developing schemes in accordance with their specific needs.

For that reason in Mexico the creation of a guarantees credit system , accompanied with the

support and promotion for the installation and fortification of companies of risk capital is impelled

that direct their amounts of investment in the SMEs

Also a system of microcredits for people is orchestrated who do not have access to the resources

necessary to initiate or to let also grow their SMEs increasing the nonbanking generation of schemes

of social bank and intermediaries.

HUMAN RESOURCES DEVELOPMENT

Mexico embrances the conviction that human capacity building is necessary for participating in

the new economy. Information and communication technology has changed our way of working and

doing business, so access to the tools of the information age is becoming critical to full involvement

in economic and social life.

In this context, the challenge is to develop in cooperation with other Economies and the SMEs

themselves human resource capabilities such as entrepreneurship, business and managerial skills,

technical capabilities, technology sharing, linguistic skills, understanding of diferent cultures and

knowledge of business practices and legal requirements in different markets.

INFORMATION ACCESS

There is a need to enhance the development of user-friendly and efficient information access

systems to government policies, technology, intellectual property regimes, markets and potential

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business partners. A first step in this direction would be to gather in one integrated network the

available scattered information systems catering to SMEs, thus improving the opportunities for

strategic alliances, offshore business and cross-border trade.

MARKET ACCESS

Market access is critical for the efforts of SMEs to take full advantages of the economic

globalization. Hence, it is a high priority to continue expanding the process of liberalization and

facilitation of trade and investment.

On the other hand, the Internet era has given SMEs new and so far unknown opportunities to enter

the global marketplace. International trade has been dominated by a handful of large transnational

companies, which could afford the high costs of market entry, however the swift doiffusion of the

internet today will enable more SMEs to benefit from the global market. Thereby a mayor task for

economies is to create the conditions and facilitate the application of information and

communication technology, in particular in traditional industries and SMEs to improve their

economic performance.

Foster the Small and Medium Enterprises (SME’s) participation in both national and international

events, that enhance commercial exchanges, bilateral and multilaterals commercial agreements,

alliance with foreign companies. The Under ministry promotes the organization of matchmaking in

several sectors such as commerce, industry and services. The Under ministry works to improve the

financial access to SME’s through the assistance of other public and privates institutions.


Through the “Fund for Supporting the Micro, Small and Medium Enterprises”, the Underministry

support services of training, consultancy, systems of information, technological innovation, training

of advisors, consultants, trainers and promoters, centers of entrepreneurial linking; relating the others

federal programs, as the federal entities and districts. The 2005 Budget of the fund is $160,055

thousands USD (1,727 millones de pesos)


Today, Mexico is an open economy to worldwide markets with reduced public deficits, low

inflation and the potential to face the dynamic of the worldwide markets.

This condition implies that although it has advanced in some areas, it´s clear that towards the

future, the challenge is to consolidate the productive process, to fight the poverty and to generate

jobs that the economically active population lead to a necessary conclusion: the creation of wealth,

uses and value added in SMEs must have the highest priority for the government, the productive

society and the institutions of the sector knowledge.

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Today the worldwide economies are in a while of reduced growth, that can lead to recession

periods, magnified by events that have affected the globalised economy.

If in the past the economic policies they privileged the structural reforms, that still are necessary

to consolidate, today the nations, in the frame of the new economy, require to concentrate their

efforts in increasing the productivity of each one of their companies, as well as of the public

economy and institutions as a whole, so that it is translated in better salaries for the workers, utilities

for the companies, increase of the internal market and high contributions in the public property.

Some key elements that define the new economy are an effective system of innovation, the

development of human resources, an outpost technology of the information and communication, as

well as an environment that gave security the accomplishment of businesses.

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Country: Mexico - SME

Company Name Red Interamericana de Comercio (RISCA)

Industry Product sales in supermarkets

No. of employees 16 (8 in Mexico City, 8 in Panama)

Overseas offices Panama

Company URL www.tradepointmex.com




Product sales in self-service stores (such as canned Mexican foods, plastic products, brushes,

gloves, etc.)



Established in 1997. The joint manager was an international trading consultant who started

business in trade in Mexico. An opportunity came to sell Mexican products abroad. The company

decided to open an office in Panama given the development in Central and South American markets

in the times to come and because of the ease of logistics (transport) and investments. The company

made advance surveys of what Mexican manufacturers had offices in Central and South American

countries and what commerce was not constant (few dealers).




Since the funds were received from the company’s suppliers, there were no problems concerning

finances. However, despite surviving the competition, in Mexico, tax burdens were heavy and health

insurance costs, electricity and fuel costs including gasoline were high.

4. The existence or nonexistence of public support during these times (please explain in detail if

you did receive support)

To participate in trade fairs, the company received support from an SME fund of the Mexico

Ministry of Economy for 50% of costs for securing exhibit space and transport costs of materials for

samples and exhibits.

Support was also received from the federal government for 50% of international transaction

consultant fees and 30% of human resource training costs.

85

Support was received from BANCOMEXT (national trade bank) to participate in trade fairs.


The company had an opportunity to enter commerce with Mexican products that targeted

supermarkets in Central and South American in particular.

The joint manger was an international transaction consultant and had knowledge and information

concerning international transactions, thus activities were easy.

The largest factor was that there were suppliers who could obtain capital support.


The company is considering opening sales offices in other Central and South American countries

such as Costa Rica and El Salvador in the future. At that point, the company will not only be simply

exporting, but hopes to invest and set up offices, warehouses and the like. As for the mid- to

long-term, the company hopes to export products with even greater added value to North America,

Europe or Asia.

It is expected that the Mexican government will continue its free trade policies in the same way as

Panama with the Free Trade Agreement.

In the case of APEC countries, being able to do business is interesting just when it became a free

trade zone. However, information concerning APEC is lacking, such as how to manage, for example

human resources, support, technology, etc. in that region.

86

Country: New Zealand - Institution

Organisation Name New Zealand Trade and Enterprise

Organisation Type Government agency

Size Annual Budget: NZ$141.3 million Staff: 600

Overseas Network 38 offices overseas

URL www.nzte.govt.nz

1. Basic idea and policy of the agency, institution or organisation to promote the globalisation

of SMEs. Include: evaluation of globalisation in overall SMEs policy, key areas to promote

(export, import, alliance with foreign companies, foreign investment etc) and key industries.

New Zealand Trade and Enterprise (NZTE) is the New Zealand government’s trade and economic

development agency and is funded by the Ministry of Economic Development. Its responsibilities

include reducing the economy’s heavy reliance on exports of primary products and boosting the

value-added contributed to the economy by smaller companies. SMEs represent around 96% of NZ

businesses and are seen as the engine of the NZ economy. NZTE’s mission is to increase the

international connections of New Zealand businesses and help them become more internationally

focused and capable of engaging in global markets for trade, acquisition of knowledge and foreign

investment. NZTE does this by facilitating collaboration between industry, government and

international partners.

NZTE’s current strategy is to identify sectors of the economy offering high-growth potential and

to assist businesses that will contribute most to the growth of those sectors. The sectors NZTE is

currently focussing on are biotechnology, creative industries, food and beverage, information and

communications technology (ICT), education, wood building and interiors, specialised

manufacturing and tourism. In the manufacturing sector for example NZTE works with many

businesses that produce low volume, high value niche products. NZTE assists these companies in

developing manufacturing clusters, long-term growth strategies, and access to export markets.

Targeted industries in the manufacturing sector have included aviation, engineering, designer

furniture, advanced materials and marine manufacturing.

2. Measures and budget (including financial support) to promote the globalisation of SMEs.

NZTE’s budget is directed at providing a range of export development services and market

development programmes to SMEs in the industry sectors it targets. It provides customised

assistance to SMEs with high growth potential in the form of management capability appraisal,

advice and training to help them make better investment decisions. There are a range of services and

grants offered by NZTE to SMEs wanting to increase their international activities. In the 2005/06

Budget the government allocated funds for the following business support schemes:

87

Foundation Services

1) Business Information and Advice (NZ$7.813 million)

Includes a range of business support services and programmes that provide information and advice

to business, focusing in particular on small businesses, entrepreneurs, start-ups and new exporters.

2) Training and Capability Building (NZ$11.962 million)

Training to improve the management capabilities of small businesses, entrepreneurs, start-ups and

new exporters.

Growth Services - Identifying and Leveraging New Business Opportunities (NZ$30.805 million)

This fund provides support for NZ businesses with medium to high growth potential, to enable them

to identify and pursue new international business opportunities.

Enterprise Development Fund (NZ$5.274 million)

Assistance for entrepreneurs and businesses to undertake advanced training, engage a business

mentor or seek specific management advice and/or undertake international market development

activities.

Market Development Assistance Fund (NZ$6,107,000)

Encouragement for the integration of more New Zealand businesses into global markets by

facilitating the creation, development and expansion of overseas markets for New Zealand goods,

services, intellectual property and know-how.

Source of figures: NZ Government Budget 2005/06.


NZTE plays a key role in implementing the current Labour Government’s overall economic

strategy, called the Growth and Innovation Framework, which is designed to increase NZ’s per

capita income ranking to the top half of the OECD. This strategy places special importance on

growing businesses and industries in which New Zealand is internationally competitive and where

there is potential for high growth. It has recognised the high growth potential of the biotechnology,

ICT and creative industries sectors, which have therefore been given special attention and funding.

NZTE has been given the task of identifying and taking advantage of opportunities for economic

development by connecting international opportunities with New Zealand’s industry and business

capabilities. It will continue with its objective to develop internationally focused businesses. It also

aims to increase SMEs contributions of sustained added value to the NZ economy, as a result of their

88

engagement in international markets.

The NZ Government has been developing a framework to evaluate the agency’s effectiveness.

Over the next three years NZTE will be working with the Ministry of Economic Development and

the Ministry of Foreign Affairs and Trade to evaluate the outcomes of its various business support

programmes.

89

Country: New Zealand - SME

Company Name Interactive Technologies Ltd (ITL)

Type of Business Software development company

No. of Employees 50

Overseas Network Distributors in Australia and Singapore

URL www.serkoonline.co.nz

1. Details of business

Interactive Technologies Limited (ITL) is a software development company that provides travel

solutions and services to Australasia’s leading travel companies through the SERKO® brand. The

company develops solutions for the travel procurement industry. The SERKO® brand is one of the

only products in the world to serve the world’s top five travel companies in multiple countries. Over

the years ITL has been re-engineering the procurement of travel across the travel lifecycle and

provides services within the retail, corporate and online travel procurement markets.

2. Background, potential and reason for SME to start up the business

The two co-founders, who met while studying IT at university, joined forces in 1998 to create a

travel software development company after identifying opportunities in the travel market. Originally

established to fill a gap in the domestic retail travel market, they quickly saw the opportunity to take

their technology international.

3. Problems/difficulties your company faced before/after setting up the business (financing,

human resource management, structure management, lack of information, marketing,

language etc)

Problems ITL faced initially included access to structural management and business planning

processes, a lack of relationships with both potential customers and suppliers and

availability of financial resources.

4. Availability of government support (from NZTE). Please detail public support actually

obtained if any.

- In March 2004 ITL received NZ$5000 from NZTE under its Enterprise Development Fund for the

commissioning of market reports on the corporate travel market in the UK.

- In October 2005 ITL received funding from NZTE under its Growth Service Fund to enable them

to commercialise on a business opportunity stemming from marketing efforts in Singapore. The

support took the form of a 50% rebate to defray travel costs and the costs of producing marketing

materials for making presentations to potential business partners.

90

- ITL has also been selected as a finalist for the 2005 New Zealand Trade and Enterprise (NZTE)

Export Awards.


ITL’s achievements can be attributed to the continual involvement of end-users in the design and

advancement of the solutions, which they believe is directly related to the high adoption rate and

success of the product.

The ITL management team believes it has a unique and effective approach to innovation and

leadership, which it calls the Critical Stakeholder method. The critical stakeholders for ITL are

clients, distributors, the ITL team, the company owners, critical suppliers and their strategic partners.

For each of these critical stakeholders they have a vision. These stakeholder visions have been

broken down into the ideal or “dream” situation they would like to achieve. The ITL management

team has prioritised this detailed vision and uses the vision priorities as “drivers” as they formulate

product and service strategies. The goal is to use innovative thinking to translate the “desirables”

into “deliverables”.


ITL’s revenue has grown over 550% over the last 3 years and was rated as the 62nd Fastest

Growing Company in Asia Pacific by consultancy firm, DeLoitte. In December 2004 ITL was

floated on both the New Zealand and Australian stock exchanges under the Gullivers Travel Group

(GLS).

Exports now account for almost 80% of the company’s revenue. Over the last two years ITL has

expanded in Australia with marketing opportunities now being established in Singapore. It expects to

start planning its entry into the UK and USA markets in the near future.

91

Country: New Zealand - SME

Company Name New Zealand Pharmaceuticals Ltd (NZP)

Type of Business Manufacturer and exporter

No. of Employees 92

Overseas Network Agents, distributors and direct sales in Japan

URL www.nzp.co.nz

1. Explanation of the business, including import / export activity, International business relationships, foreign market penetration, recent business development

New Zealand Pharmaceuticals Ltd (NZP) is a leading industry player in the development of the

biotechnology industry in New Zealand. It manufactures and exports pharmaceutical intermediates

and diagnostic products for the world’s leading pharmaceuticals and biotechnology companies. It

also produces a range of dietary supplements.Products include bile acids and derivatives, specialty

synthetic carbohydrates, proteins, peptones and amino acids.

NZP is certified cGMP and holds EDQM Certificates for most animal-derived products, Drug

Master Files and a Medicines Licence. NZP exports almost all of its products and the primary market

is Japan. NZP uses a network of agents and distributors and is also developing direct sales to

customers. It is developing two major initiatives, one in the dietary supplement and functional food

area through a subsidiary company called Just the Berries Ltd (blackcurrant powders and juices) and

carbohydrate chemical synthesis.

2. Background, prospects and reasons for the SME to start up the Business NZP has been operating for over 30 years, but has recently begun experiencing very high growth

and taken on an extra 15 staff in the last year. The company was originally established as a joint

venture by the meat industry and Tasman Vaccine Laboratory with the aid of a grant from the

government funded Development Finance Corporation in the early 1970s. Its purpose was to add

value to the meat industry (which in those days exported only frozen animal carcasses), by

developing a commercial steroid extracted from gall bladders to be used as a raw material for the

pharmaceutical industry.

3. Problems/difficulties the SME faced before / after setting up the Business (financing, human resource management, structure management, lack of information, marketing, language etc)

NZP faces the problem of obtaining information about the market in Japan from independent

sources. Currently information from Japan is accessed primarily through a Japanese part owner of

NZP. The constraints on gathering information from an independent source are the language barrier

and the financial cost of hiring technical consultants that can communicate in both Japanese and

English.

92

4. Availability of public support (please detail public support actually obtained if any) NZP is privately held with strong cash flows. It has however received support from NZTE in the

form of two grants in 2004 coming to a total of around NZ$500,000 under its Growth Service Fund

scheme. These funds were granted to assist business development in its export markets for chemical

synthesis, specializing in carbohydrates. NZP also received extra personnel support under NZTE’s

Pathfinder Programme without cost to NZP to hire a marketing consultant with the aim of increasing

sales to overseas customers.


Meeting the customer’s expectations of value for money and being able to deliver the correct

product on time and within the required specifications.

6. Outlook of the business and your company’s vision The outlook for NZP is very bright. Our vision is to be a leading producer of biochemicals, dietary

supplements and carbohydrates.

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Country: Peru - Instituion

Organization PROMPYME (El Centro de Promoción de la Pequeña y Micro Empresa;

small/mini company promotion center)

Organization format Government

Scale Budget: 1.7 million dollars annually; no. of employees: 97


URL www.prompyme.gob.pe




etc.)).

The purpose of this center is to promote small and micro company funds and services in Peru to

access markets in Peru and abroad. To this end, the center conducts the following activities to

develop products/services and develop/facilitate IT technology.

Market outlook: provide information needed for small and micro companies to enter markets in

various fields in Peru and abroad.

Suitability of supply: To promote the “suitability of supply” by small and micro companies for

products demanded by the market, the center provides services such as technical training and

technical cooperation. In so doing, the center develops a mechanism that aims for stronger product

competitiveness in addition to enabling access to financial markets.

Promotion of commercialization: Once “suitability of supply” is complete, the center promotes

commercialization of products development with medium to large companies using the

commercialization mechanisms in the market.

The center supports small and micro companies in all economic fields, and does not limit to

particular fields. However, currently it is taking initiative in expanding the direct or indirect export

capabilities of small and micro companies.



Responses to globalization:

(1) Trade consultation

(2) Promotion of participation by small/micro companies in international events

(3) Strengthening of collaborations among companies with latent export capabilities

(4) Promotion of indirect exports by strengthening tie-ups between small/micro company producers

and export companies.

94

Estimated budget for capability development project (GECEX) to form export clusters: 1.5

million dollars to finance (World Bank)


Future outlook for the GECEX project:

This project aims to develop the capabilities of small/micro companies to participate in export

clusters suited to the demands of international markets. The project period is for two years, from

December 2004 to December 2006 and comprises three stages. The first stage is “strengthening the

structure” (2005) wherein the capabilities of center staff and staff in local governments (10 states)

are developed. Surveys are conducted with 3,000 companies in 10 states of which 2,500 companies

that can export in the future are registered in the center’s information system. The second stage is

“strengthening small /micro companies” (2005-2006) wherein surveys of 1,800 companies’ business

assessments are surveyed, of which 800 will undergo capability developed to begin exporting. The

third stage is “business collaboration” (2005-2006) wherein 240 companies are chosen using a

vertical labor specialization scheme. Also, around 10 consortiums are formed with 10-15 companies

per consortium.

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Country: Peru - SME

Company Name Alpa Exportaciones (Alpa Export Company)

Industry Apparel trade

No. of employees 2


Company URL None




Export of alpaca and cotton goods, etc.



The company was established to export apparel goods to Venezuela as the founder had connected

with Venezuela.




Problems with quality of supplied raw materials and deadlines for delivery of raw materials.



Trade consultations with PROMPYME and export promotion commission PROMPPEX

(Comisión para la Promoción de Exportaciones)


Diversification of markets and customers


The company plans to develop new importers and diversify markets.

96

Country: Peru - SME

Company Name Consorcio Artesanias MERINO S.A.C. (Merino)

Industry Sale of handicrafts

No. of employees 8

Overseas offices Sales office in Miami, US.

Company URL www.armesac.com




Manufactures handicrafts for export. Employs skilled craftsmen in various regions of Peru, and

provides them their own workplaces as well as various facilities.



The founder had experience in handicrafts. Later he studied trade and understood that export was

necessary to develop a company, thus he began to export.




The first problem faced was that of finances. Then it became clear that operation costs were too

high. Thus, the company was affected by price competition with Mexico and China in the US market.

Also, while the company is attempting to enter the German market, language problems are a barrier.



Company employees studied trade at PROMPYME training course. Thus the company gained

information on good methods that should be chosen to develop new markets. The company also

participated in seminars held by PROMPYME.


To succeed, innovative designs and colors are extremely important. These considerations are

relatively significant when entering a new market.


97

Looking at the medium-range, the company plans to focus on the US and Europe and will focus

its efforts into exports. In the long-term, it plans to set up an overseas office to effectively make use

of distribution channels. It also believes that training skilled workers, and design innovations in

particular, are the most important in achieving medium to long-term success.

98

Country: Philippines - Institution

Organization Name Department of Trade and Industry – Region XI

Organization Type Public Institution

Size Annual Budget (Year 2005): Php 55.19M

Staff : 120 (include the Regional Office and Provincial Offices and

Ebiz Center)

Overseas Network Foreign Trade Service Corps (FTSC) in 26 international posts

URL/Website www.dti.gov.ph (Maintained by DTI Head Office)

www.emindanao.ph (Maintained by DTI-XI)

１１１１．．．．Basic idea and policy of the agency, institution to promote SMEs globally (including overall SME policy in addressing the challenges of globalization, key areas to promote such as exports, imports, alliance with foreign companies, foreign investments, etc. and key industries.)

Major Policies:

- The Magna Carta for small enterprises (Republic Act 6977 as amended by RA 8289). This

special law lays down the basic policies for SME promotion, provides definition of SMEs,

and directs the establishment of the institutional framework for the SME promotion system.

The Magna Carta stipulates a mandatory lending quota for financial institution at 6% of

loanable funds to small enterprises and 2% to medium-size enterprises.

- Barangay Micro-Business Enterprises (BMBE) Act (RA 9178) was enacted to support

eligible micro-enterprises as well as the informal sector through incentives to registered

BMBEs, exemption to income tax, reduction in local government taxes and fees, exemption

from payment of minimum wages, financial support from government financial

institutions, and technological assistance from government agencies.

Industry Clustering approach

Through the advocacy of DTI-XI, the development and promotion of SMEs in the region is

carried out through industry clustering approach which is now adopted and integrated in the

Davao Region Medium Term Development Plan 2004-2010. Eight (8) industries based the

region’s comparative advantage have been prioritized for the planning period, namely: Banana,

Mango, Coconut, Seaweeds, Wood, Mining, Tourism and ICT (focusing initially on e-services).

Comprehensive and focused interventions for improving managerial and technological

capabilities and for tapping business opportunities shall be provided to both the individual

SMEs and the industry clusters.

This strategy is intended to enhance and sustain competitiveness of the SMEs in the local

99

and international markets.

Industry Clustering involves forging alliance with international industry players and investors

in the national and international scene. At the local level, it requires active private-public

partnership and collaboration.

Davao Express Business Center

DTI-XI also advocates the improvement of the operational environment for SMEs with the

establishment of the Davao Express Business Center (EBiz) which is housed at the DTI

Office. The center provides a one-stop shop for business registration and licensing, investor

assistance and investment incentive facilitation. It hopes to achieve the following

objectives : simplify business registration process, reduce red tape, and improve the survival

and growth of small businesses.

2. Measures and budget (including financial support) to support SMEs globally Approximately 65% of the DTI-XI annual budget is allotted for the discharge its business

development function. The remaining amount is for its consumer welfare, regulatory and

administrative function.

Performance on Business/SME Development is measured the following:

- amount of investments generated (with annual increase of 15%)

- jobs created/generated (with annual increase by 15%)

- exports earnings (with annual increase by 10%)

- number of SMEs assisted

- industry associations/networks established and maintained

3. Outlook and prospects Davao Region is expected to approximate its 2005 growth target of 4.5 for the following reasons:

- The Region to sustain investments in terms of project commitments

- The region to sustain export sector performance

- Strong government support to M/SME

- Services sector to get boost from trading activities, ICT and tourism

- BPO locators to intensify interest in the Region as the industry expands

- Mining industry to be revived with the Pujada Nickel Exploration Project, Kingking Copper

Project and Amacan Copper Gold Project.

- Agriculture will remain strong

100

Country: Philippines - SME

Company Name HUBPORT INTERACTIVE INC.

Type of Business IT Solution Provider

No. of Employees 35

Overseas Network UK and US

URL www.neuracom.com / www.hubportinteractive.com / www.neuracom.co.uk


Hubport Interactive, Inc. provides a wide range of IT development services: e-commerce online

stores, corporate websites, web applications, business applications (accounting, inventory and

payroll), mobile applications and graphic design.


Hubport Interactive, Inc. was founded in 1998 when the web was starting to make an impact in

commercial activities in the region. It was commissioned to develop the first government website

of Davao City, and was also the first business portal for SME's in that same territory. This business

portal eventually expanded to the entire island of Mindanao.

Hubport Interactive, Inc. focuses on IT development for SME's, and in return, is highly supported

by the business community, making it the leader in IT / Web Development for SME's.

3. Problems/difficulties the SME is facing before and after starting up the business (specifically

in the aspects of financing, human resource management, structure management, lack of

information <marketing>, language, etc.)

The initial hurdle of Hubport Interactive, Inc. was managing the adoption of web technology by

SME's who were only beginning to be aware of the advantages of these technologies for global

competitiveness. Climbing this initial adoption curve also resulted in financial difficulties brought

about by slower growth of revenues. The company had to invest in marketing efforts aimed at

educating the target market.

At the same time, maintaining skilled human resource also was a challenge. Investments in

training for skills are sometimes lost as talents move to companies located in Metro Manila, offering

higher salaries.


There are no available public supports for our industry here in Davao City.


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The critical success factor in Hubport Interactive, Inc.'s business is developing and maintaining a

sharp pool of project managers and programmers, keeping them up-to-date with the latest

technologies. They are the brains that run the engine of Hubport Interactive, Inc. and its network of

clients.


The company will continue to ride the global outsourcing trend by marketing its services to SME's

beyond the borders of Davao City and the Philippines. It will form alliances in various developed

nations to provide best value in delivering web technologies and services.

It will also be developing web products such as business web application packages and website

properties to grow its intellectual property assets.

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Country: Philippines - SME

Company Name Lane Systems Inc

Type of Business Solution Provider focusing on Telephony, Business Systems, and Auto-ID

No. of Employees 20

Overseas Network

URL http://www.lanesystems.com


Software development and consulting focusing on computer telephony, business systems, auto-id,

and others. Our expertise is in building software and we also do custom software that either stands

alone or integrates with large computer systems as add-ons for specific extensions.


We started 1995 as an offshore software provider for North American companies. Our prospects

are large corporations who needed software services at a competitive price. Reasons for starting

up is because Davao City, for the longest time, has been producing human resources in IT for Cebu,

Manila, and overseas. We’d like to take advantage of the human resources here in Davao while

doing outsourced projects.

3. Problems/difficulties the SME is facing before and after starting up the business (specifically

in the aspects of financing, human resource management, structure management, lack of

information <marketing>, language, etc.)

The difficulties of the companies has always been the following (in proper order)

International Marketing

Human Resource – as to hiring since most of the good graduates leave Davao

Financing – there are no I.T. friendly financing


There are no available public supports for our industry here in Davao City.


The success factor of the business is our perseverance of staying in the business. We have our

ups and downs and during the down times, it is our dream to hopefully succeed in the international

software marketplace that keeps us hanging on.


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We look forward for more acceptance of

Outsourcing projects to Davao City

The local market for the products and services we offer

We always believe in our company’s slogan “Process improvement through technologies” and

we’ve been able to successfully produce and continue to offer cutting edge business solutions for

modern business challenges.

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Country: Russia - Instituion

Organization OPORA (National Russian SME Association)

Organization format Social organization

Scale Head office in Moscow and 71 branch offices throughout Russia


URL http://www.opora.ru/




etc.)).

This organization serves as a single voice for SMEs nationwide and makes proposals, etc. to the

government concerning the drafting of bills and amending policies, etc. It cooperates with the

government to create an environment such that SMEs can achieve healthy development. By

promoting innovation, it strengthens the competitiveness of SMEs. To promote SMEs, the

organization realizes an effective division of roles (PPP) with the government and private sectors.



Making proposals to the government and Federal Assembly related to the drafting of new bills to

promote SMEs. It cooperates with implementation of policies by participating in project competition

selection committees and cooperating in formulating policies by the economic development and

trade ministry to promote SMEs. It participates and proposes specific SME promotion projects in the

government’s corporate competitiveness improvement council, which is chaired by the prime

minister. It supports the construction of industrial zones and techno parks by the Public Private

Partnership (PPP). It lobbies the government to reform the tax system to promote SMEs, such as

reducing the import tariff for high-tech equipment. It reduces excessive government participation

and eases regulations with respect to SME activities by promoting government reform. It lobbies the

government concerning measures against bureaucratic stagnation.


Including OPORA proposals, the new government reforms put forth by the Russian government

are the most important in terms of easing regulations for promoting SMEs, and specific

improvements can be expected in the business environment for SMEs.

Eighty percent of SMEs focus on commerce. Even if a company wanted to start up in another area

such as manufacturing, there are many restrictions and regulations that have made it difficult for

105

SMEs. However, there are now managers who have achieved a certain degree of success and who

want to expand their business into new areas. It is important to provide support, particularly in

respect to systems, such as enhancing the incubator system, so that these entrepreneurs can expand

their businesses.

Further SME innovation is needed. To that end, the organization is lobbying the government to

enact favorable measures. Adapting businesses to high-tech environments is one such innovation;

thus it is important to build an environment such that foreign companies can bring capital and

technology into Russia.

An effective partnership between public and private sectors is crucial. For example, building an

environment in which SMEs can startup easily such as in the form of industrial zones and techno

parks. In such cases, the government can build the infrastructure such as the preparing the land for

such zones and setting utilities, etc. while the private sector can manage the industrial areas and

techno parks built there as well as carry out specific operations such as factory construction, etc.

To promote SMEs, the organization has surveyed experiences and model cases in Europe, North

America and Asia , but, it wants to absorb knowledge in particular from Japan, which has significant

experience in innovation. It wants to collect information regarding defining an SME,

measures/systems for promoting SMEs, division of public and private sector, and specific industry

zones/techno parks.

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Country: Russia - Institution

Organization Ministry for Economic Development and Trade of the Russian Federation

Organization format Russian governmental agency

Scale Total of number of employees at the ministry: 2,049 (as of November 1,

2005)

Overseas offices Russian trade deputy offices set up in 86 locations in 74 countries

URL http://www.economy.gov.ru/wps/portal/english




etc.)).

To open economic doors in tandem with the participation in WTO and to respond to the

globalization of the economy, the Ministry believes that SMEs fulfill an important role in increasing

employment and strengthening industrial competitiveness. The Ministry, as a government body,

promotes the increase of SMEs themselves as well as innovation in SMEs

In increasing the number of SMEs themselves, efforts have been centered on easing regulations,

such as simplifying procedures for setting up companies, reducing items requiring approval and

reducing national governmental control .

In promoting innovation, a business incubation function has been provided, but additionally, the

Ministry has been supporting venture funds and innovation funds to promote SMEs moving into

exports starting this fiscal year.

In implementing these polices, basic approaches include 1) tie-ups between the federal

government and local governments; 2) Selecting targets for subsidies concerning SME promotion in

with the cooperation of other economic organizations in addition to related agencies of the federal

government and 3) tying national treasury subsidies with private investments and using the part from

the national treasury subsidies to enhance the infrastructure.



Investment projects are subsidized to promote SMEs in regions using competitive selection

methods based on the SME national support law and laws and regulations set by the government

concerning 2005 budget outlays of the Russian Federation for the national support of SMEs.

The policy, which started from last fiscal year and takes full effect from the current fiscal year

onward, the budget scale for FY 2005 in outlays from the Russian government was approximately

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1.5 billion rubles (1 dollar=28.8135 rubles: Central Bank public rate as of November 11, 2005) and

is expected to reach 3.0 billion rubles in FY2006. Regional governments are also contributing the

same subsidies.

A competition selection subcommittee, consisting of representatives from agencies related to the

MEDT and economic organizations concerned with promoting SMEs, has been set up to review and

select specific investment projects put forth by regional governments and award subsidies to selected

projects approved by the Cabinet.

The fields targeted by the subsidies are not industry specific, but are for supporting business

incubators, promoting innovation and export. In supporting business incubators, an office building is

being renovated and an infrastructure is being built using national treasury subsidies and to draw in

SMEs. For promoting innovation, seven local governments including Moscow City, Moscow State

and the Republic of Tatarstan have made joint investments, and private investors are being brought

together to form a fund. Micro-financing for SMEs is being supported, a micro-finance

subcommittee has been set up upon deliberations with city banks throughout the country, and

banks are encouraged to finance SMEs.


Systemizing the maintenance of infrastructure to promote SMEs will be an issue in the future. A

number of measures exist for maintaining the current infrastructure; however, it is not systematic.

As for promoting exports, there is a proposal to build a national bank in FY2006 to specialize in

promoting exports. Presently, the RUS Ex-Im bank (Russian export-import bank) already exists;

however, it is on a small scale and limits its investments to focus on major companies. The

government has been debating whether to increase investments in the RUS Ex-Im bank or to create a

new bank based on the RUS Ex-Im Bank.

In particular, there are expectations for the role of foreign companies in creating venture funds.

There are still few venture investors in Russia with professional skills and know-how. Creating an

effective venture fund is an important issue; thus it is necessary to attract excellent investors. The

majority of Russia’s investors are major banks, and venture funds for SMEs are significantly less.

Consequently, cooperation from foreign companies and investors is becoming crucial.

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Country: Russia - SME

Company Name Medpharmservice

Industry Development and product of medical facilities

No. of employees 70


Company URL http://www.mfservice.ru/English/Aboutcompany/




The company has acquired ISO9001:2000 and IQNet certification and is carrying out trade

negotiations to begin exporting its products to Belarus, Ukraine, Turkey and Pakistan.

In 2004, the company visited an international trade fair in Düsseldorf. In 2006, it plans to exhibit

at international trade fairs in Dubai and Düsseldorf.

It is in negotiations regarding cooperation with a German company, with the establishment of a

joint corporation under consideration.

However, regarding the relationship of company’s business with globalization, while considering

foreign involvement and tie-ups with foreign countries, the company has developed domestic

products through Russian R&D and competed with foreign products in aiming to acquire market

share in the Russian market with domestic products in the relevant fields that ,have in fact been

dominated by foreign products up until now.



The company is located in Kazan, the capital of the Republic of Tatarstan in Russia. Kazan is a

city with great potential in R&D as well as production areas and mutual cooperation has been active

between companies, research institutions and institutions of higher learning.

With this as the background, graduates of the then Kazan Aviation College and a group of young

internal medicine doctors started the company by creating being the first in Russia to create all of the

required facilities, equipment and machinery needed for endoscopy surgery in 1993.

Endoscopic surgery began in the 1980s in Germany and France, but later expanded all over the

world, including Russia. However, equipment for such surgery was brought in from German, U.S.

and Japanese companies. It promoted sales of the company’s products to medical institutions in

Russia while introducing endoscopic surgery.

Much attention from various medical institutions in Russia was given to the products as the first

domestically made products. Compared with the foreign products, the strength of the company’s

109

products was low costs without significant sacrifices in quality.




When the company started up, the major problem it faced was the extremely high interest on the

financing needed. There were also various issues including having the company assets used for

collateral and problems specific to the market in Russia.

In moving into foreign markets, the company did not have an in-house specialist with

international business knowledge and skills and there was also a lack of information. The company

still does not have the leeway to develop human resources itself. Also measures of the

government/public organizations etc. supporting such activities are insufficient.



In addition to there being absolutely no support from the government, the company has high taxes

to pay.

However, to add for fairness's sake, in the 1990s the government of the Republic of Tatarstan

adopted a general program to set up facilities for endoscopic surgery in treatment institutions in the

Republic and to that end funding was used from the President of the Republic Fund. Thanks to this

program, all of the surgical treatment institutions in the Republic of Tatarstan have abdominal

endoscopy surgery units and the company’s products have also been used in such facilities.


(1) Place with latent ability in basic sciences, R&D and production organization such as Kazan

(2) Jointly working with technicians and surgeons

(3) The products represent a new expanding market in Russia


In the ten years since the company was founded, it has successfully impacted the leading

companies in Russia that produce devices and materials for endoscopic surgery which is comprised

of over 150 items. Endoscopic surgery is a process that is spreading worldwide and the number of

hospitals that employ it continues to increase. The company’s products business is seen as promising

in both Russia and abroad.

The company is making efforts not only with ongoing production but with the development of

new products. From 2004, it has been developing an ultrasound image dissector through

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collaboration with an expert group of the Bauman Moscow State Technical University (the top

technical university in Russia on par with MIT in the U.S.). The company has also begun providing

medical institutions with instruments for fixing unstable ribs, which was developed in cooperation

with Vishnevsky First Aid Science Institute in Moscow. In cooperation with experts of the Semashko

Railroad Hospital, the company has developed equipment and materials for entering through the

underarm and creating an artificial cavity to perform surgery while protecting a woman’s organs in

the chest region.

For business developments in the future, the company will introduce new technology, modernize

existing equipment and purchase new equipment that it lacks, thereby strengthening its material and

technical foundation. It will strengthen relationships with the endoscopy associations in Russia and

science and medicine related centers in the country as well as develop and test high technology

products that are competitive in markets throughout Russia and abroad to add to the continuous

production track.

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Country/Region: Singapore - Institution

Organization Name International Enterprise Singapore

Organization Type Agency under the Ministry of Trade and Industry

Size Annual budget: - Staff: 450

Overseas Network 37 overseas offices

URL http://www.iesingapore.gov.sg




key industries)

Formerly known as the Singapore Trade Development Board (TDB), International Enterprise

Singapore - or IE Singapore for short - is the lead agency spearheading Singapore's efforts to

develop its external economic wing.

Mission and Vision

IE Singapore's mission is to help Singapore-based companies grow and internationalise

successfully. Our vision is to be an expert agency in firm-level growth, market intelligence and

internationalisation strategies We offer a wide range of services in Singapore and overseas to help companies shorten their

learning curve and make the right connections through a 3 C framework (Competency, Connections,

Capital). In doing so, we provide market information, and assist enterprises in building up their

business capabilities and finding overseas partners.

At the same time, IE Singapore works to position Singapore as a base for foreign businesses to

expand into the region in partnership with local companies. Our vision is for Singapore's economy to

be entrepreneurial and knowledge-intensive, with globally competitive manufacturing and services

sectors. The country's unique advantages of strategic location, stable government, competitive

workforce, and pro-business environment make it the ideal launch pad for globalisation.

With 37 overseas centres around the globe, IE Singapore is uniquely equipped to help companies

succeed. With a successful, time-proven track record, IE Singapore will assist Singapore-based

companies to build up their business through the work four key business groups, the Corporate

Group, Enterprise Group, International Operations Group and Capability Development Group.

To provide market-centric opportunities for trade and investments, IE Singapore launched Network

Indonesia in May 2003, making it the third such platform after the successes of Network China and

Network India a year ago. These networks unite the many efforts of existing chambers and

associations, and provide a platform for firms to discuss and pursue business opportunities in the

112

three expanding economies. To date, the three networks have organised and supported over 160

seminars and events, and led several overseas trade and investment missions. The three networks

have been instrumental in bringing about business deals and consortia formation.

IE Singapore is also signatory to more than 30 co-operation agreements with trade promotion

agencies and small and medium enterprise bodies worldwide. In 2003, we saw relations with key

markets intensified at the provincial level - such as the launch of the Singapore-Zhejiang Economic

and Trade Council (SZETC) and the Singapore-Liaoning Economic and Trade Council (SLETC),

and the setting up of Jambi Promotion Office and the Vietnam Centre in Singapore. These councils

and centres will greatly facilitate two-way investment and trade flows between the Singapore and the

markets they represent.

All these initiatives were undertaken against a backdrop of Singapore establishing more Free

Trade Agreements with our trading partners. These FTAs represent super-highways on which our

goods can access the international market.

Our FTAs with Australia and the US went into force in July 2003 and January 2004 respectively.

Negotiations with India and Korea were launched as well. Trade talks with ASEAN and the People's

Republic of China, Bahrain, Canada, Egypt, India, Republic of Korea, Mexico, Pacific Three (New

Zealand, Chile, Singapore), Panama, and Sri Lanka have been announced or have commenced.

To enhance the practical benefits of such FTAs for businesses in Singapore, we launched an FTA

outreach programme that aimed to explain and highlight the workings of the agreements and the

opportunities they present, and to bring companies to partner countries for a first-hand look and to

meet prospective partners.


To provide greater customised services for our clients, we launched a new subsidiary, Global

Business Insights (GBI), in November 2003. GBI operates two divisions - Market Strategy Services

(MSS) and Business Support Offices (BSOs). Our BSO network has grown cover locations in

Shanghai, Beijing,Chengdu, Chennai, Dubai, Frankfurt, Guangzhou, Ho Chi Minh City, London,

Mexico City, New York and Tokyo. Our market entry consulting arm, MSS, opened its regional

office in Shanghai. During the year, GBI provided quality services to more than 100 companies in

China, India, Southeast Asia, Japan, Latin America and the US.

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During the year 2003, we organised over 100 business missions worldwide. These missions

explored overseas opportunities and assisted companies in a diverse range of industries, including

automotive, medical technology, logistics, real estate, electronics, lifestyle and F&B.

Missions were also organised to help Singapore-based companies source for business

opportunities with multilateral agencies such as the World Bank and Asian Development Bank.

In addition, we organised participation by Singapore-based companies in many local and overseas

fairs. Companies that took part in these fairs were grouped under the Singapore National Pavilion

which provided a strong brand name to attract foreign buyers for their products.

We believe that branding and design are critical to a company's ability to export its products and

services. In December, we partnered with the Ogilvy Group to launch the Global Brand Forum.

The forum anchored Singapore as a thought leader in the subject of branding. It featured

world-leading brand creators and practitioners - such as Anita Roddick, Narayana Murthy, Tom

Kelley, Scott Bedburry, Tom Peters and Deepak Chopra - and attracted over 700 delegates from 12

countries.

The year also saw the successful completion of the 2nd Singapore Brand Award which

recognises Singapore brands that have achieved success internationally; Singapore's top 14 brands

today boast an estimated total combined brand value of S$7.9 billion.

We also launched the "International Partners Programme" (iPartners) in October to catalyse the

formation of 40 consortia in three years, and aim to generate S$1.5 billion in new overseas sales. By

encouraging Singapore-based firms work in consortia and groups, they can widen their offerings to

compete for larger projects in international markets.

To strengthen firms' access to capital, IE Singapore ran several workshops and seminars in

partnership with financial institutions in 2003. Specialised themes such as trade financing, insurance,

cross border asset and cash-flow financing were discussed. During the year, our "iFinance

Consulting Programme" further supported eight companies in activities such as acquisition of

foreign entities, mergers of local companies, advice on initial public offerings, and overseas tax

issues. Under our "Regionalisation Finance Scheme", a fixed-cost financing programme assisted

12 companies in regional expansion.

In 2003, more than 1,000 Singapore-based companies benefited from our "Double Tax Deduction

Scheme" in support of their overseas marketing activities. This amounted to over S$39 million of

marketing expenses qualifying for double tax deduction, resulting in tax savings of S$8.6 million for

our firms.

In the area of design, we launched the "Design for Internationalisation Programme" which aims

to serve 1,000 companies in the next three years. To promote the adoption of design as a corporate

strategy agenda, IE Singapore organised the 8th International Design Forum which attracted over

10,000 trade visitors and 300 delegates.

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To develop human capital for internationalisation, IE Singapore launched the "Manpower for

Internationalisation Programme". More than 650 executives were trained with internationalisation

skills through overseas assignments.

To enable Singapore-based enterprises to keep abreast of business competencies and overseas

investment opportunities, IE Singapore's Resource Centre published a number of titles in 2003.

Among the publications produced were "Singapore Enterprises In China", "Venture India", "China

Business Law: A Guide for Lawyers and Entrepreneurs", "Singapore Brand Journey: Singapore

Companies in the Global Marketplace" and "Innovative Singapore Companies".

While we look to global markets for future growth, we also welcome foreign enterprises to base

themselves in Singapore. In November 2003, we launched the "International Enterprise (IE) Hub

Programme" to develop Singapore as the international hub for foreign enterprises to reach out to the

regional market, and to partner Singapore-based companies to jointly explore new markets.


Year of Internationalisation 2004

We believe 2004 to be a watershed year, heralding the next phase of external economic growth,

one that is different in structure, substance and strategy. It marks the beginning of a decade of

internationalisation which will be characterised by a trio of strategic thrusts driven by IE Singapore -

catalysing private sector-led internationalisation; maximising Singapore's connectivity with growth

markets; and promoting export of services, leveraging on Singapore's brand name.

As we continue on the journey to internationalisation, we are ever mindful that there will be as

many unexpected events as there will be opportunities.

IE is continuing these efforts for 2005 and beyond to assist in the internationalisation of Singapore

SMEs.

115

Country: Singapore - SME

Company Name Ya Kun International Private Limited

Type of Business Café chain operator and franchisor

No. of Employees 120 (direct employees); 300 (franchise-wide plus direct employees)

Overseas Network Indonesia, Taiwan, South Korea

URL www.yakun.com


Ya Kun Kaya Toast was founded in 1944 in Singapore. It is a contemporary Singapore-style café

offering traditional “kaya jam” toasts and a variety of hot and cold beverages. There are 21 outlets

in Singapore, 10 in Indonesia, 5 in Taiwan and 2 in South Korea. All overseas outlets are

franchised.

Ya Kun has the largest market share for kaya toast cafés in Singapore. It is also the winner of

several prestigious awards including Superbrand and SPBA Heritage Brand, and is regularly featured

in Singapore’s public media. Its kaya factory is HACCP certified, and supplies to all outlets in

Singapore and overseas.

Presently, Ya Kun is in talks with various overseas parties to introduce its unique café concept to

markets including Japan, Hong Kong and China.


Ya Kun Kaya Toast was founded as a coffee stall by Mr Loi Ah Koon (“Ah Koon” is the dialect

name of “Ya Kun”), an immigrant from China’s Hainan Island. It was set up as a means of

livelihood to provide for Mr Loi’s large family. The early-day customers were largely labourers

and poor migrants from the Telok Ayer Basin (near to the Singapore River). Over time, especially

after the 1970s, as the area transformed itself into Singapore’s financial hub, white collared workers

and professionals started to patronize Ya Kun Kaya Toast. By then, the humble coffee stall has

become a famous landmark in Singapore’s “food map”.

When Mr Loi passed away a few years ago, his youngest son, Mr Adrin Loi, saw the tremendous

goodwill in the name of Ya Kun and the potential of the business. He had the vision that the

number of outlets could multiply many folds across Singapore, and even overseas. Expanding the

business would also be a way for him to honour his father’s good name and turn it into a Singapore

legacy. He then proceeded to enlarge the management team and strengthen its internal capabilities,

which included the protection of its unique trade mark and the development of a robust café

operations and franchise system.

By 2001, Ya Kun has started franchising in Singapore. It also introduced the lifestyle of eating

traditional toasts and beverages in a modern café setting, thereby giving a new twist to Singapore’s

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food scene.



so on)

The greatest challenge facing the SME is the lack of availability in financing. Singapore banks

are generally reluctant to lend to start-ups, especially those in the food & beverage industry. As

such, little or no investment is made in building good infrastructure and systems for the business.

Another major problem is the lack of talents willing to work for the SME, especially those in the

less-glamorous industries (companies in the IT sector will find it easier to attract talents than, say, a

retail business). As a result, the management of the SME is often weak and unprofessional.

Usually, the SME receives a lot less attention from the government (be it any government) than, say,

the MNC receives. As such, they often have to grope in the dark and grapple with whatever

resources they have to succeed. Finally, going overseas poses another challenge for the SME.

Many have gone and failed. Perhaps it’s due to the lack of understanding of the foreign markets.


The Government of Singapore has been very supportive of Ya Kun. Many cabinet ministers

have cited its name in public speeches and case studies. The Singapore Tourism Board has been

particularly active and helpful in promoting Ya Kun’s name and café in its publicity materials and

events. SPRING Singapore provided funding for the franchise development and food-related

consulting projects. International Enterprise Singapore, another government agency, has shown its

support during the launches of Ya Kun’s overseas outlets. The Economic Development Board is

also keen to support Ya Kun, and both parties are currently working out the details (which are

confidential at this moment).

The local media have also been generous in giving Ya Kun very good coverage and publicity, and

even accorded it the status of a Singapore icon.


(1) The business owner’s vision is very important. It steers the company in the right direction, and

motivates its people as well. (2) Investments in brand and system development are also important,

as these will form the foundation of the business over time. (3) Quality of products and customer

service is another critical success factor. By emphasizing on this, Ya Kun has been able to please

customers for more than 60 years. (4) Innovation and consistent improvements are what keeps a

successful business going in the long term. This also helps to differentiate it from its competitors.

Finally (5) having the right people onboard ensures that the management is well-rounded, and is

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capable of executing the owner’s business strategies.


We believe Ya Kun can become a unique pan-Asian food & beverage business. It will be a

modern business concept that does not lose touch with the tradition of the food itself. The kaya

itself could some day become a global product, just like Singapore’s other global product “Tiger

Balm”.

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Country/Region: Chinese Taipei - Instituion

Organization Industrial Development and Investment Centre, Ministry of Economic

Affairs

Organization format Public organization

Scale


URL http://www.idic.gov.tw




etc.)).

The IDIC was established in 1959 under the Council for US Aid. In 1973, it came under the

jurisdiction of the Ministry of Economic Affairs where it remains to the present day. The principal

roles of the IDIC are to encourage investment in Taiwan by overseas investors including overseas

Chinese, support Taiwanese companies making investments overseas and support the procurement of

overseas personnel for companies in Taiwan. Recently, some Taiwanese companies that expanded

overseas have started wanting to shift their operations back to Taiwan. IDIC also provides support

for these corporations.



There are 80,000 corporations in Taiwan with combined revenue of 43 billion US dollars. Most

of these corporations are SMEs, therefore support for SMEs is a key part of IDIC’s work. In

particular, the organization encourages domestic-orientated SMEs who are reluctant to expand

overseas to consider the merits of doing so. To that end, IDIC provides finely tuned services

divided into three stages: 1) Preparatory 2) Implementation 3) Follow-up. For stage 1), IDIC

provides various information about prospective host countries, assists in the establishment of a web

site, holds regular briefing meetings for investors and organizes overseas inspection tours. In

stages 2) and 3), IDIC overseas branch offices provide support and problem-solving services through

intergovernmental negotiation.


IDIC’s future plans divide into two key areas. The first of these is to attract foreign capital to

Taiwan. IDIC will continue efforts to improve the investing environment such that foreign

119

investors will find Taiwan attractive.

The second key area is to support Taiwanese companies expanding overseas. Expanding

overseas markets particularly attractive to Taiwanese firms are the Indian market and the Central and

Eastern European market (new members of the EU). The IDIC is working to collect information to

ensure that Taiwanese companies do not fall behind in entering these markets. These activities

correspond to the initial preparatory stage of the three state scheme outlined above.

However, the organization is does not intend to provide any extra support beyond the current level

for companies wishing to invest in the Chinese market, where the attention of many other countries

is focused. This is because IDIC believes Taiwanese companies already have a sufficient level of

investment in China, and for national security reasons it does not believe it desirable to increase

investment in China any further.

Regarding investment in Japan, generally speaking Japan is expensive and not very appealing to

the majority of Taiwanese corporations. However, in certain specific fields, Taiwanese

corporations may be able to enter the Japanese market. Therefore, it is important for Japan to

disseminate information on what fields they would like Taiwanese companies to invest in, and why

doing so would benefit them.

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Country/Region: Chinese Taipei - Instituion

Organization Small and Medium Enterprise Association, Ministry of Economic Affairs


Scale

Overseas offices

URL http://www.moeasmea.gov.tw




etc.)).

The SMEA was established in 1981, but its predecessor, the International Economic Collaboration

Committee’s Small and Medium Enterprise Guidance Team was established in 1966.

There are 1.16 million companies in Taiwan (as of 2004), of which 97.8% are SMEs. Therefore

support from SMEs is an important pillar of the government’s economic policy. The principal roles

of the SMEA are to propose strategies for development of SMEs, provide guidance and supervision

for SMEs, implement various surveys of SMEs, assist in the introduction of new technology, assist

in the development of personnel and provide management guidance. However, to deal in particular

with the demands of globalization, SMEA has formulated a national development plan entitled

"Challenge 2008". In addition to the critical areas of providing support for the research and

development required to develop high value-added products, providing support for personnel

development, strengthening information collecting and dissemination capability and implementing

environmental policies, Challenge 2008 also provides support for the following areas: the

establishment of platforms for starting new businesses and business incubation, the integration of

financial support systems for SMEs, strengthening capabilities of SME management and guidance

systems, improving the technological capabilities of SMEs, upgrading the business environment for

SMEs and the establishment of new business projects and subsequent aftercare.



SMEA has budgeted for the following projects:

(1) Projects related to human resource development (50 billion Taiwan dollars)

(2) Projects related to the development of knowledge-based industry (100.5 billion Taiwan dollars)

(3) Projects related to global strategy (108 billion Taiwan dollars)

(4) Environment related projects (212.9 billion Taiwan dollars)

SMEA’s concrete policies can be divided into three categories: consulting and information

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provision, incubation and financial support. SMEA’s consulting services revolve around the

provision of information for SMEs attempting to start up new business projects. SMEA’s incubation

services have involved the establishment of 83 incubation centres since 1996. SMEA’s financial

support includes providing loans through various commercial banks, organizing loans to SMEs at

preferential rates (3% as opposed to standard interest rates of 8% to 10%). Furthermore, SMEA

provides active support for the development of human resources required to start up new business

projects and has also established a system to supply integrated support for R&D at SMEs, from the

development of technology through to actual commercialization.


The key multilateral relationships are with OECD, WTO and APEC. The key bilateral

relationships are with Japan, US, India, China and countries in Central and Eastern Europe.

Currently, global investors are placing increasingly more emphasis on the Indian market. India and

Taiwan have a good, complimentary relationship. In other words, Taiwan is internationally

competitive in the hardware market, whereas India is particularly strong in the software market, as

apparent from India’s booming digital contents and movie production industries. SMEA expects

that leveraging this complimentary relationship will lead to very much stronger economic ties.

Incidentally, the Xinzhu Science Park employs a large number of Indian engineers and Taiwan feels

it very natural to have a good relationship with India.

Turning to China, numerous Taiwanese companies are already active in the Chinese market.

Recently, however, problems including tax increases and rising labor costs have led to the

withdrawal of a significant number of companies. That said, the degree of dependency on China

remains high, and in the future SMEA would like to disperse this concentration of investment.

Through organizing such events as the "Match Make Seminar" and the "Taiwan Trade Virtual

Market", SMEA works to provide information on new markets.

The organization is also working to promote increased opportunities for exchange with APEC

countries through its "Incubation Forum" and "Businessperson/ entrepreneur centers".

Central and Eastern Europe is an unknown market for Taiwanese firms, and carries a substantial

element of risk, but by establishing a trust fund to be 80% of the companies list, SMEA believes it

can encourage companies to invest there.

Taiwanese companies have learned a lot from Japan, and will need to continue learning from

Japan further. As such, Japan remains an important partner. Throughout the world, it is considered

an objective fact that Japan still maintains a superior position in a variety of fields. If Japan

actively disseminates information about its expertise, then Taiwanese companies can be expected to

acquire an even deeper interest in Japan.

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Country/Region: Chinese Taipei - Institution

Organization Taiwan External Trade Development Council (TAITRA)


Scale 700 employees (Taipei headquarters only) Three regional branch offices

including one in Kaohsiung (Gaoxiong).

Overseas offices Overseas branch offices in 30 countries.

URL http://www.idic.gov.tw




etc.)).

Established in 1970. The Taiwanese equivalent of JETRO. Principally funded by government

subsidies with additional revenue from membership fees of member companies. Major operations

are supporting overseas expansion of Taiwanese corporations and supporting alliances between

domestic corporations and foreign corporations wishing to invest in Taiwan. Particular emphasis is

placed on arranging trade exhibitions and negotiations. The organization does not implement any

special SME policy, but the overwhelming majority of its clients are SMEs, and therefore by default

its major role is providing support for SMEs. Note that TAITRA’s mandate does not include

providing financial support.



The majority of Taiwanese SMEs are manufacturing firms, and as such SME policy focuses on

providing support for manufacturing firms to shift their production centers overseas. The

destination for the vast majority of these firms is China. However for reasons of national security,

TAITRA does not wish to increase the level of investment in China and , in fact, would rather it

decline. Therefore, one important role is to search for alternative host countries to replace China.

One important criteria for alternative host countries is an active economic relationship with Taiwan.

As such, TAITRA considered countries including Japan, U.S., South Korea, Australia and New

Zealand. However, all of those countries have particular advantages and disadvantages, and

TAITRA has yet to find the country attractive enough to replace China.

TAITRA’s second major SME policy is to provide information to Taiwanese companies. If

expanding into a country other than China, there will be many unknowns, and therefore providing

information about such countries is becoming increasingly important. As companies demand an

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ever more diverse range of information, TAITRA responds to those needs by implementing not only

market surveys, but also by providing a range of detailed information including information on

tariffs and comparisons between the industrial products of the country in question and those

produced in Taiwan.


TAITRA has been successfully carrying out its mission for over 30 years and in the future intends

to continue fulfilling the same role. However, TAITRA is also considering expanding into the

consulting business. This is because, in the near future, consulting services are likely to become

increasingly important in accurately understanding contemporary needs and providing accurate

information and finely-tuned services to Taiwanese companies expanding into a variety of regions.

Regarding investment in Japan, a Taiwanese chemical manufacturer moved its production base to

Japan at the end of last year. Although high costs were an issue, the presence of a very large,

high-quality consumer markets meant the move had merit. TAITRA believes that, rather than

taking a wide-ranging approach, Japan can encourage further investment from Taiwanese

corporations by offering individual target corporations favorable conditions for investment.

124

Country/Region: Chinese Taipei - SME

Company Name Moxa Technologies Co., Ltd

Industry IT (Designer and manufacturer of multiport serial boards).

No. of employees 290 employees

Overseas offices USA, Germany, China

Company URL http://www.moxa.com.tw




Moxa Technologies was established in 1987 by five former classmates from the same high school.

The Taiwanese name for the company, 404, was the number of their class. The company designs

and manufactures multiport serial boards. Into 2003, the company split into three entities, Moxa

Technologies, Moxa Networking and Moxa US in order to increase focus and efficiency of its

businesses. As the company is an IT-related corporation, it expanded overseas right from the outset.

North America is the company's major market and , since 2003, the company has focused North

American operations in Moxa US. Moxa Group’s total capital is 220 million Taiwan dollars. In the

field of multiport serial board design and manufacture, the company has grown into the world's

third-largest and Asia's largest corporation. Last year, the company was among the top 300 largest

corporate tax contributors in Taiwan. Moxa sells products developed in-house and does not import

goods from overseas or collaborate with foreign companies.



Moxa was set up by an engineer at a renowned high-tech firm who decided to leave the

company,and persuaded his former classmates who were working as software developers to join him

in establishing a new business. At the time, the world was in the grip of a high-tech boom, and

they predicted their chosen field would continue to expand. At the same time, developments in

Taiwan, such as the establishment of the Xinzhu Science Park favored high-tech corporations. In that

environment, the group's founders decided the chance of success was high, and took the risk of

setting up the company. At that time, the environment and conditions for high-tech related firms,

including government support systems, were very good.




125

At first the company allied itself with a computer manufacturer and produced computer-related

products. However in manufacturing industry, it is impossible to avoid layoffs, and the company

wished to develop into an organization that did not have to lay off its employees. Therefore, they

focused on the field of ‘soft assembly’ and worked to build their own sales channels. Moxa is a

group of Taiwanese software specialists. As the company expanded, problems of capital and

language difficulties did not arise.



The software industry does not require vast amount of capital, therefore Moxa’s own capital was

sufficient for growth. Moxa’s technology was developed in-house and therefore public support was

not required.


The most important factor in in-house software development is technical ability. Moxa was

blessed with a wealth of high-quality personnel, including its founders. However, engineers have

strong desires to be independent, and in some cases engineers left Moxa to establish rival firms.

Although this is a significant problem for Moxa, the founders also left other companies to establish

the firm and therefore realize that the important thing is not simply to be satisfied with the current

technology, but continually strive for better technology. Therefore, competition with rival firms is

also considered a stimulus for corporate vitality.


In the IT industry, technological progress is continuous, and competition is extremely fierce.

Therefore, companies are constantly required to reinvent themselves. Moxa’s policy is to take two

intersecting axes, one of original vision and one of strategic vision, and focus its core businesses on

the point where those axes meet. To be more precise, technology breeds new technology, and new

technology breeds new markets. That is the original vision, which could also be described as the

supply side. However, if original technology does not meet the needs of the times, new markets

will not form. Therefore we also need to emphasize strategic vision, or an accurate understanding

of market needs, and feedback such information into the supply side. Moxa believes that if the

company can supply products that accurately meet market demand, it will continue to survive as a

leading company in this industry.

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Country/Region: Chinese Taipei - SME

Company Name Triad International Corporation

Industry Trading company specializing in textiles

No. of employees Around 100 employees (around 50 employees in Taiwan)

Overseas offices China, USA, Canada, Mexico, Europe, Middle East, Asia

Company URL




Established in 1976. Specialist import and export trading company dealing in various textile

products. Products for export include textile materials and finished products. Major export

destinations are North America (USA, Canada, Mexico), Europe, Middle East, and various countries

in Asia. North America accounts for 50%-60% of exports. Most imports come from the

company's factories in China. When the company first moved its production facilities overseas, the

destination was Shanghai. The company dispatched 8 Taiwanese employees to set up the factory.

As production expanded, the number of Taiwanese employees dispatched to the factory was

expanded to 15.

The company deals with Japan via Japanese trading companies including Marubeni, Sumitomo

Trading Corporation and Nissho Iwai Corporation. However, Japanese consumers have a diverse

range of tastes and demand high quality standards. However, despite these demans, the volume of

orders is low, and therefore transactions with Japan are not profitable. On the other hand,

consumers in North America have more unified tastes and place large orders. Therefore it is easier to

make profit on these transactions. For these reasons, North America is Triad’s largest export

market.



The founder, Mr. Lin, established the company after leaving his former place of work. In the

beginning, the company was involved in a different industry, but transformed itself into an importer

and exporter of textile products after realizing that it could not compete with established companies

in the industry. The company selected the textiles business due to its high cost - high risk nature

which meant that there were few competitors inside Taiwan. Banks were also actively interested in

investing in the company, and just 10 years after its foundation it expanded into the US market.


127



In the textile industry, competition with foreign firms is very intense. Competition involves

aspects of both supply and demand, but in both areas, there are three important elements to be

considered: Price, quality and service. The reason that Triad Corporation has been able to survive

competition with foreign competitors is that rather than treating each of these elements separately,

the corporation has considered them as a package in order to take appropriate measures.

Human resources development is a particularly important factor for success in the trading industry.

The corporation pairs experienced staff with young inexperienced staff, so that the older staff

members may instruct their junior colleagues. This method has proved effective. As a result,

business know-how has passed smoothly from experienced staff to younger staff, and the

corporation has avoided the problem of insufficient human resources.

When the company moved its production base overseas it chose China, therefore there were no

problems of language or cultural friction. When it comes to sales, rather than negotiation skills

which require language ability, the key to success is price, quality and service. The most important

thing for salesmen at a textile trading company is to brush up their business know-how.



The company has been in business for over 30 years. During that period, Taiwanese

private-sector banks were very enthusiastic with regard to corporate lending. Therefore, the

corporation has not received any support other than the provision of capital from private-sector

banks, and, in particular, has not received any governmental support.


As stated previously, the first major reason for the corporation’s success is that it considers the

three elements of price, quality and service as a single package, and takes appropriate action based

on this concept. In other words, if the three elements are considered separately, then even if you

improve one element the other elements may remain unsatisfactory, and as a result you run the risk

of failing to provide a competitive product. On the other hand, in this industry, the market changes

very rapidly with regard to both supply and demand. Therefore, the development of human

resources that can deal rapidly with these changes is another major success factor.


Recently, global attention has been focused on the emerging markets of BRICs. In the case of

India, while it certainly has potential as an export destination, India's domestic market is already

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controlled by Indian companies, and therefore we believe there is little room for foreign company

participation. Furthermore, Indians have more ability in this industry than Chinese, and

competition with Indian corporations in other global markets is extremely fierce.

Turning to China, the company considers the Chinese market as being of continual importance as a

source of imports and destination for exports. Currently the largest export market is North America.

Going by the size of the North America economy, the company believes that the North American

market will continue to be significant.

However, Triad International Corporation is not cannot rely solely on existing markets and are

always looking to develop new markets. For those reasons, the company is looking at Southeast

Asia and Central and Eastern Europe and in the future intends to pour resources into exports to those

regions.

129

Country: Thailand - Institutuion

Organization Name Office of Small and Medium Enterprises Promotion (OSMEP)

Organization Type State Agency

Size Annual budget: 297.71 Million Baht Staff: 120 (Permanent

Staffs)

Overseas Network -

URL www.sme.go.th

1. Basic Idea and Policy of the agency, institution or organization to promote SMEs in the globalization [including, evaluation of the globalization in overall SMEs policy, key areas to promote (export, import, alliance with foreign companies, foreign investment, etc.), and key industries]

-The vision of the office is to be the central organization in motivating SMEs as well as individual

entrepreneurs towards the strength and stability that are to make them the main driving force of

the country’s economy.

2. Measures and budget (including financing support) to promote SMEs in the globalization

Strategies

- Strategies for the restructuring of SMEs to make them a principal economic and socialdriving force

-Strategies for improvement in infrastructure, Facilitating Business

- Strategies for the Promotion of stable, sustainable growth of SMEs

-Strategies for building the potential of exporting SMEs to International standards

-Strategies for developing existing and new SMEs

-Strategies of building up the potential of community SMEs

Budget: Annual budget of 297.71 million baht (2006)

130

Country: Thailand - SME

Company Name SME Trade Promotion Co., Ltd.

Type of Business TRADING FIRM

No. of Employees 27

Overseas Network -

URL www.smetrading.com,www.smeshopchannel.com,www.otopplace.com

www.otopchannel.com

1. Details of the business -Trading firm

Supply OTOP & SMEs products for the customers

2. Background, prospects and reasons for the SME to start up the business - The company was established by Office of Small and Medium Enterprises Promotion (OSMEP)

under Ministry of Industry, Thailand

- The Company aims to support OTOP products and SMEs to distribute the products via the

available distribution channel of the company

3. Problems/difficulties the SME facing before/after starting up the business (Financing, Human Resource Management, Structure Management, Lack of Information (marketing), Language, and so on) - Most of OTOP produce and SMEs are able to produce interesting product but the main problem is

that the Production Capicity, Quality, Standardization and Packaging as well as misunderstanding

for cost calculation.

4. Availability of public support (please detail public support actually obtained, if any) - The company is a subsidiary of Office of Small and Medium Enterprises Promotion (OSMEP)

under Ministry of Industry

5. Critical success factors of the business - Uniqueness in Products

- Availability of the Products

- Quality of the Products

6. Outlook of the business and your company’s vision - Being a Marketing arms for OTOP & SMEs products which newly enter to the market

- Vision of the company is to be a Valve creation Company

131

Country: USA - Institution

Organization Name US Market Access Center (formerly known as International

Business Incubator)

Organization Type Public Institution

Size Annual budget: $800,000 Staff: 5 (operations team)

Overseas Network

URL http://www.usmarketaccess.com/home.html

The US Market Access Center (US MAC) was founded by the city of San Jose in 1996. The

name of the institution was recently changed from International Business Incubator to focus its

service to provide foreign companies the marketing and sales support to accelerate their time to

market, maximize their sales potential in the US, and enhance their return on investment. In the last

year alone, the US MAC helped more than 60 companies from around the globe to launch their

products in the US.

The US MAC specializes in cost-effective US market entry for small and medium-sized foreign

enterprises (SMEs) planning to expand their marketing reach to the US. The policy of the institution

is to provide market information, strategy consulting, contacts and resources for SMEs so that they

can be successful in the competitive global market place. The US MAC also encourages SMEs to

form alliances with foreign companies along with bringing foreign investment into the domestic

market.

One of the roles of the US MAC is to identify the appropriate market and audience for SMEs to

do successful business. When promoting SMEs in the global market place, it is very important to

know the markets and targeted audience which you are getting into. Oftentimes SME owners have

very little experience in foreign markets. Thus, the US MAC plays a significant role in improving

the chance of survival for SMEs.

The cost of lease and operational expenses are subsidized by the city of San Jose. As a result, the

US MAC can provide their tenants with office space and office infrastructure at lower than market

prices. They receive assistance with business structure, law, accounting, tax strategies, marketing

plans and advertising. The US MAC also provides weekly office hours with 20 knowledgeable

professionals in the fields of marketing, sales, venture capital and US business. This helps them

focus on doing business rather than spending their efforts on setting up their office in the US.

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There are two types of services that the US MAC is currently providing to promote SMEs in the

global market place. The first service is to provide SMEs with a customized, detailed report on their

market and their competitors. It includes technology and market trends, potential distribution

channels, competitive and substitute products, competitive history and strategy, and market

projections. This report will empower SMEs to determine their opportunity in the US market and

make appropriate resource allocation decisions. The second service is to provide a qualified and

detailed list of customer or partner leads, including information such as the names of key decision

makers, departments, titles, contact information, and buying preferences, parameters, and priorities.

The US MAC then sets up qualified meetings for their tenants with key decision makers to generate

potential revenue. As an additional service, the US MAC provides the following:

l Recruiting local US sales and marketing team

l Localizing marketing collateral

l Naming and branding for the US market

l Business plan review and feedback

l Presentation review and feedback

l Trade show preparation, attendance, and support

l One hour to multi day meetings and trainings with Silicon Valley institutions and

companies

The goal of the US MAC is to increase the number of companies which are planning to

expand their market in the US as well as the number of customers for their tenants. The US MAC

recognizes that SMEs are considered to be one of the driving forces in global economic development.

It continues to help SMEs grow and successfully enter the US market.

133

Country: USA - SME

Company Name GeoVector

Industry Software for mobile devices

No. of employees Six full-time employees and over 40 contracted employees.

Overseas offices Auckland (New Zealand) Tokyo (Japan)

Company URL http://www.geovector.com




The company was established in 1998 and provides various solutions that rely on location-based

services. GeoVector uses its patented three-dimensional search engine technology in computer

games, advertisements and other applications in which location-based information is an important

element (1: Technology for inputting information into a terminal by pointing the terminal at a desired

object, 2: Technology that uses location and direction information to add virtual scenery to actual

scenery, 3: Technology that detects and responds to mobile terminal movement).

Currently GeoVector holds or has under application over 75 US and international patents.

GeoVector has offices in three countries, the US (headquarters) New Zealand (development of

service concepts and applications) and Japan (sales market). Major partners are wireless

technology enterprises, contents development enterprises, application developers, system developers

and contents integrators (in Japan these partners include Mapion, NEC Magnus Communications,

and D2 Communications).



The business started from the concept of “giving users reassurance”. In the mobile internet

business, three important functional elements are: personalization, location-based information and

transactions. Up until now, developers of mobile applications have found it difficult to effectively

utilize location-based information, and due to poor usability, the technology has only had limited

success. GeoVector’s technology reduces user stress by moving away from the concept of searching

for information on a small mobile telephone screen, but instead allows users to gain information

instantly by pointing at items that they can actually see. With the company’s system, your mobile

phone works like a computer mouse, and the real-world becomes your desktop. You can access the

required information as and when you want to.

As the first market for the application, the company selected Japan, where the mobile phone

market is extremely well-developed.

134




GeoVector’s business model is unique. The company is headquartered in the United States but

does 100% of its business in the Japanese markets. Therefore, the company originally had some

difficulty attracting venture capital. To resolve this problem, the company established a Japanese

subsidiary to create an actual target for investment that would ease investors’ worries, spent much

time in developing its intellectual assets and has been patient and determined in persuading investors

to cooperate.



JETRO assisted GeoVector in establishing its Japanese subsidiary (consultation for business

registration, introduction of business registration, accounting and interpreting services, provision of

information on possible office sites, research on competing companies, temporarily loan of office

space, assistance in establishing a bank account).


Persistent persuasion of venture capitalists allowed the company to access funds from investors

who understood the project. Establishing a corporation in Japan was also important. But the most

important factor was gaining personnel who fully understood Japanese culture and business and had

a wealth of connections as the manager for business development in Japan and obtaining support

from JETRO in handling our business development.


The majority of mobile phones on the market access the Internet through browsers or applets.

Many mobile phone manufacturers are developing various technologies that will enable the handsets

to use location-based information. GeoVector’s technology is a new supplementary technology that

will enable the effective leverage of existing functions.

Currently, CDMA terminals are on sale which can make use of direction and location-based

information. The company expects that the number of these phones will increase, and during 2006

W-CDMA phones will also become able to access location-based information. Sales trends for

mobile phones that can use GeoVector’s technology closely resembles the sales trends observed

when camera-equipped mobile phones were introduced onto the market. It is therefore likely that

GeoVector’s technology will bring a new revolution to the global mobile business in the future.

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The company is also considering future entry into the Korean market.

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Country: Vietnam - Institution

Organization Agency for SME development-ASMED

Organization format Government organization (attached to the Ministry of Planning and

Investment)

Scale


URL None

* Summary

-November 2001: The Vietnamese government issues governmental ordinance No. 90 which covers

SME support. It is the first ordinance related to SMEs.

-End of 2002: Based on governmental ordinance No. 90, a Corporate Bureau is established under the

Ministry of Planning and Investment.

July 2003: ASMED established. ASMED is a very young agency in the field of promotional

activities for SMEs.

* Principal roles

- Monitoring the reform of government held corporations

- Providing guidance for regional administrations regarding the administration of business

registration.

- Collecting information and building a database on business registration throughout Vietnam.

- Establishing policies for the promotion of SME development.




etc.)).

ASMED performs the following three main roles in promoting SME development:

(1) Creating beneficial business environments for SMEs. However, ASMED is not the only

organization responsible for SME development. Numerous other domestic and international

organizations are conducting similar activities.

(2) Establishing financial policies for SMEs. ASMED’s activities always remain within the scope of

participation in financial programs for SMEs implemented by the Ministry of Planning and

Investment in conjunction with other ministries including the Ministry of Finance.

(3) Improving SME’s capabilities. These activities are carried out through various educational

programs and through governmental programs for SME development. The budget for these

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development programs is $5 million. This amount is not all sufficient for supporting personnel

development at SME's. There are numerous other sources of financing for SMEs including the

budgets of regional government plans and corporate unions funds.

ASMED’s various programs provide dedicated support for the overall development of domestic

corporations, but at the same time places particular emphasis on strengthening competitiveness in

order to allow Vietnamese SMEs to complete in the international market. (Lack of international

competitiveness is considered a significant weakness of Vietnamese SMEs). Limited only to

commercial promotions, the Vietnamese government proposed a commercial promotion program

targeting only SMEs in 2004. However, the program was not implemented because the Vietnamese

Trade Promotion Agency (VIETRADE) announced an overall plan for the promotion of commerce

which made no distinctions of company size or nature.



ASMED is an associate member of Vietnam's SME Association The association was founded in

January 2003 by the Planning and Investment Minister. Other members include the ministers of the

various ministries and agencies and the representatives of various organizations.

Currently, ASMED is involved in building strategies for the development of SMEs from 2005 to

2010. The completed plans are scheduled to be presented to the Minister and Prime Minister at the

end of 2005. Principal contents of the strategies are concerning governmental reform measures to

address problems related to SMEs. As such, the strategies are considers to be an action program

(action plan) to promote SME development. The strategies also define the principal roles of

ASMED mentioned above.

Since 2004, the government has invested 199.0 billion Dong to provide SME support. These

funds represent the only funding provided from the central government budget. Additional funds

for SME support are provided from the independent financial resources of each regional government.

Further, financial support and other preferential loans are provided by JBIC (two step loans) and the

French organizations AFD, ADB and KFW.

The central government has allowed regional governments to establish credit guarantee funds to

provide support for SMEs. However, as yet, no regional governments have established such funds.

Ironically, this is because governmental and Finance Ministry regulations have been an obstacle and

the capabilities of the regional governments are limited.


ASMED was formed three years ago but has not yet produced a general report on the activities of

SMEs. However according to the Director of ASMED’s International Relations bureau, there are

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only 100,000 SMEs in Vietnam, a small number compared to a population of 80 million. There are

around 2 million family managed entities engaged in a very limited sphere of business, but these

entities do not participate in production activities, and are involved only in management in its strict

sense.

Therefore, the goals of SME development are to encourage young people to start up businesses

and also to encourage investment in the production sector. (The former goal refers to starting up

completely new business entities, and does not include the continuation of family businesses.)

If Vietnamese SMEs are to participate in the international economy, they are likely to face

difficulties caused by increasingly severe competition. However, from a long-term perspective, the

future of SMEs is bright. There are high hopes for the corporate law scheduled for parliamentary

approval at the end of 2005. The law was drawn up after an extensive research period. The

Vietnamese’s positive attitude towards the development of a market economy and participation in

the international economy will also provide support for SME development.

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Country: Vietnam - SME

Company Name Ha Tran joint Stock company (A-Design)

Type of Business furniture / handicraft

No. of Employees 20

Overseas Network

URL


Producing and trading Home decoration and handycrafts


We consider this matter

-Vietnam condition

-Ability of management

-Finance condition



so on)

-financing and lack of information about market

-quality control of products


Vietrade support


Now we have fews market such as: Japan, America, French but not stable


We try to find the partner to develop. We belierve in good future.

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