The government and the business community agreed to promote a campaign to boost productivity of small and medium-sized suppliers for sustainable growth, officials said on Thursday.

The agreement was reached at a meeting between Industry Minister Yoon Sang-jick and leaders of the nation’s five business associations.

“The initiative, dubbed the ‘industry innovation movement 3.0’ and aimed at raising the capability of SME suppliers to seek innovation, will be launched in June,’’ Minister Yoon told the participants. They included Huh Chang-soo, chairman of the Federation of Korean Industries; Han Duck-soo, chairman of the Korea International Trade Association; and Sohn Kyung-shik, chairman of the Korea Chamber of Commerce and Industry.

“SMEs working with big businesses have shown productivity improvement, but their smaller suppliers have room for further improvement. The 3.0 movement will help them to raise their productivity and to seek innovation,” Yoon said.

As for an action plan to drive the industry innovation 3.0 movement, the ministry will set up a task force under the KCCI in June and help SME suppliers launch an initiative to raise their productivity. The ministry will finance the project using a mutual growth fund attracted by conglomerates.

The movement to raise the productivity of SME suppliers came in a bid to overcome the fallout of the weak yen on local SMEs.

“To cope with difficulties from the external business environment, like the continued fall in value of the yen, SMEs and their suppliers have to bring innovation in productivity improvements and to create high-value added products,” Yoon said.

In response to the proposal for the production improvement drive, representatives from five business associations promised close cooperation to spread out the movement to SME suppliers in an effective way.

KCCI chairman Sohn expressed his support for the government’s deregulatory measures announced on Wednesday. He also proposed that the government allow the establishment of foreign-invested hospitals and resort complexes in the Incheon Free Economic Zone.

Sohn and other business leaders also shared the view that any legislation of measures that could undermine corporate competitiveness should be promoted in a cautious manner.

FKI chairman Huh Chang-soo said he hopes that the government and private companies will join hands in overcoming economic difficulties caused by the weak yen.

By Seo Jee-yeon  (jyseo@heraldcorp.com)