The stability of the economy and financial world is largely based on the small and medium-size enterprises (SMEs). SMEs employees approximately 90% of the total work force. The approach to predict outcome to why they are struggling without identifying the cause is a concern even to a non-expert.
According to the analysis on the internet, the unstable phenomenon of national economic crisis, financial crisis, decline of financial power and stagnant growth of this century is portrayed as unavoidable phenomenon rather than abnormal.
There are several complicated reasons why SMEs, industry that occupies 90% of total work force, are struggling. Primal reason is apparently because there is no provision or solution to the collapse of economic justice on the web and a paradigm of traps created by large corporations with their unethical activities that political society is abusing and contradicting.
90% of the overall employment is associated with household economy which is also associated with large corporation consumers. The struggle of SMEs led to a fear of new business establishment and lowered financial power of domestic SMEs. The decrease in income of 90% of the workforce led to decline of consumption, which left small businesses to struggle and declined overall demand. In addition, it became a fundamental cause of economic stagnation by slowing the product circulation cycle of large corporations. As a result, the national tax revenue has steadily declined but increased expenditures on welfare for unemployment and low-income class which led to a government budget crisis. This results in a situation where the government is making effort to increase tax revenue which leads to a repetition of this vicious circle.
One noticeable phenomenon among major countries suffering from decline in demand and national crisis is that it is a first world country with advanced internet. The biggest cause of this crisis is deemed to be the contradicting paradigm that started in the beginning of internet era in the early 21st century.
One notable fact is that such phenomenon is now quickly spreading to developing countries along with faster internet connection. Their decline in demand is likely to cause a secondary effect on economic vicious cycle to the exporting countries.
It is time to learn from the history in the early 20th century, right after the Industrial Revolution, when the financial budget was introduced in the industrialized nations. There was a disaster caused by lack of effective demand which ended up maximizing the flaws of capitalism by misdirecting the money which was spent on unnecessary areas.
It is imperative that the government establish a task force analyzing the problems of the internet industry and treating the fundamental cause of this contradiction with valuable national treasury. If no countermeasures are taken trying to solve this fundamental cause, then the repetition of quantitative easing will only have a temporary effect on demand increase which will eventually decline. If no alternative measures are taken, the probability of reoccurrence of this phenomenon cannot be avoided.
The misleading internet paradigms have lasted for over 10 years and are likely to continue in the next decade!
If an action against this misleading internet paradigm is not taken and fundamental alternative measures are not developed, there will be a greater threat to the global economy.
Although this editorial was not written by an economic or financial expert and only contains hypothesis and reasoning instead of accurate data, it is clear that the internet ― the best modern convenience of the 21st century ― has deprived SMEs of their customers by driving many of them to the Internet 411 directories for the past 10 years. Instead of increasing the financial power of SMEs which are driving forces of the national economy, it is misdirecting their customer base to large corporations. For example, a customer calls a local pizza restaurant for delivery, but the caller hears an operator and gets transferred to another pizza restaurant, which causes loss of customer for the other restaurant.
Not long after telephone came out, phone directory assistance such as 411 was essential, but it has now become a secondary tool after electronic assistance became available. Telephone requires entry of phone numbers, whereas in the internet you can search for businesses by name. As a result, customers often conveniently find a business by simply typing its name. Between 2003 and 2004, customers were directly connected to a specific business they were searching for through electronic operators and services. However, for the next 10 years, many inquiries were redirected to another business by blocking the direct connections. This was because there were as many as 25 million inquiries a day looking for businesses on the internet. Stealing 10% of them can create a substantial gain but there were no laws to regulate such unethical activities, allowing for unjustified profits.
Such phenomenon stemmed from computer operating system manufacturer who also supply web browsers. When a person enters a business in the address bar instead of a search engine, it automatically directs customers to the web browser’s supplier, letting the Internet 411 own by their buyers. In addition, these unethical activities persisted with justifications, making the victims unaware of their damages. As a matter of fact, this trap is a worldwide phenomenon in this Internet era of the early 21 century.
If the phone directory service 411 steals the 25 million customers daily nationwide who are looking for businesses, it would devastate the economy; the same logic applies to the internet, which is far more developed than telephone. The internet ? a tool with potential to create jobs and accelerate the knowledge and information industry ? has ended up hurting the SMEs even more due to unethical abuse of large corporations to economically profit through the internet.
In a knowledge and information industry where internet is a main tool, SMEs are the driving force of job creation.
However, they have been spending over 1.3 trillion won every year on the e-businesses to regain its customer base that they have lost from the entrapment of large corporation, in order to keep their business flowing. Within this strange phenomenon, the jobs for young people are diminishing and it is costing the government large amount of national treasury in order to relieve unemployment rate and stimulate the economy.
What's more serious is that many companies are unaware that they are losing customers to the Internet 411. Their effort in business innovation and customer satisfaction is to increase its customer base but they are caught in the traps created by the Internet 411 without realizing their valuable customers have been deprived from them. As long as such economic structure persists, the current economic crisis is likely to accelerate.
In case with Super Supermarkets (SSMs), which is large discount store, they are limited to one commercial district to compete over all the smaller stores in a neighborhood, whereas the internet allows a few large corporations to dominate the entire commercial territory. These large corporations are referred to as IESSM (Internet's Extreme Super Supermarkets). The problem is that the customers are guided to these businesses unknowingly, while SSM customers knowingly visit the stores. Even if customers search for a specific business, they are redirected to IESSM via Internet 411.
The foundation of a national economy is based on SMEs anywhere in the world and their financial power is closely related to job creation and consumption. Their employees account for 90% of the total work force and that support the household economy, which is also associated with real estate economy. Also, this population is consumers of large corporations.
The internet entrapment that is affecting the economy of developed countries is rapidly spreading to developing countries. They are remaining markets for big exporting countries.
If their demand declines as it did in the developed countries, it will inevitably lead to decline of exports, eliminating the last stepping stone for the global economic growth.
Developing countries seem to be the last pillar holding the global economy. In this era of the internet, the solutions to the national economic crisis, financial crisis, threat to competitiveness and stagnant growth can be found through Copernican thinking.
In this Internet era, hopefully the new president will ensure that "Internet Address Resource Supervision Act" will be enforced to protect the customer base of SME. This can act as a role model to overcome the economic crisis of the global economy.
