• Journal of Distribution Science
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• v.8 no.3
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• pp.17-26
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• 2010

Recently concerns have been raised due to the unbalanced supply of crops: the price of crops has been unstable and at one point the price went up so high that the word Agflation(agriculture+ inflation) was coined. Korea, in particular, is a small-sized country and needs to secure the stable supply of crops by investing in the produce importation at a national level. Investment in foreign produce importation is becoming more important as a measure for sufficient supply of crops, limited supply of domestic crops, weakened farming conditions worldwide, as well as recent changes in the use of crops due to the development of bio-fuels, influence of carbon emission on crops, the price increase in crops, and influx of foreign hot money. However, there are many problems with investing in foreign produce importation: lack of support from the government; lack of farming information and technology; difficulty in securing the capital; no immediate pay-off from the investment and insufficient management. Although foreign produce is originally more price-competitive than domestic produce, it loses its competiveness in the process of importation (due to high tariffs) and poor distribution system, which makes it difficult to sell in Korea. Therefore, investment in foreign produce importation is being questioned for feasibility; to make it possible, foreign produce must maintain the price-competitiveness. Especially, harvest of agricultural products depends on natural and geographical conditions of each country and those products have indigenous properties, so distribution system according to import and export of agricultural products should be treated more carefully than that of other industries. Distribution costs are differentiated into each item and include cost of sorting and wrapping, cost of wrapping materials, cost of domestic transport, cost of international transport and cost of clearing customs for import and export. So transporting and storing agricultural products generates considerable costs compared with other products. Also, due to upgrade of dietary life, needs for stability, taste and visible quality toward food including agricultural products are being raised and wrong way of storage causes decomposition of food and loss of freshness, making the storage more difficult than that in room temperature, so storage and transport in distribution of agricultural products needs specialty. In addition, because lack of specialty in distribution and circulation such as storage and wrapping does not solve limit factors in distance, the distribution and circulation has been limited to a form of import and export within short-distant region. Therefore, need for distribution out-sourcing which can satisfy specialty in managing distribution and circulation and it is needed to establish more effective distribution system. However, existing distribution system of agricultural products is exposed to various problems including problems in distribution channel, making distribution and strategy for distribution and those problems are as follows. First, in case of investment in overseas agricultural industry, stable supply of the products is difficult because areas of production are dispersed widely and influenced by outer factors due to including overseas distribution channels. Also, at the aspect of quality, standardization of products is difficult, distribution system is quite complicated and unreasonable due to long distribution channels according to international trade and financial and institutional support is not enough. Especially, there are quite a lot of ineffective factors including multi level distribution process, dramatic gap between production cost and customer's cost, lack of physical distribution facilities and difficulties in storage and transport due to lack of wrapping containers. Besides, because import and export of agricultural products has been manages under the company's own distribution according to transaction contract between manufacturers and exporting company, efficiency is low due to excessive investment in fixed costs and lack of specialty in dealing with agricultural products causes fall of value of products, showing the limit to lose price-competitiveness. Especially, because lack of specialty in distribution and circulation such as storage and wrapping does not solve limit factors in distance, the distribution and circulation has been limited to a form of import and export within short-distant region. Therefore, need for distribution out-sourcing which can satisfy specialty in managing distribution and circulation and it is needed to establish more effective distribution system. Second, among tangible and intangible services which promote the efficiency of the whole distribution, a function building distribution environment which includes distribution information, system for standard and inspection, distribution finance, system for diversification of risks, education and training, distribution administration and tax system is wanted. In general, such a function building distribution environment is difficult to be changed and supplement innovatively because its effect compared with investment does not appear immediately despite of its necessity. Especially, in case of distribution of agricultural products, as a function of collecting and distributing is performed individually through various channels, the importance of distribution information and standardization is getting more focus due to the problem of repetition of work and lack of specialty. Also, efficient management of distribution is quite difficult due to lack of professionals in distribution, so support to professional education is needed. Third, though effort to keep self-sufficiency ratio of staple food, rice is regarded as important at the government level, level of dependency on overseas of others crops is high. Therefore, plan for stable securing food resources aside from staple food is also necessary. Especially, governmental organizations of agricultural products distribution in Korea are production-centered and have unreasonable structure whose function at the aspect of distribution and consumption is quite insufficient. And development of new distribution channels which can deal with changes in distribution environment and they do not achieve actual results of strategy for distribution due to non-positive strategy for price distribution. That is, it implies the possibility that base for supply will become vulnerable because it does not mediate appropriate interests on total distribution channels such as manufacturers, wholesale dealers and vendors by emphasizing consumer protection excessively in the distribution of agricultural products. Therefore, this study examined fundamental concept and actual situation for our investment to overseas agriculture, drew necessities, considerations, problems, etc. of overseas agricultural investment and suggested improvements at the level of distribution for price competitiveness of agricultural products cultivated in overseas under five aspects; government's indirect support, distribution's modernization and distribution information function's strengthening, government's political support for distribution facility, transportation route, load and unloading works' improvement, price competitiveness' securing, professional manpower's cultivation by education and training, etc. Here are some suggestions for foreign produce importation. First, the government should conduct a survey on the current distribution channels and analyze the situation to establish a measure for long-term development plans. By providing each agricultural area with a guideline for planning appropriate production of crops, the government can help farmers be ready for importation, and prevent them from producing same crops all at the same time. Government can sign an MOU with the foreign government and promote the importation so that the development of agricultural resources can be stable and steady. Second, the government can establish a strategy for an effective distribution system by providing farmers and agriculture-related workers with the distribution information such as price, production, demand, market structure and location, feature of each crop, and etc. In order for such distribution system to become feasible, the government needs to reconstruct the current distribution system, designate a public organization for providing distribution information and set the criteria for level of produce quality, trade units, and package units. Third, the government should provide financial support and a policy to seek an efficient distribution channel for foreign produce to be delivered fresh: the government should expand distribution facilities (for selecting, packaging, storing, and processing) and transportation vehicles while modernizing old facilities. There should be another policy to improve the efficiency of unloading, and to lower the cost of distribution. Fourth, it is necessary to enact a new law covering exceptional cases for importing produce in order to maintain the price competitiveness; currently the high tariffs is keeping the imported produce from being distributed domestically. However, the new adjustment should be made carefully within the WTO regulations since it can create a problem from giving preferential tariffs. The government can also simplify the distribution channels in order to reduce the cost in the distribution process. Fifth, the government should educate distributors to raise the efficiency and to modernize the distribution system. It is necessary to develop human resources by educating people regarding the foreign agricultural environment, the produce quality, management skills, and by introducing some successful cases in advanced countries.

• The Journal of Small Business Innovation
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• v.19 no.4
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• pp.19-39
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• 2016

With increasing adoption of smart products and complexity, companies have shifted their strategies from stand alone and competitive strategies to business ecosystem oriented and cooperative strategies. The win-win growth of business refers to corporate efforts undertaken by companies to pursue the healthiness of business between conglomerates and partnering companies such as suppliers for mutual prosperity and a long-term corporate soundness based on their business ecosystem and cooperative strategies. This study is designed to validate a theoretical proposition that the win-win growth strategy of Samsung Electronics and cooperative efforts among companies can create a healthy business ecosystem, based on results of case studies and surveys. In this study, a level of global market access of small and mid-sized companies is adopted as the key achievement index. The foreign market entry is considered as one of vulnerabilities in the ecosystem of small and mid-sized enterprises (SMEs). For SMEs, the global market access based on the research and development (R&D) has become the critical component in the process of transforming them into global small giants. The results of case studies and surveys are analyzed mainly based on a model of a virtuous cycle of Creativity, Opportunity, Productivity, and Proactivity (the COPP model) that features the characteristics of the healthiness of a business ecosystem. In the COPP model, a virtuous circle of profits made by the first three factors and Proactivity, which is the manifestation of entrepreneurship that proactively invests and reacts to the changing business environment of the future, enhances the healthiness of a given business ecosystem. With the application of the COPP model, this study finds major achievements of the win-win growth of Samsung Electronics as follows. First, Opportunity plays a role as a parameter in the relations of Creativity, Productivity, and creating profits. Namely, as companies export more (with more Opportunity), they are more likely to link their R&D efforts to Productivity and profitability. However, companies that do not export tend to fail to link their R&D investment to profitability. Second, this study finds that companies with huge investment on R&D for the future, which is the result of Proactivity, tend to hold a large number of patents (Creativity). And companies with significant numbers of patents tend to be large exporters as well (Opportunity), and companies with a large amount of exports tend to record high profitability (Productivity and profitability), and thus forms the virtuous cycle of the COPP model. In addition, to access global markets for sustainable growth, SMEs need to build and strengthen their competitiveness. This study concludes that companies with a high level of proactivity to invest for the future can create a virtuous circle of Creativity, Opportunity, Productivity, and Proactivity, thereby providing a strategic implication that SMEs should invest time and resources in forming such a virtuous cycle which is a sure way for the SMEs to grow into global small giants.

• Journal of Distribution Research
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• v.17 no.3
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• pp.1-24
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• 2012

Franchises have recently emerged as the most rapidly expanding industry positioned to create a large impact in the domestic economic. The Chinese franchise industry developed rapidly in the period prior and subsequent to WTO accession with more than 50% of new franchises brands emerging since 2000. M&A transactions in the Chinese franchise industry have progressed actively. In the period from 2005-2007, due to the wholesale and retail market opening in accordance with the guidelines laid forth within the MOU by the WTO the Chinese franchise market is now the largest market in the world all despite a short history of only 20 years. The amount of franchise market research on China is disproportional to its current size and development potential. Beginning in the 1990s, market research conducted by the International Franchise Association focused on emerging markets in Eastern Europe and China. While the research dealt with the Chinese investment environment, it insufficiently explained the market region and cultural environment. The purpose of this research is (i) to investigate the determinants of the performance of franchise systems in China and (ii) new contract renewals based on performance factors. This study will complement existing research in terms of the franchisee perspective. This study may also prove of the benefit to the franchise companies entering the Chinese franchise market enabling them to develop an effective strategy. This study shows that support, incentives, and system standardization by franchisor yielded a positive effect on management performance. This is consistent with previous studies by Shin (2000) and Kim (2008) targeting Korean franchises. Therefore, in the Chinese market, the franchisor must focus on support, incentives, and system standardization rather than concentrate only on the recruitment of franchisees in order to improve revenue. Hypotheses regarding franchisor control have been dismissed in existing research, in the opinion of this study, due to their complexity and inability to control the merchant as a one-kind-assessment-standard. Our findings show that the franchisees' financial condition, management ability and entrepreneurial spirit, among franchisee's characteristics, have a positive effect on franchisor's business performance and satisfaction for the franchisee. This is consistent with previous studies on headquarters' management performance of Lussier (1996), Heo and Jang (2008), and franchisees' financial condition, management ability and entrepreneurial spirit effect on franchisor's satisfaction of Weaven and Franzer (2007), Kim (2009), Han (2009), and Yoon etc. (2008). Therefore, when permitting a franchisee, financial condition, management ability, entrepreneurship of the franchisee should be carefully considered. Among relational factors between franchisor and franchisee, trust has the positive influence on the management performance of the franchisor while conflict has a negative effect. However, trust, commitment and conflict factors have been shown not to have any impact on the satisfaction of the franchise headquarters. This result is consistent with the previous studies of Pavlou and Ba (2000), Morrison (1999), Weaven and Frazer (2007), Kim and Park (1994), Sohn (2007) which show that trust between franchisor and the franchisees have a positive effect and that conflict has a negative impact on franchisor's management performance. Other factors causing a negative effective on the franchisor's management performance are a rapid environmental changes and uncertainty in the business. This is consistent with Campbell et al (2007), Kim and Kim (2009), Han and Baek (2008). Finally, the high management performance and satisfaction of the franchise headquarters has a positive effect on the intention of franchise renewal. In the case of large markets such as China, the franchisor's strategy and the role is very important. In this study, we also investigated the characteristics of franchisor and franchisee, relationship, and environmental uncertainty affecting on the management performance and satisfaction of franchisor. Recently, Korean franchises are attempting to enter foreign markets through the rise in popularity of Korean culture and entertainment commonly referred to as the Korean wave. This study provides recommendations for Korean franchises intending on entering the Chinese market. First, in order to achieve stable profits, the franchise corporation needs to support the operation of the individual franchisee through incentives and standardization of services. Second, because trust between the franchisor and franchisee has a positive effect on management performance, on-going discussion and cooperation is necessary to reduce the level of conflict.

• Korean Journal of Heritage: History & Science
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• v.42 no.1
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• pp.122-142
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• 2009

This study explored all domestic and international theories for maintenance and health enhancement of an old and big tree, and carried out the anatomical survey of the operation part of the tree toward he current status of domestic surgery and the perception survey of an expert group, and drew out following conclusion through the process of suggesting its reform plan. First, as a result of analyzing the correlation of the 67 subject trees with their ages, growth status. surroundings, it revealed that they were closely related to positional characteristic, damage size, whereas were little related to materials by fillers. Second, the size of the affected part was the most frequent at the bough sheared part under $0.09m^2$, and the hollow size by position(part) was the biggest at 'root + stem' starting from the behind of the main root and stem As a result of analyzing the correlation, the same result was elicited at the group with low correlation. Third, the problem was serious in charging the fillers (especially urethane) in the big hollow or exposed root produced at the behind of the root and stem part, or surface-processing it. The benefit by charging the hollow part was analyzed as not so much. Fourth, the surface-processing of fillers currently used (artificial bark) is mainly 'epoxy+woven fabric+cork', but it is not flexible, so it has brought forth problems of frequent cracks and cracked surface at the joint part with the treetextured part. Fifth, the correlation with the external status of the operated part was very high with the closeness, surface condition, formation of adhesive tissue and internal survey result. Sixth, the most influential thing on flushing by the wrong management of an old and big tree was banking, and a wrong pruning was the source of the ground part damage. In pruning a small bough can easily recover itself from its damage as its formation of adhesive tissue when it is cut by a standard method. Seventh, the parameters affecting the times of related business handling of an old and big tree are 'the need of the conscious reform of the manager and related business'. Eighth, a reform plan in an institutional aspect can include the arrangement of the law and organization of the old and big tree management and preservation at an institutional aspect. This study for preparing a reform plan through the status survey of the designated old and big tree, has a limit inducing a reform plan based on the status survey through individual research, and a weak point suggesting grounds by any statistical data. This can be complemented by subsequent studies.

• Journal of Distribution Research
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• v.17 no.5
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• pp.1-23
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• 2012

The conflict between major corporations and small and medium-sized businesses is being aggravated, the trickle down effect is not working properly, and, as the controversy surrounding the effectiveness of the business limiting system continues to swirl, the plan proposed to protect the business domain of small and medium-sized businesses, resolve polarization between these businesses and large corporations, and protect small family run stores is the suitable business type designation system for small and medium-sized businesses. The current status of carrying out this system of selecting suitable business types among small and medium-sized businesses involves receiving applications for 234 items among the suitable business types and items from small and medium-sized businesses in manufacturing, and then selecting the items of the consultative group by analyzing and investigating the actual conditions. Suitable business type designation in the service industry will involve designation with priority on business types that are experiencing social conflict. Three major classifications of the service industry, related to the livelihood of small and medium-sized businesses, will be first designated, and subsequently this will be expanded sequentially. However, there is the concern that when designated as a suitable business type or item, this will hinder the growth motive for small to medium-sized businesses, and designation all cause decrease in consumer welfare. Also it is highly likely that it will operate as a prior regulation, cause side-effects by limiting competition systematically, and also be in violation against the main regulations of the FTA system. Moreover, it is pointed out that the system does not sufficiently reflect reverse discrimination factor against large corporations. Because conflict between small to medium sized businesses and large corporations results from the expansion of corporations to the service industry, which is unrelated to their key industry, it is necessary to introduce an advanced contract method like a master franchise or local franchise system and to develop local small to medium sized businesses through a franchise system to protect these businesses and dealers. However, this method may have an effect that contributes to stronger competitiveness of small to medium sized franchise businesses by advancing their competitiveness and operational methods a step further, but also has many negative aspects. First, as revealed by the Ministry of Knowledge Economy, the franchise industry is contributing to the strengthening of competitiveness through the economy of scale by organizing existing individual proprietors and increasing the success rate of new businesses. It is also revealed to be a response measure by the government to stabilize the economy of ordinary people and is emphasized as a 'useful way' to revitalize the service industry and improve the competitiveness of individual proprietors, and has been involved in contributions to creating jobs and expanding the domestic market by providing various services to consumers. From this viewpoint, franchises fit the purpose of the suitable business type system and is not something that is against it. Second, designation as a suitable business type may decrease investment for overseas expansion, R&D, and food safety, as well negatively affect the expansion of overseas corporations that have entered the domestic market, due to the contraction and low morale of large domestic franchise corporations that have competitiveness internationally. Also because domestic franchise businesses are hard pressed to secure competitiveness with multinational overseas franchise corporations that are operating in Korea, the system may cause difficulty for domestic franchise businesses in securing international competitiveness and also may result in reverse discrimination against these overseas franchise corporations. Third, the designation of suitable business type and item can limit the opportunity of selection for consumers who have up to now used those products and can cause a negative effect that reduces consumer welfare. Also, because there is the possibility that the range of consumer selection may be reduced when a few small to medium size businesses monopolize the market, by causing reverse discrimination between these businesses, the role of determining the utility of products must be left ot the consumer not the government. Lastly, it is desirable that this is carried out with the supplementation of deficient parts in the future, because fair trade is already secured with the enforcement of the franchise trade law and the best trade standard of the Fair Trade Commission. Overlapping regulations by the suitable business type designation is an excessive restriction in the franchise industry. Now, it is necessary to establish in the domestic franchise industry an environment where a global franchise corporation, which spreads Korean culture around the world, is capable of growing, and the active support by the government is needed. Therefore, systems that do not consider the process or background of the growth of franchise businesses and harm these businesses for the sole reason of them being large corporations must be removed. The inhibition of growth to franchise enterprises may decrease the sales of franchise stores, in some cases even bankrupt them, as well as cause other problems. Therefore the suitable business type system should not hinder large corporations, and as both small dealers and small to medium size businesses both aim at improving competitiveness and combined growth, large corporations, small dealers and small to medium sized businesses, based on their mutual cooperation, should not include franchise corporations that continue business relations with them in this system.

• Korean small business review
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• v.32 no.2
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• pp.209-223
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• 2010

Korea's business is composed of a few large-sized enterprises (which can be abbreviated as LSE) and a majority of small-sized enterprises (SSE). Although there has been a growing recognition of the need for the development of medium-sized enterprises (MSE) which can serve as a link between SSE and LSE, as yet there has not yet been a consensus on the definition, characteristics and the function of the MSE in Korea. Nowadays, the world is being globalized, and Japan and China are in competition to ne a great economic power. While East Asia is experiencing rapid changes, promoting MSE which can secure flexibility and efficiency through covering up the limitation of LSE and SSE is needed in order to respond the global market which is being specialized. The features of MSE in Japan can be listed as follows. First, the MSE in Japan is developing the company through getting into niche markets which are hard for major companies to enter rather than developing markets in order to compete against major companies directly. While MSEs are endeavoring to build the business firmly in the domestic market, they can possess special and competitive technical skills through trials and errors; so that they can get a chance develop their business through independent business system rather than putting their effort to compete against major companies. Second, from the MSEs with competitive edge in the market, there are many contributions to the national exportation. Those MSEs produce in domestic and maintain the quality of high price products which need cutting-edge technology, while they relocate the low and middle priced goods to the country where manufacturing costs are low, so that they can maintain the price competitiveness. Third, the industrial structure in Japan is formed from dual structure between major companies and small sized companies. In other words, in Japan's industrial structure which are composed of subcontract structure, this dual structure has taken a major role of small sized companies' growth and manufacturing businesses' international competitive power. Forth, MSE in Japan adopt a strategy of putting their value on qualitative scale growth rather than quantitative scale growth. In this paper, the case of Japanese MSE is analyzed. Along with its long history of Industrialization, Japan has a corporate environment where the SSEs can develop as a MSE and later a LSE through a full-support system. Among its SSEs, there are a number of world class corporations equipped with a large domestic market, win-win cooperation with the LSEs and an independent technology development. It can also be observed that these SSEs develop into MSEs with sustainable growth potentials. This study will focus on the condition under which the MSEs of Japan have been developed, and how they have survived the competition between SSEs and LSEs. Through this study, this paper attempts to offer solutions to Korea's polarization between the SSE and LSE, while providing the basis for SSEs revitalization. In general, if both extremities phenomenon deepen between LSE and SSE, there are possible fears of occurring disutility in national economy by the monopolization of LSE. For that reason, enterprise group, which can make SSE or MSE compete LSE in some area and ease the monopoly and oligopoly problem, is needed. This awareness has been shared for ages long. Nevertheless, there is no legal definition for MSE in Japan, and there is no definition about the enterprise size or unified view of MSE between scholars, but it is defined differently by each of academical person or research institution and study meeting. For that reason, this paper will organize the definition of MSE in Japan, and then will propose the characteristics of the background which has made MSE secure competitiveness and sustainable growth in global market. This study focus on that because through this process, the positive change to the awareness of MSE can be proposed in Korea and to seek the policy direction for building institutional framework which can make SSE become MES. Through this way, the fundamentals for SSE to become MSE can be managed and some appropriate suggestions which will be able to make MSE enter the global market in the future can also be proposed. Due to these facts, this study is very important and well timed task. In a sense of this way, this study will examine the definition and role of MSE in Japan. after this examination, this study will deal with the status, special feature, and promotion policy for MSE. Through this analysis of MSE in Japan, the foundation which be able to set the desirable role model for MSE in Korea can be proposed. Also, the political implication which is needed to push ahead to contribute to creating employment and economic growth through sustainable growth of MSEs in economic system of Korea can be offered through this study. It has been found that Japan's MSE functions as an indispensable link among various industrial structures by holding a significant position in employment rate, production and value added. Although the MSEs took up less than 1% of the entire number of businesses with 2700 manufacturing firms and 7000 non-manufacturing firms, its employment ratios are about 15%, while taking about 25% of the manufacturing industry's exports. In industries such as machinery and electronics which is considered Japan's major industry, the MSEs showed a higher than average ratio of manufacturing exports and employment rate. It can be analyzed that behind Japan's advantageous industries, close and deeply knit MSEs exist. Although there are no clearly stated policies geared towards the MSEs by the Japanese government, various political measures exist such as the R&D Project and the inducement of cooperation between enterprises which gives room for MSEs to participate in the SSE policies. In relation to these findings, the following practical measures can be considered in order to revitalize Korea's MSEs: First, there is a need for a legal definition of MSE and the incentives to provide legal support for its growth. Second, if a law to support the MSEs is established, it could provide a powerful inducement for the SSE to grow as a MSE, rather than stay as a SSE. Third, there is a need for a strategy of MSEs to establish a stable base in the domestic market and then advance to the global market with the accumulated trial and error and competitiveness. Fourth, the SSE themselves need the spirit of entrepreneurship in order to make the leap to a MSE. Because if nothing is to be changed about the system on the firms that grew, and the parts of the past custom was left to be managed alone, confusion and absence of management can take place. No matter how much tax favors the government will give and no matter how much incentive there could be through the policies, there are limits for industries to higher the ability to propagate. And because of that it is a period where industries need their own innovative skills to reform their firms.