The purpose of this study is to examine the process of accumulating competences and competitiveness by family companies, and discuss the importance of successful succession of a family business. The core competence accumulation process and competitiveness sources of SL, which is based on successful succession of the family business for three generations, was examined based on the 4C (Continuity, Community, Connection, Command) model of Miller and Le Breton-Miller (2005), which explains the competitive superiority of family companies. Secondary data on the growth process of SL, a domestic automobile parts company, was analyzed and their strategic implications were examined in detail through an in-depth interview with the CEO.
The 4C factors, which are antecedent variables of a successful family business, played an important role on the growth process of SL. The continuity factor existed through continuous research and development that focuses on and invests in improving technology quality such as mold production, lamp production, sash production, and design automation. 2 to 3 percent of the sales amount each year was spent on research and development, regardless of the condition of the economy. As a result, the intellectual property of the company reached 1,108 items (583 applications, 440 registered properties, 47 in review, 38 trademarks) by 2006. From a long-term perspective, the company is improving their technical power to an international standard through technical investments. The continuity of investments in research and development is apparent through three generations, and it can be said that this reflects the characteristics of family business management that shares a goal, and confirms and develops the core capacities of the company.
The factor of community started with the “people first” business management philosophy of the late president, Hae-joon Lee. Then, it expanded to “human respect” during the president Choong-kon Lee's generation, and to “ethical management” for the CEO Sung-yup Lee's generation. The sense of community was revealed to be in the form of a community corporate culture based on a good welfare system for employees and community awareness. Diverse benefits including a housing support system, housing fund support system, children's education fee support system, scholarship system, and company clubs support system were used to make people feel like “the company and I are one” and work with a sense of ownership. The fact that there has not been one conflict between labor and management since 1968, when the labor was first established, is especially a noteworthy point.
The business management based on “people first” stresses the responsibility and roles of employees and reflects the belief that a workplace should not simply be a place to make a living, but a part of life where you can cultivate character and fulfill your role as a member of society.
The connection factor appears as continuous partnerships and networks with domestic and international parts suppliers and technologically advanced companies. The late honorary chairman Hae-joon Lee maintained partnerships and networks with Hyundai Motor Company and Daewoo Motors. Then, chairman Choong-kon Lee expanded the network to include KIA and Ssangyong Motors and maintained long-term relationships with domestic automobile makers. In addition, the company is maintaining cooperative relations with the Japanese company Stanley and German company Hella, and has started dealing with the U.S. company GM, too. CEO Sung-yup Lee's generation improved the company's relationship with GM and made the achievement of receiving the QSTP Award (an award GM gives to ed skilled companies out of all the parts companies in the world) from GM for 14 consecutive years (1997~2010), solidifying its position as a skilled partner of GM. SL is also advancing into China through collaborations with the local branch to extract new cooperative relations. The value of “trust” is the motivation that helped SL maintain and strengthen relationships and networks. This value started with the founder of the company and was handed down to chairman Choon-kon Lee and CEO Sung-yup Lee, and worked as a core factor to strengthen external cooperative relationships.
The factor of command is apparent from the decisions of business managers who take on a challenge, structural management that includes an endless will for innovation, and leadership. When the late honorary chairman Hae-joon Lee could not cultivate a road for the automobile parts industry because of smuggled goods, he recognized the importance of the automobile parts industry and folded his bicycle parts business, which was number one in the market at the time, without hesitation thanks to his owner-focused independent and bold decision-making skills. In the mid-1990s, when most automobile production companies experienced difficulties because of the economic crisis where Korea was dependent on the IMF, and the aftershocks of restructuring affected automobile parts manufacturing companies, chairman Choong-kon Lee considered the crisis an opportunity and acquired and merged with Seogu Industry (currently known as SL Litech), Oriental Construction and Poongi Building (currently known as SL Seo Bong Co., Ltd. Shiheung factory), creating a turning point to develop further after the crisis. CEO Sung-yup Lee pursues continuous innovation including a corporate culture that places importance on learning and admitting mistakes, change of the structural system to a project based system, and a human resources system that focuses on human resources management, and is emphasizing corporate changes according to the situation of the times.
An examination of the SL core competence accumulation process based on the 4C model shows that it is establishing positive relationships and continuity based on connection and trust, leading to a cooperation system based on the value of trust. It also establishes a positive relationship with command focusing on a community structure culture, which leads to structure capacity based on community culture. The factors of connection and community were found to be especially strong at SL. The factor of connection was a core growth motivation, influenced by the key values of family. SL reveals its growth motivation to be “unification of all employees,” shares the goals and visions of family with its employees, and offers a variety of different benefits. The active will of employees to participate in this community is seen to be the background behind big accomplishments such as innovations in the field, which are still being pursued.
Successful succession of the family company and family business management are strengths that lie in the center of the motivation that allowed SL to continue to grow for three generations, starting with the founder, the late honorary chairman Hae-joon Lee, who provided a foundation of growth with values of trust and people first, moving on to the second generation chairman Choong-kon Lee, who accomplished a rapid development of the company based on technological developments and respect for people, and finally through to the third generation CEO Sung-yup Lee, who is making efforts for globalization and innovation based on ethical management and change. This shows that the values of trust set by the founder have continued on for a long time, through his son, chairman Choong-kon Lee, and grandson, CEO Sung-yup Lee. Chairman Lee, CEO Lee and utive director Lee Seung-hoon are learning corporate culture and management know-how through a great will to participate and actual participation in management. SL was able to gain competitiveness and continuously reach excellent management performance through cooperation based on the value of trust and structural management that focuses on community culture.
As a result of analyzing the company through the 4C model and conducting in-depth interviews with management, it can be said that the values, vision, know-how and experience the founder shared with his family largely contributed to continuous development of core competence with a long-term goal. This in turn had a positive effect on establishment of a corporate community based on trust. By inducing loyalty, participation, and focus on employees in the organizational structure with something more than just financial incentives, the core values of the company are relayed through generations and play an important role in maintaining the community, and also emotionally motivating members of the community. Another point is that the successor who effectively received the social capital of trust as a value, strengthened and continued to develop the external network based on the family values. The value of “trust” started by the founder played a key role in strengthening external cooperative relations as it was succeeded through generations. This had a positive effect on connection based on the value of trust, and especially decisively contributed to maintaining close relations of cooperation in the external network and long-term cooperative relationships. SL was able to focus the possession and domination structure through successful succession of the family business, and make independent bold decisions through internal harmony of the family, without pressure from people involved externally.
The results above lead to the following points of discussion regarding corporate management. From a business management perspective, first, a family company needs to establish an external network based on a unique community culture and trust to work on establishing competitiveness. Second, there is a need to reflect the fact that a community-like structural culture and external cooperative relations from a mid- to long-term perspective have an important effect on maintenance of corporate continuity, even for companies that are not family businesses, on business management. Third, there is a need to focus on the fact that a structural management method that uses values such as community help secure continuity of a company. From a policy perspective, since succession of a family business can be not succession of wealth but succession of accumulated technological core competence and good management philosophy and know-how, it is important for improving national competitiveness, to maintain corporate competitiveness, and transfer the competitiveness between generations. Therefore, there is a need for appropriate policies that support the successful transgenerational succession of family businesses.

Business incubator (BI) is recognized as an efficient mechanism to promote new venture creation, technology commercialization and job creation. To become successful, tenant firms of BIs should have attractive business opportunities and required capabilities. This study focuses on the small and medium enterprises (SMEs) supported by the government's business incubation project, and deals with technology development and commercialization processes of incubated SMEs those own ideas for new technology and product development. The purpose of this study is to analyze SMEs' capabilities and difficulties in technology commercialization and to propose government policies to effectively promote SMEs' commercialization.
Based on previous literatures, this study developed a research framework. Data were collected from 89 SMEs, located or to be located in business incubators and financially supported by the government for the commercialization of new technologies. The questionnaire used in this study contains several items such as i) general company information (industry, location, CEO's age and education, and years of business operation), ii) SME's technology development capabilities (R&D capability, technology accumulation capability, and technology innovation system), iii) SME's technology commercialization capabilities (product commercialization capability, process/production capability, and marketing capability), iv) difficult business processes or areas faced during the technology commercialization process (company formation procedure, technology development and management, business planning, fund raising and finance, technology marketing, and organization management), and v) recognized importance of each business activity or capability in technology commercialization.
Empirical results obtained from statistical analyses were summarized as follows. First, SMEs showed higher technology development capability than technology commercialization capability. Especially, R&D and technology accumulation capabilities were very high compared to product commercialization, process technology production, and marketing capabilities. Therefore government support to strengthen technology commercialization capabilities should be highlighted.
Second, companies with an older CEO (40 years old and more) showed higher technology accumulation capability compared to those with a younger CEO. Firms' commercialization capabilities were not significantly different depending on the CEO's education level.
Third, years of business operation of incubated SMEs did not affect firms' technology development and commercialization capabilities, although younger firms showed slightly higher capabilities in technology development compared to older firms.
Fourth, SMEs pointed “fund raising and finance” as the most difficult business area and bottleneck in technology commercialization. “Technology marketing” and “organization management” were also very lacking areas in the process of commercialization. SMEs replied that these three areas are main bottlenecks and cannot be overcome without strong support from outside (including the government).
Fifth, technology commercialization requires the integrated efforts of several business activities such as innovation, business and technology planning, marketing, financing and organization management. In this study, commercialization-related activities or capabilities were classified into eight categories, such as i) technology development and management, ii) strategic technology planning, iii) R&D project management, iv) core technology development, v) preparing a business plan, vi) financing, vii) marketing, and viii) organization management. The survey result shows that SMEs recognize “technology development and management” (such as corporate technology planning, technology commercialization, and core technology management) as the most important capability for successful commercialization. Furthermore, financial requirement analysis and investment planning, strategy formulation, R&D project planning, and business planning were also appeared as important activities and capabilities for commercialization.
Based on the empirical study and findings, this study suggests following policy recommendations. First of all, financing was the key obstacle in technology commercialization. Therefore, securing several funding sources should be the priority policy measure. In addition to the government's financial supports, the private sector should take more active roles in early stage financing for SMEs through angels and venture capital investments. Government should make efforts for deregulation in the financial sector
Second, the lack of planning and marketing capabilities can be ascribed to poor manpower. Government should support manpower training and recruiting through various training programs and subsidies for new hires. Long-term human resource development (HRD) planning should reflect the changing job market and emerging demands for new talents.
Third, the roles of BIs should be strengthened from rent businesses (providing spaces) to integrated service providers. BIs should serve as technology commercialization platforms and make active networks with outside specialists. Especially, BI managers should have pivotal roles in technology commercialization and new venture growth and more incentives should be given to the specialists or businessmen with real business experiences to become BI managers.
Fourth, this study showed that lacks in management capabilities (rather than technology capabilities) were more critical bottleneck in commercialization. Therefore utive management programs for small business CEOs should be promoted. In addition, undergraduate engineering students should have more chances to study management as recommended courses.
Finally, integrated and flexible support mechanism should be devised to actively promote technology commercialization, from start-up and business planning to financing and marketing. Cooperation among several policy-implementing agencies is also needed.
This study analyzes limited samples of SMEs and the finding cannot be necessarily generalized into different situations. With the environmental change from catch-up imitators to front runners, however, innovative SMEs in Korea really need planning and management capabilities for the prosperous future, and this study signals the importance of management knowledge, skills, and capabilities of small business CEOs.

Small and Medium Enterprises (hereafter called “SMEs”) in Korea occupy a high ratio in the national economy and play an important role economically and socially. This is not something that applies to our country only, but it is similar to developed counties.
SMEs play an important role in industrial production in particular, and economic growth in general in less developed, developing, and transitional economies worldwide. They have generally provided the bulk of entrepreneurs and employment in these economies, and the necessary foundations for sustained economic growth and rising incomes. So in most counties, the role and importance of SMEs as contributors to the national economy and community development, main agents of technical innovation, and job creators in the era of so-called jobless growth is being emphasized.
Also policies have been generated across economies to further develop and strengthen the SME sector in developed counties. The SME policies and programs are in many quarters and vary according to country experiences and necessity, and generally address improvement of exports, market development, furthering the use of skill and credit access.
Thus, this study is intended to present the desirable SME policy directions that could positively cope with the economic environment change by comparing the SME policy trends of developed countries. Looking at the common change in the SME policy in surveyed countries, different policy operations had been formed in the past such as unfair business connections between large and SMEs, application of market economy, etc. However, in recent years, these countries are magnifying the importance of SMEs, by positioning the SME policy at the heart of economy policies.
According to the change in the policy of SME in developed counties such as Japan, the amendment of ｢SME Basic Law｣ in 1999, by diverting the SME policy ideas, goals and means, reestablished the direction and ideal conception from the past’s ‘protection and promotion' to present’s ‘promotion and competition' and adopted ‘Promotion of SMEs' as an alternative to overcome the prolonged economic recession.
In case of the US, based on the open competition private enterprise, open competition and guarantee of equitable economy were assured. Through the ｢SME Agenda｣, the President announced that SMEs are the heart of the US economy and encouraged federal offices to improve the conditions of growth and foundation of the SME by relieving the tax burden and ameliorating business conditions.
EU and main member countries also recognized the importance of SMEs by announcing 'Lisbon Agenda' in 2000, enacted the ｢Small Business Act for Europe｣ by targeting the continued growth and competitiveness of SME under the principle of 'Think Small First' in 2008, and created the vision of “Let's make the highest environmental class for SMEs all over the world.”
As seen above, developed countries have recently emphasized the role of SMEs and tried to establish SME policy to cope with the change in the economic environment. These change provide policy implications to the SME policies of Korea with which are as follows :
First, the SME is the heart of overcoming of the global economic crisis. In the case of U.S., since the launch of the Obama administration, they have been endeavoring to overcome the ongoing financial crisis and are looking for core solutions in SMEs to overcome the crisis.
Second, for rationalization of the policy scope that is targeted at SMEs, the capital of SMEs that has relatively wide range of policies need to be narrowed so that appropriate size enterprises can foster themselves. Also Small and Micro Enterprises should have policies to secure the social safety-net by expanding the number of the employment. Through these means, foster SMEs as an independent agents on one hand, and improve government finance and fairness of the policy through promoting Small and Micro Enterprises on the other hand.
Third, the role of SMEs is the source of competitive reinforcement for relieving chronic unemployment and social integration. The EU is making an effort to improve the environment for the competitiveness and vigorous business activity by overcoming the continuous unemployment and social integration of the EU system.
Fourth, SMEs play a major role in the local economy and in establishment of new businesses. In France, the role of SMEs is expanding as the core subject of the promotion of the country's territory maintenance and local traditional industries. In addition, the UK recognizes SMEs as the driving force of starting new businesses, and Germany recognizes them as the subject of innovation and is making effort to support the policy according to their needs. As mentioned above, all the surveyed countries endeavor to use SMEs as key solutions to the social and economic problems.
Therefore, it is time for our country to realize SMEs competitive strength through redefining the ideology, scope, principle agent, measure, etc. of the SME policies reflecting in global change.
To realize this, first a redefining of policy ideology of the SME is required. The ideology of policy should be switched from ‘Protection and Promotion’ oriented in the past to ‘Promotion and Competition’ oriented which can adapt by themselves to the changing circumstances.
Second, for rationalization of the policy scope that is targeted at SMEs, the capital of SMEs that has relatively wide range of policies need to be narrowed so that appropriate size enterprises can foster themselves. Also Small and Micro Enterprises should have policies to secure the social safety-net by expanding the number of the employment. Through these means, foster SMEs as an independent agents on one hand, and improve government finance and fairness of the policy through promoting Small and Micro Enterprises on the other hand.
Third, strengthening of government organization and policy operation is required at an appropriate level to the SMEs status. This mean, the establishment of a policy system based on SMEs viewpoint is required that is appropriate with the social and economic status of SMEs and the strengthening of the small business administration status is required to overcome policy operation limits as a vice-minister class organization.
Fourth, ion and concentration must be firmed through change in policy measures for positive responsiveness to economic environmental change. Through expansion of government finance and strengthening the soft support for SMEs to adapt to the economic environment change, SMEs make sure the competitiveness and viability by themselves. This kind of support policy is prevalent to encourage the growth and development of SMEs around the world.
We need to improve each of SME policy and enhance research and investigation, etc., as well as above mentioned. Best of all, policy-makers and SMEs involved, all of the people should be required to the mind of love and recognition of the importance for SMEs in order to realize the SME-oriented economic policy.
And such efforts, if we keep it, is a way to guarantee continued growth and we will have a driving force national economy growth.

Early start-up SMEs play a pivotal role in job creation/retention, economic development, sustainable growth, and enlargement of the tax base as well as elevation of entrepreneurship in the future Korean economy where issues about soaring youth unemployment, low domestic demand levels, jobless growth and recent global fiscal crisis prevail. The current status of SMEs accounts for 99% of all businesses and 88% of all employees.
Generally speaking, start-up companies are not easy to keep the stage of growth consistently due to the shortage of management resources (e.g. external financing, human resources, marketing, etc.), especially, a severe lack of operating funds for R&D, production, and marketing promotion. In the case of SMEs, it is very difficult to get money from commercial banks because of their collateral shortages, and asymmetric information between banks and start-up SMEs. As previously described SMEs' potential contribution in Korean economy and their difficulties in the business environment, there are a lot of rational reasons for supporting them. The Korean government has made an effort to assist SME start-ups by using a reduction in income tax, provision of loan guarantees, supplies of government funds, etc. for 20 years. Nonetheless, the survival rate of start-up SMEs is very low as shown by Jeon (2008) reporting a 5 year survival rate of less than 50%. This means that there is a necessity to make policies to enhance the survival rate.
So this paper elucidates that a cost reduction in 4 social insurances will deal with current financial constraints early stage SMEs face and suggests appropriate rationales along with efficient measures in order to foster hidden champions to global star SMEs as the locomotive of a globalized economy for maximizing efficiency and job opportunities.
The purpose of this research is to analyze the tough going concerns for early start-up SMEs and suggests the reduction of the social insurance costs within the scope of beneficiary pay principle. For this purpose, the paper investigates the survival rates, financial performances for early established SMEs and the effective tax rate with a coefficient variation from 2000 to 2008. The data were extracted from the Korean Investors Service (KIS) data base.
The major differences between this study and previous literatures are represented as follows : First, we use the concept of individual based business establishments and corporate body based start-ups respectively. We define the former as the date-of-start-up, and the latter as the date-of-incorporation.
This is very important for studying early start-up SMEs because of the conceptual difference between them. When the individually established business is entitled as the form of corporate body, there is no conceptual difference between the date-of-start-up and the date-of-incorporation. While there is a conceptual difference when any firm starting as an individual based business is changed into corporate body later. Therefore, unlike the previous studies, our paper applied this notion. Second, for the first time we examine the extent to which the social insurance costs burden the early set-up SMEs. This analysis is important because the economic burdens caused by insurance costs have a negative impact on financial performances as well as the survival rate of early stage SMEs.
Our results are as follow : First, the 5 year survival rate of early start-ups are 59.5% (based on date-of -start-up) or 30.3% (based on date-of-incorporation) respectively. This implies that new businesses have difficult to maintain their own business during the first 5 years.
Second, the burden of 4 social insurances costs is unbearable comparing to operating profit, sales, and assets. Third, early start-ups have a higher effective tax rate (ETR) and its coefficient variation (CV) of 4 social insurances harming the survival rate of new businesses. In addition, the non-manufacturing industry has higher ETR based on date-of-start-up (99.09%) and date-of-incorporation (101.41%) comparing to that of date-of-start-up (47.90%) and date-of-incorporation (31.71%) of the manufacturing industry respectively. Furthermore, the non-manufacturing industry has higher CV (24.90) comparing to that (15.33) of manufacturing industry based on date-of-incorporation even though the government channels most of their assistance into the manufacturing industry. Fourth, the survival rate of date-of-incorporation is less than that of date-of-start-up meaning that SMBA (Small and Medium Business Administration) should reconsider the standards of existent SME assistant policy related to early start-ups.
According to the results of research, early start-ups have difficulty to grow to a stable level and we proved the fact by analyzing the survival rate, financial performance, horizontal equity of effective tax rate, and CV (Coefficient Variation). Until now, our government including SMBA, has implemented assistant projects such as financial aid, tax aid, etc. for SMEs for a long time. Nonetheless, in reality, early start-ups are struggling to pay 4 social insurances considering their payability, industry category, and age of firm. In order to boost the growth of SMEs by overcoming these difficulties, one of the solutions is cutting or delaying 4 social insurances during early period when the cost burden of 4 social insurances are too high to survive.
In addition, we suggest 4 policy implications, such as temporary reduction, temporary delay, and policy loan for 4 social insurances so as to increase the survival rate of new businesses for maximizing economic dynamic in knowledge based economy. The first option is a temporary cost reduction of 4 social insurances which is the most preferable and directly effective to the early businesses by decreasing the fixed cost of management to enable more businesses to reach the break-even point easily, but the benefit of this policy may belong to business or business owner at the cost of 4 social insurance companies, government, and employees of an insurant. To avoid the intrinsic moral hazard problem, we have to check the related credit level or previous firm history before providing this assistance. Second, temporary delay implementation of 4 social insurances does not hurt benefit principle in the end comparing to the temporary reduction. The burden of this policy results from the interest loss for the delay period and unpaid insurance premium with its interest by the failed businesses during the delayed period. The total cost of this policy does not exceed that of temporary reduction case. Third, loans to start-ups for 4 social insurances is appropriate for the benefit principle, market economy system, and aforementioned moral hazard problem. The strong point is that this loan only helps the marginal firms that have difficulty in paying 4 social insurance expenses for the short term. Fourth, when considering government budget constraint and economic efficiency, this measure to reduce the burden of 4 social insurance costs will be pushed forward for the start-up SMEs which create job opportunities and provide competitive value-added service or industry.
Moreover, to establish optimal policy for 4 social insurances, the government might benchmark the previous policies adopted in Germany, Japan, China, and the Korean special law on employment stability. The social insurance burden could be reduced on condition that 4 social insurance providers are in a financially good condition as Germany and Japan do. Other examples from Korea and China are that the burden could be flexibly adjusted to deal with existing macroeconomic stagnation during the financial crisis era at the cost of domestic fiscal deficit.

Many countries are aware of the importance of SMEs (Small-Medium Enterprises) competency in terms of their long-term competitiveness. The government has been directly or indirectly supporting their growth, which is reflected through demands from the industrial level, technologic level and regional level. In order to foster the more strong SMEs, many countries deploy various political efforts. Especially, enhancing the competitiveness of SMEs has been recognized as a driving force in the national economy and industrial growth. The policy for SMEs under the process of globalization focuses on enhancing their competitiveness. This policy must support ways to improve competency of the SMEs in a fast-paced environment. The Korean government has also been deploying various support policies for SMEs for many years. On the supply side, the government has been deploying various business policies for SMEs, but SMEs are perceived to lack information about the business support policy. Therefore government authorities should develop a more effective policy approach by responding to their demands.
SMEs support policies are important in terms of job creation and enhancing industrial competitiveness, as well as a promoting a high proportion of SMEs within an industrial structure. A high proportion of medium-sized enterprises in the national economy is essential for progress to a sophisticated industrial structure. At the national level, it is very important for small, medium, and large companies to form an evenly composed, interconnected industrial integration. The growth patterns of companies have important implications for industrial growth. As a small company grows into a medium-size company, a medium-sized company grows into a large company.
The political effort to strengthen the competitiveness of SMEs is required. Business policy should be focused on needs of industrial field rather than the supply side. The business policy must excavate by the multi-dimensional analysis in terms of industry, technology (an initial technical, commercial technology), region (strategic industry, traditional industry) and firm characteristics (stage of growth, firm size, etc.).
According to previous research, the growth factor in the each growth stage is different according to the characteristics of the company, technology innovation strategy, resources, and management factors. The performance of innovative activities will be created through company competency (R&D, sales and marketing). Because these innovative activities will be created by the company resources and corporate culture, they depend on each growth stage. Based on previous research and these research objectives, we set up hypotheses as follows :

Hypothesis 1 : The innovation competency of SMEs will be different by growth stages.

The government has been deploying various business policies for SMEs. But, because the management situation of SMEs is different, their policy demands will be different. SMEs need a different strategy for solving each problem, so the SMEs business policy demands will be different.

Hypothesis 2 : The demand of business policy in each growth stage will be different.

In this study, we have tried to find the policy direction to improve innovation competency in the growth stage of SMEs. We suggested discriminatory approach methods about the business support policy by growth stages. To achieve the objectives of this research, we surveyed and analyzed by statistic methods companies in the Chungnam area.
Based on this research purpose, we surveyed 243 companies in Chungnam area. The target companies for survey participated in this program in order to foster local industry in the Chungnam area. We sent the questionnaires and welcomed any request for help. We received their responses by e-mail or fax. By cooperating with related organizations, we made a list of 280 companies from the target group. Then we gathered the responses from 250 companies. The rate of response was 88.66%. The empirical analysis of growth stages followed the two-step process for grouping and identification of stages and difference between the groups. In the first step we grouped the sample group by variables of ed growth stage. In the second step, we used the analysis of variance (ANOVA) in order to find the difference of innovation competency and the demand of business policy among growth stages.
The main analysis results are as follows. First, by comparing the innovation competencies with growth stages, we found significant differences in relationship assets, corporate culture, and research and development. Secondly, by comparing the demand level for business support policies with growth stages, we found significant differences in research and development, marketing, and exchange of information.
The detailed results by growth stages are as follows: First, in the product development stage after start-up (Stage 1), innovation competency is lower in the R&D sector and asset of relationship. So a support program to improve competency is necessary. In this stage, the level of policy demand about R&D, marketing, and information exchange was higher than in other stages. Second, in the initial production and marketing stage (Stage 2), the innovation competency about corporate culture was lower than other stages. The policy demands about R&D and information exchange was lower than other stages. Third, to ensure a stable market stage (Stage 3), the innovation competency on asset of relationships was higher than other stages. There is no uniqueness of the relative difference between the policy demands. Fourth, in the expansion of market for subsequent product development (Stage 4), the innovation competency in R&D was higher than other stages. The policy demands on marketing and information exchange were higher than other stages. As a result, the corporate resources and capabilities are lacking in the early stages of growth. The support for various types of policies should be pursued.
In the mature stage, SMEs had increased their R&D capabilities and the marketing demand was relatively high. The exchange of information is high in the early and maturity stage. As a result, we were able to identify the differences and improvement elements on innovation competency of SMEs by growth stages. Consequently, we proposed the necessity of differentiating policies by growth stages of SMEs, because there are different business support policy demands by growth stages of SMEs. Based on the results of these studies, we expect to increase the efficiency of business support policy, by finding customized policies with the industry demand.

This study, assuming that different wage negotiations may bring in different levels of employees' pay satisfaction, verified the difference in preferences and satisfaction depending on the way of paying incentives and applied the behavioral economy to the wage negotiation table. In concrete, the purpose of this study is to examine, in the course of wage negotiations, the effects of the framed time condition and the gain/loss condition against an employee on choices and judgments.
The results for the time condition are as follows: For the linear condition assuming a neutral circumstance where there was no time frame, Hypothesis I-1 was established putting the deduction condition on top of the add condition in preference, on the basis of a theoretical background where a ion would be made in terms of loss aversion. But the hypothesis was rejected. With respect to the initial-weighted incentive condition with a near future time frame, Hypothesis II-1, saying that the add condition would be more preferred than the deduction condition was supported. However, regarding the last-weighted incentive condition with a far future time frame, a hypothesis Hypothesis III-1, saying that the deduction condition would be more preferred than the add condition was rejected. However, the ion rate for the deduction condition showed a gradual increase as the early condition, the comparison condition, and the last condition appeared in order (Hypothesis IV was supported).
Looking into the results of the gain/loss context, Hypothesis V-1, saying that the initial-weighted incentive condition would be more preferred than the last-weighted one with respect to the add condition (gain context), was supported. Also supported was Hypothesis VI-1, saying that the last-weighted incentive condition would gain more preferences than the initial-weighted one with respect to the deduction condition (loss context). Hypothesis VII assumed that the ion of the two initial-last weighted conditions may vary according to the employee's actual goal achievement. As a result, the hypothesis received partial support as it turned out to have been significant only in the deduction condition.
Based on these results, the time frame in the wage negotiation table can be interpreted to impose moderate effects on the employee's ion and judgment. Also, the gain/loss context had stronger effects than the time condition did.
Concretely, the gain context in the near future prefers a small but certain gain, therefore preferred is a condition that presents a higher percent of incentive at the low level of goal accomplishment. As for the loss context, employees attempt to avoid a 100% sure loss the most, tend to be more sensitive to even a small loss, and have an optimistic propensity toward the future. In this respect, it turns out that the closer the employee approaches to the maximum goal, the more he/she prefers the condition of cutting down smaller incentives.
As there have been no studies so far that applied the principles of behavioral economics from the perspective of wage management, this study can be exploratory. However, various implications can be obtained. First, it could understand what effects loss aversion has on the employees' negotiations. In particular, the ion rate for the last-weighted incentive condition in the loss condition was 71%, the highest of the ion rates among incentive combinations. The possibility of goal accomplishment and motivation rate for achievement effort also reached the highest level. An enterprise needs to negotiate wages for employees to maximize their performance, so they seem to prefer the last-weighted incentive condition. In this light, if either of the two initial and last weighted incentive conditions is ed from the deduction conditions in order to maximize ion, satisfaction, and motivation level while on the negotiation table, the fairness and the motivation level of the employees favored by a company will be able to rise. This may possibly act as a win-win strategy both for the enterprise and the employees as the individuals can certainly see an increase in fairness for and satisfaction in negotiations.
Second, ions vary by an individual's degree of goal accomplishment. When the level of goal accomplishment is below average in the loss context, the ion rate of initial-weighted incentive condition was 14.2% higher than the last-weighted incentive. When over average, however, the last-weighted incentive condition had the higher figure of 77.3% compared to 22.7% for the initial-weighted.
That is, high-performers exceeding average goals in the organization tend to prefer more risks than those who do not. It should be necessary to present a wage negotiation proposal in consideration with the employees' past goal accomplishment level history.
Third, the study showed what the compensation offering time meant. That is, how the satisfaction to changes in ions and negotiation results vary, according to the compensation in the far future time frame and a certain one in the near future time frame, while the employees are at the negotiation table. The results of this study indicated they generally preferred sure profits at the present time. This is also consistent with the meta-analysis results of Kuhnerger(1999). The analysis pointed out that ing money or personal assets turned out to have less preference for risk than other conditions. Since, it may be assumed that wages are a significant factor that influences basic family life, well-being, and many other parts, the possibility of not taking risk may come automatically. Furthermore, most Korean businesses traditionally make an additional wage payment such as general increase or bonus payment in many cases. Accordingly, the term "deduction payment" may look so salient and influential that it may have brought about some reluctance. This may have occurred due to some of the participants with families who desire to keep a stable source of income. In light of all these factors, subsequent studies on wage negotiations need to fully consider the variables stated.
Finally, it is encouraging to have revealed the fact that the leading theories of behavioral economics have been applied to wage negotiations, and it is of great significance to an individual. Though the theories of behavioral economics are also explained in existing wage management theories, no empirical evidence has been presented under the current circumstances. Findings of this study, therefore, are considered to be helpful for the theoretical aspects in the existing wage management.
In spite of these implications, there are some limitations for generalizing the results of this research First, a researcher arbitrarily established the percentage for the incentive negotiation conditions presented by this study. Though the maximum weight was set at 10 percent for the maximization of independent variable effects, it would have been better to investigate the actual percentage applicable to businesses and reflect it in the study. It is therefore necessary to look into the last-weight percent actually applicable in following studies. If possible, it would be beneficial for businesses to set the percentage by writing concrete functions in a calculable method.
Second, detailed investigations have not been conducted toward the fairness, satisfaction, possibility of goal accomplishment, and will of performance effort. The study allowed the ion of one of two proposed incentive conditions. This ion method, though widely used for research on existing behavioral economics, could have brought in more analysis and explanations, if the Likert scale measures had been conducted in more detail over each condition or the ones chosen by individuals. This method was not completed in consideration of possible restrictions in the generalization of results. This is because the participants are likely to become less attentive to a response or have lower concentration in the later part as the number of items grows. Taking this point into account, the study did not make comparison between the linear conditions that anyone would generally think of as fair and other conditions. Following studies should consider these points and maintain the respondents' attention to access more detailed and various information.
Third, variables of individual differences examined in the study were restrictive. Only demographic variables were mainly adopted for this study but it is necessary to gain further insight into influential variables on an individual's ion during the wage negotiation process. For example, wage negotiations can be influenced by an each individual's trust for the organization or pay satisfaction, so can personality (Big 5), goal orientation, and risk aversion level. Following studies will need to carry out research on variables that can affect decision-making in wage negotiations.
Lastly, ion for the study was based on a scenario instead of an actual situation, so no conclusions cannot be reached whether or not consistent results would come out during actual wage negotiation circumstance. In following studies, it is necessary to observe actual wage negotiations among employees currently working.
If future studies are conducted taking these limitations into consideration, they will be able to present various implications as to how behavioral economics theories can be applied in the wage negotiation process.

Technology-based materials and components firms are important players in the national economy, as these firms provide the competitive nucleus in industries which use their products as inputs. Among small and medium sized firms (SMEs), technology-based materials and components firms have demonstrated strong growth even in the midst of the global economic depression.
Korean firms of this type have become significant players in the global marketplace. However, the common success factors of these firms have not been investigated in a systematic way to date. By identifying the firm characteristics, paths of growth and success factors which have led to the success of firms producing similar products we will be better positioned to frame the most effective government support policy for industry and the needs of SMEs.
To analyze the above objectives, we have adopted the following case study framework: Using background theories of resources and capabilities, and the characteristics of organization and external environments (market and industry), each firm's characteristics are reviewed in the dimensions of organization, control and incentives, networks, market position, and the six forces of the industry as well as each firm’s position in it. Furthermore, by focusing on firm strategy with regards to technology development, commercialization, growth and performance, we have identified the strategic fits among success factors in the backdrop of the organizational characteristics, industrial forces and cooperation network structures in the value chain.
The strategic foci identified are upgrading, diversification and alliances. The upgrading strategies used by firms are progress, product, functionality, technology, and inter-sectoral product upgrading. The diversification strategies include product and geographic dimemsions. The strategic alliances employed are backward and forward integration as well as network strategies.
This study analyzes the growth strategies of technology-based materials and components firms. From the digital electronics, materials and industrial electronics industries, we ed 19 firms that have been successful in developing technologies and utilizing them in the market. By reviewing the organizational characteristics of the firms (including the CEO’s risk profile), their industrial environments, and their strategies, we have tried to identify and categorize the common factors of their success.
The firms are divided into two technology types: Original technology and application technology. In addition to the corresponding products and the value chain of the firms, their alliance and cooperation types have also been considered in order to recognize the relevant growth strategies. Although this paper explains the success factors in firm growth, the framework is not dynamic which may explain the current leading factor - progress - in the performance of firm growth. The analysis highlights several points which may suggest important strategic fits of technology-driven firms.
The strategic fits are categorized firstly according to their technology type, since these types dictate the most prominent characteristic differences between firms that may thereupon affect the differences in product production and growth strategies. The findings of the study are as follows. First, in the case of original technology firms, if there exist entry barriers and few substitutes in the industry, the firms use low risk upgrading strategies such as improvement of products and technology, rather than high-risk innovative strategies such as inter-sectoral new product development. The incumbent firms do not need to take on risky projects in a secure market. However, when the CEO is a risk taker, the firm tries to expand to foreign markets with big allied firms. In these cases, the firm will take a ‘little’ bold step such as vertical integration in the value chain, related diversification or inter-sectoral product development. Typically, the risk-taking CEO attempts to use external financial resources for such projects, while the risk-averse CEO will choose to use retained earnings inside the firm instead. In a mature market, firms are likely to finance from external sources to balance the risk associated with exploring inter-sectoral product development.
Second, in an alliance strategy, an original technology firm having a good relationship with a customer firm will pursue foreign expansion with an interdependent customer firm through forward alliance, in order to diversity products and/or develop new products inter-sectorally. On the other hand, the application technology firm in cooperation with a customer firm of higher bargaining power will use the customization strategy for their ally abroad with help from the ally.
Third, in the application firm's case, a strategy employing mass production is used to utilize production economies of scale. The economies of scale from mass production will ensure the price competitiveness of the firm in the market. Brand reputation along with low price from mass production in the various marketing channels allows the firm to pursue localization technology upgrading and inter-sectoral product development.
Fourth, localization technology upgrading leads to securing a sustainable technology brand, which in turn makes external financing possible. The vertical alliance, forward as well as backward, also helps with related diversification and inter-sectoral diversification. Vertically-allied firms thus develop a core competency in foreign expansion with the help of the big buyer firm’s power in marketing channels. In the virtuous cycle of mass production comprising strategic alliances with backward and forward firms, and technology/product upgrading and diversification - vertical alliances are the key success factor in the survival and growth of materials and components firms.
Fifth, growth strategies are dependent upon the nature of the CEOs' risk profile. With a risk-taking CEO, outside financing is preferred for innovation and product development, while a risk-averse CEO prefers to use internal funding for less risky projects and for compensating researchers. Original technology firms use vertical integration in the value chain, while application technology firms use vertical alliances.
From the results of this study a few policy recommendations are suggested:
Government support in the form of technology or financing is very important for the survival of technology-driven firms. Also, alliances with big firms are essential in the growth of technology-driven firms. Government policy to promote alliances between big firms and small to medium sized firms is a must to secure sustainable growth of SMEs.
Since technology-driven firms use external research funds for innovative activities such as development of new products, external financing needs to be available to firms with innovative but high-risk projects. The government may support those firms by providing credit guarantees or financial support. However, tight monitoring should accompany generous support for high risk projects to avoid the pitfalls of moral hazard.
Foreign marketing channel access and local information in foreign countries are also valuable assets to the success of technology-driven firms in international expansion. Governments may provide this information and connect firms to foreign marketing channels in expansion markets, enhancing the sustainability of technology-driven firm growth.
The study has the following limitations. By ing successful firms as cases, this study does not cover the initial stage of the firm’s growth. Although the objective of this study is to identify the success factors of the technology-driven firms, the survival of the SMEs in the initial stage is very crucial for the ensuing growth after the survival. The distinctions between original technology firms and application strategies are not quite conspicuous, although there are many different aspects between firms in two technology categories. If we have enough number of firms, more systematic statistical analysis of the success factors that guarantee the high returns of the technology-driven firms.