Despite the Global Financial Crisis, Revenue Rose 9.9% on Average

Revenue growth of venture firms of Korea has exceeded the conglomerates and SMEs in 2010, said an agency representative for small businesses.

According to the survey of corporate risk,” published by Small and Medium Enterprises Administration yesterday marked the venture capital companies with a revenue growth of 9.9 percent in 2010.

This is above the conglomerates’ 0.7 percent growth rate, and the rate of SMEs, whose revenue grew by 4.7 percent that year.

Venture companies also outperformed in terms of the ratio of operating profits to net sales. By marking an average operating profit of roughly 400 million won ($347,600) out of revenues of 6.45 billion won per firm, venture firms as a whole logged a ratio of 6.2 percent in 2010 – as opposed to SMEs, which reported an average of 4.5 percent, and conglomerates’ 5.8 percent.

The SMBA attributed the performance of venture companies during the global financial crisis to aggressive investments in facilities as well as research and development.

Even in 2010’s deteriorating business environment, venture companies were found to have increased total investment from the previous year by 3 percent to 530 million won.

Investment into new facilities accounted for 240 million won, while R&D accounted for about 220 million won.

More than 40 percent of venture companies chose to go it alone and establish overseas units in foreign markets, avoiding partnerships with local firms.

Venture companies also served as a boon for job creation, with an average increase of 1.4 jobs in companies with an average workforce of 27 employees in 2010 – 40 percent more than the stagnant job creation rate of SMEs. Venture firms plan to create an average of 3.7 more jobs in 2011.

The report said venture firms had several difficulties, including a shortage of talent and problems breaching foreign markets.

The SMBA plans to focus support on venture companies next year.

“We want to support companies in joint fill the vacancy, and entering overseas markets. [We are] looking at the enlargement of this year, programs such as the common job interview,” said Kim Joo-sik, an official of SMBA.

The study included 2,050 ventures with a total gross electrical 121 trillion in 2010.