| Activation of Rural Enterprises by Establishing Business Systems | |||
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| Author | Kim, Kwangsun | ||
| Views | 87491 | Publication Date | 2019.02.26 |
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Background & Purpose of Research This study started with an idea that the rural industries should be approached and boosted from the perspective of economic policies rather than social ones, which can be achieved by facilitating rural enterprises that are key players in the industries. In order to come up with plans to revitalize rural enterprises, the first thing to do was to look into the current condition and characteristics of rural enterprises and their demand for relevant policies. Due to the lack of research and analysis of rural enterprises in previous studies, this study formed a new framework for the research and analysis of such enterprises by introducing a business system approach. A business system indicates a collection of all integrated and coordinated activities for development, production and shipment of products of a company. Such a system is comprised of all key sectors of a company, ranging from technology to product design, manufacturing, marketing, logistics and service. With an approach from the perspective of a business system, we can conduct research and analysis of the current state and characteristics of all major sectors in the value chain of a company as well as those of the environment for competition and cooperation as factors of the industrial environment of a company that affect its value chain. In this way, the approach helps us identify the present condition and issues of a company regarding its competitiveness and design strategies to strengthen the competitiveness of a company. This study is aimed to analyze the characteristics of the business systems of rural enterprises and desirable ways to create the systems by employing the business system approach, and propose the direction and challenges for policies to foster and boost rural enterprises. Method of Research The first method of the study was to review a wide range of materials, including previous research reports, papers, documents of the central and local governments, laws and regulations, news articles, and online data. Based on them, we examined the contents of previous studies and relevant policies and analyzed the limitations of the key aspects and points of the current support policies for rural enterprises. We also utilized several materials, including statistical data, to check the current state and basic characteristics of target rural areas analyzed in case studies. Second, the research involved interviews and surveys of rural enterprises in three target rural areas. Both interviews and surveys were carried out with the presidents of rural enterprises. We conducted interviews with a total of ten enterprises: three in Mungyeong-si, four in Hadong-gun, and three in Geumsan-gun. In terms of surveys, we first attempted to survey 602 enterprises by collecting contact information with assistance from local governments in each target area. Due to some limitations in the survey, however, we received answers from 30 enterprises in each area. With the survey result from a total of 90 enterprises, we could analyze the current condition and issues of the business systems of rural enterprises and their demands for policies. Third, we commissioned experts to prepare reports for the research and analysis of cases in Japan and China. The commissioned reports consist of the concept and scope of the rural industries and rural enterprises in each country, key contents of government support policies for such industries and enterprises, and the current state of business management and systems of rural enterprises. Fourth, we had a field consultation meeting and an expert consultation meeting to collect various opinions related to this study. In the field consultation meeting, we identified difficulties that rural enterprises may struggle with and their demand for policies. In the expert consultation meeting, experts provided their opinions on the overall logical structure and methodology of the study and future policy directions, which have been applied to the study. Research Result and Implications As we undertook the study by these various methods, this report proposes five major directions for policies to facilitate rural enterprises and related challenges. The first policy direction is to lay the institutional groundwork for fostering rural enterprises. To this end, it is important to define the accurate concept and scope of rural enterprises by revising the Act on Fostering and Supporting Rural Convergence Industry, and establish a master plan and an action plan for fostering and supporting the rural convergence industry along with detailed plans to facilitate and assist rural enterprises. The second policy direction is to provide customized support to each sector that constitutes the business system. In addition, different types of demands for policy support should be met in each stage of the growth of rural enterprises, such as the early stage of startups, the growing stage, the maturing stage, and the rebounding stage. The third policy direction is to reinforce the connection between rural enterprises and other local players and set a system for compensation. It is necessary to establish a raw material production base with the participation of farmers, rural enterprises and local governments and a trilateral system for their cooperation and coordination. With this system, rural enterprises can secure the foundation for the stable supply of safe and quality raw materials for their business, while farmers can have a customer base and increase their income by signing raw material supply contracts, which forms a win-win system. The fourth policy direction is to organize a local cooperative system between rural enterprises, which can be accomplished by opening and expanding rural support centers for small-sized businesses as part of convergence policy projects jointly conducted by the Ministry of Agriculture, Food and Rural Affairs and the Ministry of SMEs and Startups. Local governments can also collect and analyze information regarding the demands of rural enterprises for cooperation and related difficulties, and expected effects and benefits of the cooperative system between these enterprises. Based on such efforts, local governments should play a role as a proper mediator in establishing and operating the cooperative system between rural enterprises. The last policy direction is to expand the business system of rural enterprises by culturalizing rural industries. Culturalization of industry is a key strategy in strengthening the competitiveness of an industry or a company. As part of the strategy, it is crucial to create a raw material production complex as mentioned above and develop it as part of landscape and cultural resources, thereby expanding the business system of rural enterprises to other sectors such as hands-on experiences, tour programs and education courses and creating new added value for rural enterprises. Researchers: Kim Kwangsun, Heo Joonyung, You Eunyoung Research period: 2018. 1. ~ 2018. 10. E-mail address: yeskskim@krei.re.kr |
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