Venture companies and POSCO. At first glance, the connection between the two seems irrelevant, but POSCO’s investment and support for ventures go a long way. In 1997, POSCO established POSTECH Capital (currently POSCO Capital) to foster venture companies, and, as of present, it is striving to find the future growth engine of the company through the venture platform.

ISSUE The foundation of venture startups and its growth is vulnerable

The advent of the 4th Industrial Revolution has caused a rapid shift in the future industrial paradigm, and existing companies are facing challenges of sustainable growth. As a countermeasure, many global companies are strengthening their competitiveness and looking for new business opportunities by investing and cooperating with venture companies.

So, what is the situation of the venture industry like in Korea? As a joke, it is said that in Korea, the best graduates only start a business when they fail to find a job. The issue is not only the lack of capital and resources but the lack of excellent personnel as well. In Korea, the economic structure is centered on large companies hence it is a challenge for venture companies to advance here. Moreover, due to COVID-19, a lot of business owners are facing a hard time, which has also made it hard for entrepreneurs to start new venture businesses.

According to a survey of the Korea Chamber of Commerce & Industry (KCCI) in 2017, 62% of venture companies in Korea couldn’t survive more than three years, ranking 25th among the 26 OECD member countries. However, if it is possible to create an ecosystem where large companies and venture companies can coexist, the situation will improve. Ventures can be provided with growth opportunities through joint research and testbeds with large companies, and large companies can obtain new growth opportunities and even profits.

The reason why large companies and ventures need to share growth with cooperation could be found here.

And it is also why POSCO is trying to invest in and nurture venture companies with its “Venture Platform,” which incorporates a Venture Valley and a Venture Fund. The POSCO Venture Platform utilizes its unique industry-academia-research infrastructure that includes Pohang University of Science & Technology (POSTECH) and the Research Institute of Industrial Science & Technology (RIST).

SOLUTION 1. Come to “POSCO Venture Valley”

To successfully establish a sound venture ecosystem, “startups” should become more active. POSCO has been helping young venture entrepreneurs lay the foundation to grow their businesses through research, investment attraction, and technology sharing through the “Venture Valley”.

When you hear the word ‘venture’ where is the first place that comes to mind? It would probably be Silicon Valley of the U.S. Silicon Valley is a startup cluster and a jungle of entrepreneurs, housing giant technology companies, such as Google, Apple, and Tesla. The objective of POSCO’s Venture Valley is to build the world’s best venture cluster and produce unicorn companies to become Korea’s Silicon Valley.

Other large companies only participate in the investment of ventures, but POSCO aims to create a Venture Valley as well, with its outstanding venture infrastructure. The distinctive feature of POSCO Venture Valley is that it is backed up with the following factors: 1) space for startups in their early stage, 2) POSTECH, which offers exceptional talent, 3) RIST and R&D infra, that support the advancement of technologies and products, and 4) MOU with MSS and the KVCA.

To this end, POSCO decided to invest 200 billion KRW to create “Incubating Centers” for venture companies in Seoul, Pohang, and Gwangyang, and named it “Change-up Ground”. The incubator facilities would change the future of startups and act as a ground to upgrade their business.

In July, POSCO opened “Change Up Ground,” the first public-private partnership in TIPS (Tech Incubator Program for Startup Korea) Town, Seoul. TIPS Town is a Korean version of Silicon Valley that the Ministry of SMEs and Startups (MSS) has been constructing in Seoul since 2015. MSS is operating the areas Street S1 to S4, while Gangnam-gu Office runs S5. POSCO became the first private company to cooperate with MSS and opened S6.

Pohang Change Up Ground is under construction on a total floor area of 28,000㎡ with seven floors and is expected to be completed in the first half of 2021, housing more than 100 venture companies. Startup tenants can receive support according to the development phase, from startup training to initial investment. Through corporate specialized consulting and mentoring, the ventures will be prepared with a theoretical and practical foundation and participate in various events, such as the Idea Market Place (IMP) and the Venture Valley Biz-Day, where they can attract investment and advance into the market. Also, through coordination with the venture capital, which supports the Venture Valley, the venture companies can apply for the “TIPS” program, a program to support private investment-led technology startups, which might eventually lead to investment from the government. Ventures that have successfully established their foundation in Pohang and Gwangyang can promote and expand their business into the metropolitan area with a secured base on the Streets of Entrepreneurs established by the Ministry of SMEs and Startups in Seoul.

Meanwhile, POSCO launched the “Venture Valley Business Council” in September 2019. The council is to foster youth ventures by communicating with venture companies, incubators, and local governments in Pohang and Gwangyang. To promote technology exchange and benchmarking among ventures, the Venture Valley Business Council will form subcommittees of the three major business areas of POSCO Venture Valley: Materials, Energy, Environment, Bio-pharmaceuticals, and Smart City & Smart Factory. Through this, POSCO plans to provide practical support in creating a venture ecosystem, revitalizing the local economy, and creating jobs for the youth.

With the Venture Valley, POSCO not only utilizes POSTECH’s master’s and doctoral personnel, professors/researchers, but also various startup infrastructure of Pohang in order to build a Korean version of Silicon Valley in Pohang. Therefore, POSCO aims to produce 100 entrepreneurs from POSTECH per year and produce two unicorn companies.

SOLUTION 2. Here Comes the “Venture Fund”

– Investment for POSCO’s future growth also carried out through Venture Fund

Another strategy of POSCO’s Venture Platform is the Venture Fund. While Venture Valley supports in-house and external venture companies to start businesses and grow further with POSCO’s industry-academia-research infrastructure, Venture Fund invests in not only occupying companies of the Venture Valley but also aspiring domestic and overseas ventures to discover new growth engines for POSCO Group. The steel industry is a profound one centered on utilizing heavy equipment, so keeping up with the speed and determination required by the venture sector is challenging. Therefore, the strategy aims to discover new businesses through this kind of open innovation.

Attempts to discover new business ideas and technologies by investing in venture companies aren’t new among large companies in Korea and overseas. On the contrary, it has become an inevitable decision for companies in order to survive the rapidly changing business environment of the 4th Industrial Revolution era. Then, what is the investment strategy of POSCO Venture Fund that sets it aside from other large companies?

POSCO forms and operates various types of funds tailored to the characteristics of each phase of the venture business growth. POSCO’s Venture Fund is differentiated in that it supports the rapid growth of promising venture companies at each stage and executes follow-up investments in outstanding ventures, aligning them to POSCO’s new growth domains.

The investment sector of the fund includes not only new growth domains set by the company but also various promising areas of the 4th Industrial Revolution era. Promising business areas identified in the fund operation process are then included as the company’s new growth domains, which are then sought as new business opportunities to flexibly respond to the rapidly changing business environment. POSCO plans to utilize the Venture Fund investment as a subsidiary means of M&A, and make it a core operating principle to discover the company’s mid- & long-term new growth business and generate investment returns.

Funds for the promising investment field are classified into two, depending on the growth stage of the company: “Seed Fund” is one and the “Growth Fund” is the other. The “Seed Fund” will provide seed funding for newly established ventures that are based on outstanding technologies possessed by university laboratories. For this purpose, in 2019, POSCO created two Seed funds that are operated by POSTECH Holdings and Seoul Techno Holdings, and plans to expand the scope of discovering excellent start-ups of leading domestic universities in their early stages. Recently, POSCO also created the IMP Fund dedicated to supporting selected ventures of the IMP (Idea Market Place) program so that the ventures can receive continuous support for growth after the program.

The “Growth Fund” invests in domestic and overseas venture companies that have entered a rapid growth stage after the venture’s new idea has gone through initial verification in the market. It is operated through collaboration with the best investment operators. As of 2019, there are three domestic Growth Funds operated by SV Investment, Premier Partners, and STIC Ventures, and they are currently being invested in ventures.

Through overseas funds, POSCO plans to read the trends of advanced technology in high-tech and promising fields at an early stage and discover aspiring global ventures based in Silicon Valley. In 2019, “Schroders” was chosen as the investment operator, and the fund was utilized as Fund of Funds to invest in promising overseas ventures. By utilizing the investment operator’s global venture network, POSCO hopes to support overseas investment and entry into the global market, which are essential factors for the quantum jump of domestic venture companies.

Since last year, a total of 95 billion KRW was invested in “Seed” and “Growth” funds investing in these promising fields, and investments will continue in the future as well.

The funds investing in the domain field focus on new growth domains as their main investment field, including the secondary battery material business field, which POSCO is currently pursuing as a new growth engine. In 2019, 50 billion KRW was invested in the “CVC Fund,” and in August 2020, an investment plan of 80 billion KRW was confirmed for the “Strategic Fund,” laying the foundation for investment in the entire growth cycle.

The “CVC Fund,” which is operated by POSCO Capital, is created with POSCO Group funds only and is used to invest in outstanding ventures within the domain. The fund seeks to increase strategic links by partnering with the investment operator from the early stage of the venture. The “Strategic Fund” is a fund investing in venture companies that meet POSCO’s new business strategy and have grown beyond a particular scale. With outstanding external operators, like the “Korea Growth Investment Corporation,” the fund is to be used in expanding the scope of discovering outstanding companies and increasing the scale of investment.

The venture fund is planned to be created based on 800 billion KRW, and the fund strategy will continue to be operated yearly in line with changes in the domestic and global venture investment market and the direction of the group’s new business strategy. In addition, POSCO plans to continue the venture fund in the long-term by utilizing the profits generated from the fund.

Also, POSCO will further enhance cooperation with outstanding domestic investment operators and leading investment institutions, such as KDB Bank, Korea Venture Investment Corporation, and Korea Growth Investment Corporation, that are jointly participating in the existing funds, and strengthen the network with the global venture investment industry.

With these endeavors, POSCO Venture Fund will be able to play a part in the growth of young entrepreneurs, who will become new engines of national competitiveness, while discovering venture companies with potential and nurturing them as new businesses of the company.

※ POSCO Idea Market Place Cases

The Venture Platform is what POSCO has prepared for venture companies that will lead the future with creative ideas and passion! From Venture Funds worth 1 trillion KRW and Venture Valleys to the Idea Market Place for entrepreneurs, POSCO will continue to invest in venture companies to secure new growth engines and revitalize the local economy.

As children grow in height each year, their dreams change year by year as well. What dreams do children have these days?

Last year, the Ministry of Education and Korea Research Institute for Vocational Education & Training surveyed 20,000 elementary, middle, and high school students. The survey showed that the most desired job of elementary school students was an athlete, while middle and high school students wanted to become teachers the most. Among the desired job list of elementary school students, Creator (YouTube, BJ, etc.), which ranked 10th two years ago, rose to third place. Another interesting fact is that beauty designer, cartoonist (webtoon), and baker topped the list of popular jobs.

The fact that children’s dreams change rapidly every year reflects how fast our society is changing. For this reason, vocational education in modern society requires more delicate and detailed plans than ever before. However, universal vocational education for all is challenging in reality. This is especially the case for underprivileged children likely to be in blind spots.

According to a survey of 1,100 elementary, middle, and high schools last year, the teachers in charge of vocational education stated that efforts to consider underprivileged groups, such as multicultural families, were insufficient compared to other factors while establishing the educational plans.

A dream seems something like a vague hope, difficult to have, and more difficult to achieve. It is the responsibility of the older generation to help the future generation specify and realize their vague hopes. Those in an environment vulnerable to fulfilling their dreams need only a little more help than others.

SOLUTION ‘Do Dream’, ‘Chin Chin Rainbow Project’, ‘UNESCO Project for Out-of-school Children’

To ensure that not a single child is excluded from ‘dreaming’, POSCO operates three programs mainly. The first is ‘Do Dream,’ a support program for the independence of children leaving welfare centers. The second is the ‘Chin Chin Rainbow’ project, which provides support for children from multicultural families, and the third is the ‘Out-of-school Children’ project, which offers basic education support for global youths living in harsh conditions.

Do Take Action, Do Dream!

Park, who has lived in a welfare center for a long time, said he suddenly made up his mind while watching his classmates taking exams in their second grade in high school.

“I shouldn’t live like this anymore.”

Although he had always taken the last place in the entire school, he worked hard and was able to enter the Department of Social Welfare at a university he wanted. Park’s dream was to become a social worker.

“I chose the Department of Social Welfare because I wanted to give back as much as I received. Since I was from a completely different background from others, I always worked hard at university as well.”

Park’s grades were good enough to receive a full scholarship, but studying and earning living expenses at the same time wasn’t an easy task. To make matters worse, a friend took advantage of Park’s self-reliance settlement fund, which was given to Park as he left the welfare center. However, Park wasn’t in despair. He took up a part-time job to cover tuition and living expenses, and even went on to graduate school.

Even though Park was more positive than anyone else, a sense of helplessness and despair struck him as hardships in his life continued with no end in sight. Park gave up his dream of becoming a social worker and got a job at a small event company. However, he soon ended up quitting his job and was wandering around. And this was when ‘Do Dream’ lent Park a helping hand.

Around 2,600 children leave welfare centers per year. The National Center for the Rights of the Child carries out various programs with numerous non-profit foundations to support the self-reliance and employment of the children leaving the centers on turning 18, and POSCO’s ‘Do Dream’ is one of these programs.

POSCO 1% Foundation provides up to 10 million KRW per person, including annual education expenses, living expenses, interview preparation fees, and benefits for successful employment, to help the children leaving the welfare centers focus on career development and succeed in finding a job.

POSCO 1% Foundation is a non-profit foundation operated with funds donated — 1% of the monthly pay — by employees and executives of POSCO Group and its partners. The fund is managed as a matching grant, with the company matching employee donations one-to-one.

※ Related Article: POSCO ‘Employees’ Giving Program: “1% Sharing”

While most of the civil support for the independence of children leaving welfare centers are regarding their tuition fees when entering college, POSCO’s program, ‘Do Dream,’ is quite different. The program supports all education that would help in the economic independence of these children, whether or not they go to college. Those preparing to get a job can apply for the program until the age of 26 after leaving welfare centers, and this was the case for Park.

Park decided to realize his dream of becoming a social worker with the support from ‘Do Dream,’ and after submitting several resumes, he finally succeeded in getting a job as a social worker at a welfare center.

“Thanks to Do Dream, I was able to prepare for my job with a comfortable mind, considering only my aptitude and plans. Even after the support ends, I will continue to move further and prepare for the social worker exam as well. Wouldn’t I become a social worker with good influence to change the world then?”

As a measure to help those children leaving welfare centers to not give up on their dreams, POSCO 1% Foundation has expanded the number of recipients from 20 to 35 this year and has also increased 1:1 case management sessions from two to ten times a year. In addition to the support funds, the Foundation carries out other programs that can be of practical help, including special lectures on employment, mentoring, and regional gatherings.

‘Chin Chin Rainbow Project’: For Those From Different Backgrounds

The Ministry of Gender Equality and Family operates a variety of youth support policies, including those youths with a migrant background. Under Article 18 of the Youth Welfare Support Act, youths with a migrant background are youths from multicultural families or are North Korean defectors settling in South Korean and require social, cultural adaptation, and language learning support.

POSCO 1% Foundation operates the ‘Chin Chin Rainbow’ program for youths from multicultural and underprivileged families with high growth potential. The program provides vocational education expenses in various fields, such as arts, sports, and IT, and conducts 1:1 mentoring and summer camps. Since 2014, a total of 371 youths have received support, and starting from last year, the number of recipients has been doubled — from the previous 60 — mainly in Pohang and Gwangyang.

Every Child Has the Right to Receive Education – Support Program for Out-of-school Children

POSCO 1% Foundation has been carrying out the ‘UNESCO Project for Out-of-school Children’ since 2018, with a mission to ensure that all children around the world can receive basic education. There are 64 million children worldwide who cannot even go to elementary school due to unavoidable reasons, such as poverty, disability, violence, drugs, child labor, human trafficking, war, and refugees. POSCO is providing basic education and meals, and acting as a refuge for 1,150 Thai and Indonesian children living in these conditions so that they can dream of a new future.

In addition, POSCO 1% Foundation has been operating the ‘1% Art School,’ a program that helps children in Pohang and Gwangyang experience various art activities, and ‘Science Beyond Imagination,’ an experiential science education program. POSCO TJ Park Foundation operates the ‘Vision Scholarship Program’ to relieve the gap of education opportunities in Pohang and Gwanyang, and also a mentoring program for university students, ‘POSCO Dream Camp’.

POSCO’s support for future generations will continue until the day comes of a world everyone and anyone can dream!

ISSUE The localization rate of materials, parts, and equipment in South Korea are in the mid-60%.

Last year, export regulations on semiconductor materials were an issue in South Korea. Voices were raised on the importance of localizing related technologies. Since the materials, parts, and equipment needed for manufacturing weren’t localized enough, the sudden regulations imposed a challenge. Luckily, however, the event did not escalate into a crisis and did not cause as much damage as expected because Korean companies quickly jumped into handling the situation. The large companies of the manufacturing industry had the technology, and SMEs — aka Hidden Champions — supported them. The key was the cooperation between large companies and SMEs.

However, it is known that SMEs in Korea are generally not competitive in technology. According to the 2018 Survey on Korea Federation of SMEs, the technology of Korean SMEs is 1.9 years behind the U.S., 1.8 years behind Japan, and 1.6 years behind Germany, but estimated to be 2.7 years ahead of China. The technology gap with major countries affects the survival of SMEs themselves. However, it is also a threat that can adversely affect the entire industrial ecosystem of Korea, including large companies, in a chain reaction.

As mentioned in [Corporate Citizen POSCO’s SOLUTION Part 2] “Sharing Competitiveness, Sharing Growth,” polarization between large companies and SMEs is deepening, and cooperation is required for the industrial ecosystem.

SMEs need support from large companies, and large companies need the expertise of SMEs. Building an industrial ecosystem where all parties can coexist would be a way to cope with the rapidly changing business environment.

SOLUTION POSCO Presents “Benefit Sharing”

The Korean government is operating a “Benefit Sharing” system as a support program to create an industrial ecosystem where large companies and SMEs coexist. Actually, POSCO had first introduced the “Benefit Sharing” system in Korea in 2004. The system is one of POSCO’s seven major shared growth programs, which is about carrying out improvement tasks together with SMEs and sharing the achieved benefit. This in-house system was acknowledged as a successful business model and has spread to the entire industry.

Through the Benefit Sharing system, SMEs get the opportunity to stabilize supply and increase sales while focusing on technology development. On the other hand, large companies can attain competitiveness, such as improving product quality, through the expertise of SMEs. This has proved to be of advantage to both large companies and SMEs since their coexistence fosters each other’s competitiveness as well. Especially this year, POSCO has branded its shared growth program named “Change Up Together,” and is expanding support for its overall shared growth programs, including the benefit sharing system.

Task Performance Process Any POSCO employee or employee of suppliers is free to propose improvement tasks. The following five stages are carried out in order: Task selection, task performance, task evaluation, performance benefit, and monitoring. The entire process is operated transparently through a specialized system. (See the process of the Benefit Sharing system)

In the early stages of the operation, the concerning department differed from one task to another, making it inefficient to carry out the tasks. However, as of present, a unified department in charge of operation has enabled a one-stop service — from task selection to benefit sharing — eliminating the inconvenience of the past. Also, POSCO is implementing a non-financial model that carries out tasks that are difficult to quantify, such as tasks concerning safety and the environment.

As of last year, POSCO recorded a high localization rate of about 90%, which can be said to be the result of its long-term benefit sharing activities. It is a result achieved by integrating the technology of SMEs into specialized fields that were difficult for POSCO to improve on its own.

Task Evaluation & Benefit Recently, POSCO has upgraded the benefit sharing system by strengthening the benefit for successful tasks. It provides various incentives, such as rewarding 50% of the financial performance in cash or signing a long-term supply right for the solution. It has also sought to reduce the burden of SMEs with a new measure that compensates at least 50% of the task cost even if the task turns out to be inadequate.

In 2019, POSCO carried out a total of 174 tasks and rewarded 42.9 billion KRW for completed tasks. Since introducing the benefit sharing system in 2004, the company has operated 4,916 accumulated number of tasks, and accumulated shared benefits reach 552.8 billion KRW.

Amidst the harsh times triggered by the COVID-19 pandemic, POSCO is striving to grow together with its customers, suppliers, and partner companies. The company will expand substantial performance benefits, extend the participation of companies that have no direct business with POSCO, and support channels for growth through joint development and technology sales. As a measure to expand and sustain its achievements, POSCO plans to maximize the shared growth value by applying technologies in similar processes as well.

Expanding the benefit sharing system isn’t a solution for the growth of POSCO, but one for the coexistence of large companies and SMEs in the industrial ecosystem as well. POSCO will continue to expand the benefit sharing system and create opportunities for talented SMEs to grow further.

※ Case Study of the Benefit Sharing System

Here is a couple of the same age who have been married for eight years. On being asked why this couple, who live in Seoul and work in stable large companies, didn’t have any children, they replied that it wasn’t that they didn’t want children — they just couldn’t. The couple managed to buy a house in Seoul (Houses in Seoul are quite expensive) with a loan on getting married, and when they decided to have a child about three years ago, the first problem they faced was “infertility.”

“But even if we do have a child, there’s no one to look after the baby.”

The second problem they will face after giving birth would be “career breaks.” The couple grew up in the provinces and got a job after graduating from college in Seoul. They have no parents or relatives who can take care of their children in Seoul. They leave home for work at 7 a.m. and arrive back home at 7 p.m. Both spend 12 hours out of 24 hours a day outside their house, so if these two have a child, at least one of them must take parental leave.

However, the couple has seen colleagues being assigned to another department or district and pushed out of promotion after parental leave — giving them another reason to hesitate on having children.

“Will I be able to come back to my workplace after parental leave?”

ISSUE ‘Childbirth’ & ‘parenting’ have become an obstacle for the 2040 age group.

The birth rate in Korea is falling rapidly. According to Statistics Korea, the total fertility rate, which is the average number of children a woman is expected to have during her lifetime, fell below one for the first time last year, marking the lowest in the world. There is also a prospect that the number of births and deaths will be reversed for the first time this year, with a further drop to 0.8.

It is a known fact that when the working age population decreases and population ageing increases, the burden of younger generations will inevitably expand and result in sluggish economic growth due to reduced consumption. However, for the 2040 age group, childbirth has long been a matter of choice, not a must. As seen in the case of the couple earlier, childbirth is a challenge, even for economically stable families. This is because childbirth and parenting are considered as obstacles in contemporary living conditions, where both having and raising children are difficult tasks. The obstacles not only make it difficult to sustain the current life but rather deteriorate the quality of life, regardless of class and age.

On recognizing this matter, the government’s childbirth control policy is also gradually shifting its paradigm.

*Source: Presidential Committee on Ageing Society and Population Policy (PCASPP)

In the past, the government-led childbirth control policy targeting low-income families was focalized on simply increasing birthrate and the number of newborns. However, the goal has now been changed to improve the quality of life for 2040 generations.

A society where working parents can give birth to and raise children at ease. Could it be feasible?

SOLUTION A POSCO-type role model focusing on improving the quality of life to resolve the low birthrate issue

1) Introducing the “working-from-home for parenting” system for the first time in Korea

Last year, POSCO presented a POSCO-type role model as one of the six major Corporate Citizenship projects and is currently implementing various policies to promote childbirth according to the life cycle of individuals. In particular, POSCO applied the “working-from-home for child care” system for the first time in Korea to prevent career breaks of working parents and also improve the quality of life of employees by balancing work and life.

POSCO’s ‘working-from-home for parenting system without career breaks’ allows employees with children under the age of eight or 2nd grade of elementary school to apply for full-day (8 hours) or half-day (4 hours) working-from-home, depending on the work conditions. Employees applying for the full-day working-from-home system will have the same working hours — from 8 a.m. to 5 p.m. — as other employees. Employees applying for the half-day working-from-home system can choose their working hours according to the parenting environment from the following options: 8 to 12, 10 to 15, and 13 to 17. Depending on the number of children, employees can utilize this system for up to six years. POSCO provides the working-from-home employees with the same salary, welfare, and promotion system as those working in the offices.

The system has been under implementation since July 1. A POSCO employee, who applied for this working-from-home system starting on July 13, said, “It took three hours to commute from my mother’s, who takes care of my 14-month-old child. I was beginning to understand why people quit their jobs, and just then, POSCO introduced the working-from-home system, and I applied for it.” She added, “Now that I can concentrate on my child with the time saved from commuting, I think I can play a better role than before.”

POSCO plans to expand the ‘Working-from-home for parenting without career breaks’ to its group companies.

2) A POSCO-type role model: childbirth policy fitting into the life cycle

Since 2017, POSCO has already been operating a POSCO-type childbirth policy, that covers all phases of the life cycle from marriage, pregnancy, childbirth, and parenting.

In particular, POSCO allows a maximum of 10 days leave for infertility treatment, which is the primary factor of low birthrate and provides up to 1 million KRW (per session) as support for expenses that are offered a maximum of 10 times.

POSCO employees will also receive maternity benefits: 2 million for the firstborn and 5 million KRW for the second. Once the employees’ maternity leave ends, they automatically go into paternity leave, which can be used up to three years, without a separate application procedure. Also, employees can freely adjust working types and hours according to the parenting environment of each individual, utilizing various systems, such as the system of working reduced hours during the child-rearing period and the system of flexible working hours.

3) Opening Workplace Childcare Center

POSCO operates 15 workplace childcare centers for employees’ children in Pohang, Gwangyang, Seoul, and the metropolitan area, two of which are workplace shared childcare centers. Among the total number of children enrolled in the two childcare centers, the proportion of SMEs’ children — including partner companies — amounts to over 50%. Established as a measure to resolve the low birth rate issue, the two childcare centers are constructed one each in Pohang and Gwangyang respectively and have been under operation from earlier this year.

▲ POSCO workplace childcare centers: POSCO Dongchon Childcare Center in Pohang (left); POSCO Geumdang Childcare Center in Gwangyang (right)

POSCO Dongchon Childcare Center is located right next to POSCO’s headquarters in Pohang. It is equipped with an indoor garden that features a nature-friendly interior space filled with exotic plants, such as lemon and banana trees. On the other hand, POSCO Geumdang Childcare Center in Gwangyang is designed to allow children to play freely in various outdoor playgrounds. Located in the housing complex, it is within walking distances from nearby facilities like marts, movie theaters, libraries, and parks.

The POSCO Seoul Childcare Center, located in POSCO Center, Seoul, can accommodate up to 200 children. In addition to this, POSCO recently renovated its second childcare center in Seoul and opened it so that not only POSCO but also children of partners and residents can be enrolled.

Since 2011, POSCO has been certified as an excellent family-friendly company every year by the Ministry of Gender Equality and Family, and last year, 17 POSCO Group companies received certification. POSCO’s efforts to become a ‘childbirth-friendly company’ with innovative childbirth support activities continue this year as well. The company shared various case studies on the issue of the declining birthrate and provided a forum for spreading social discussions. At the ‘2020 Low Birthrate Symposium’ held at POSCO Center on July 14, POSCO shared the various efforts that it had implemented so far to present a role model and resolve the low birthrate issue. The company also discussed the role of corporates in creating quality jobs that can support the parenting of employees amid the Demographic Cliff crisis.

Here is an artwork titled “Hide and Seek Red.” One additional information is that the painter of this artwork is someone with an autistic developmental disorder.

“How could he create such an artwork when he has a disability?”

If this was the first question to pop out of your mind, you might be looking at this artwork with the perception that this is an artwork by a “disabled person,” rather than perceiving it as a work of art as it is.

ISSUE Disability artists face challenges to overcome the barriers of perception and the lack of opportunity.

Artists with disabilities carry on their journeys in life, surpassing the challenges of their bodies. However, they still encounter another high wall to overcome — the “matter of perception.” Many people perceive artworks and artistic activities of disability artists as “arts done by disabled persons,” rather than just “arts.”

Arts done by disabled persons is a term defining the act of artistic creation or expression from someone with physical or mental disabilities. Simply put, the term focuses on the disabilities of the performers instead of the activities themselves. Considering the disabilities of the artists before appreciating the artwork for itself, is the wall of perception that many disability artists face.
※ “Hide and Seek Red” depicts a character covering his eyes with one arm and his friends who are hiding, revealing only their faces. According to the artist’s mother, the artist didn’t have many close friends in his childhood. Then who are the friends hidden in the painting?

Another high wall blocking artists with disabilities is the problem of “opportunity.”

Let’s look into the fifth comprehensive policy plan for people with disabilities, issued by the Ministry of Health and Welfare in 2018.

The first to third policy plan (1998~2012) for people with disabilities was mainly about ensuring the equality and rights of the disabled persons. The fourth and fifth (2013~2022) policy plan focuses on relieving the gap between the lives of disabled and non-disabled persons. For this purpose, they include details that assert the importance of providing disabled persons with opportunities in education, culture, and sports sectors.

In reality, many disability artists have difficulties attracting the public’s attention, despite their artistic talents, since they lack opportunities to receive proper education or showcase their artworks. According to the <2018 Examination and Research of the Current Condition of Arts and Culture of Disabled Artists>, about 41 percent of disability artists responded that there weren’t enough opportunities to present their artistic activities. The figure is twice higher than the 20 percent of respondents who said, “It’s enough”.

Not only this, disability artists are struggling with publicity as well.

When asked if works of disability artists needed more publicity, more than 85 percent said it was “necessary,” with half of them deeming publicity “very necessary.” Despite such a dire need for promotion, the survey revealed that more than 60 percent of disability artists don’t have accounts for online artistic activities, such as YouTube, blogs, and other SNS channels. Only three out of ten respondents said that they actually engage in online activities.

Amidst the unsolved challenges of perception and lack of opportunities, a new variable has emerged in our lives today — the Era of New Normal. Will the gap between disability artists and non-disabled artists be narrowed in our reality where untact has become the new normal?

SOLUTION Collaboration + Art = CollaboArtion

POSCO 1% Foundation, a non-profit foundation operated with donations — 1% of the monthly pay — from executives and employees of POSCO Group and its partner companies, has devised a new project this year to support disability artists. The project has two objectives: improving the perception of disability artists is one, and putting disability artists on the map with genuine content and influential channels is another. Thus, the new project of POSCO 1% Foundation, “CollaboArtion,” was born.

The “CollaboArtion” project undertakes two programs. The first is providing opportunities where disability artists can communicate with the public through collaboration videos with celebrities. The second is creating personal storytelling videos of disability artists and promoting their artistic talents, which would present them with better opportunities to participate in artistic activities.

In Britain, where disability arts are well-established, there is a term called “inclusive arts.” It is a form of art where disability artists and non-disabled artists collaborate creatively and interactively. The “CollaboArtion” project is also an inclusive art, providing both disability and non-disabled artists with opportunities to improve their artistic level through unbiased and unrestricted artistic activities and collaborations.

POSCO 1% Foundation invited ten teams of disabled artists with recommendations from the Korea Disabled Artist Association: Boo-Yeol Han (western-style painter, developmental disorder), Hun Lee (one-handed pianist, brain lesion disorder), Hwan Park (western-style painter, visual impairment), Sung-Jin Cho (one-handed magician, brain lesion disorder), Yong-Ho Heo (children’s book author, general paralysis), Moon-Jung Choi & Soo-Min Chae (wheelchair dancers, physical disability), A-Ra Ko (ballerina, auditory disorder), Yae-Na Choi (Pansori, visual impairment), Ji-Yeon Kim (rapper, auditory disorder), and Min-Ju Kim (web novel author, brain lesion disorder).

Each team will create two video contents — one original collaboration video and one impressive storytelling video — with 14 celebrities, including designer Hyeong-Cheol Jan, singer Min-Kyung Kang, and YouTube star Big Marvel. All videos are produced by a professional MCN (Multi-Channel Network) company ‘Treasure Hunter.’ The contents will be released on “POSCO TV, ” POSCO’s YouTube channel, as well as the channels of the influencers.

The first collaboration video featuring Boo-Yeol Han, a drawing artist, designer Hyeong-Cheol Jang, and YouTube star Korea Grandma Mak-Rye Park was uploaded on June 25. Boo-Yeol Han is the painter of the artwork “Hide and Seek Red” seen above and the first Korean autistic live drawing artist. The video features Korea Grandma Mak-Rye Park wearing an outfit, designed by Hyeong-Cheol Jang with the artwork of Boo-Yeol Han. The video, uploaded on POSCO TV, gives a glimpse of the life and works of the artist Boo-Yeol Han. Han’s story is delivered directly from him and his mother, presenting the viewers with deep emotions. Starting with Han’s video, POSCO TV will post these very special videos one by one until October.

The most affected by the COVID-19 issue regarding employment would be the youth. Though being the most productive age group, the youth are faced with a high unemployment rate, and this is expected to continue for the present as the COVID-19 pandemic hasn’t subsided yet. The issue isn’t confined to the labor market alone. As youth unemployment intensifies, it triggers a chain reaction. Young people put off and delay getting married and having children, which is more likely to accelerate population ageing — another severe issue in Korean society.

According to a survey conducted in May by the Korean Statistical Information Service (KOSIS), the unemployment rate of youth (ages 15 to 29) recorded 10.2 percent, and the number of unemployed youth reached 426,000, the highest among all age groups. The Economically Active Population Survey of Statistics Korea stated that as of May 2020, youth unemployment rate* was the highest among the record of each May since 1982.

^*Youth Unemployment Rate: The proportion of unemployed persons among the economically active population of ages 15 to 29.

The unemployment rate in the first half of 2020 recorded 7.7 percent, with 320,000 unemployed persons. Compared with these figures, the number of unemployed youth has increased by more than 100,000, and the unemployment rate a sharp increase of nearly 3 percent. For the many youth job seekers, this 10 percent figure is bound to seem much more enormous.

The best solution for companies to resolve youth unemployment would be to expand the company’s employment through growth. However, with the global economy facing an economic slowdown, and the recent COVID-19 issue, the limits of this method for the company has become apparent.

SOLUTION 1. POSCO’s Practical Support: POSCO Youth Dream

POSCO customized training programs for job seekers. The objective was to provide real-life business knowledge and practical experience that could be of practical help in the workplace. POSCO also paid careful attention to help youth explore their careers and realize their dreams.

POSCO’s ‘AI & Big Data Academy,’ and the ‘Incubating School for Startups’ are all results of POSCO’s endeavor. The ‘POSCO Employment Academy’ enables trainees to enhance both basic and problem-solving skills, while the ‘AI & Big Data Academy’ cultivates expert professionals in engineering and technologies. The ‘Incubating School for Startups’ supports entrepreneurs towards establishing successful start-ups. POSCO has integrated the three training programs into a single name, POSCO Youth Dream, and has successfully branded the program as its own. The program, completed with POSCO’s existing resources — including POSTECH and POSCO Group University — is already making huge strides. As of 2019, a total of 1,108 job seekers have received training through the program, and 302 trainees (27%) succeeded in finding a job or starting a business. POSCO intends to train 5,500 job seekers over the next five years by 2023.

Young people who want to get a job or want to get help from POSCO as a prospective entrepreneur can take a closer look at the program chart below and apply now. Applications can be made through the website.

SOLUTION 2. Youth Hope Sharing — A Program That Benefits Both Job Seekers and Partner Companies

POSCO has been running the ‘Youth Hope Sharing’ program for 15 years. The program provides systematic training from basic and practical skills that are needed in the workplace to the mindset required for engineers. Since the training program is field-oriented, trainees learn directly from experts who have worked in the field for a long time, thus growing familiar with field terms and know-hows.

On completing the program, trainees are credited with job matching opportunities at POSCO partner companies, and the employment rate of trainees since 2005 stands at 95 percent. In 2019, out of 207 trainees, 167 (81%) succeeded in getting jobs at SMEs and partner companies.

As trainees enhance their skills within the two months training period and succeed in obtaining a job, it leads to the growth in the partner companies’ capabilities as well, thus creating a circulation structure.

l POSCO youth dream support continues in 2020

In response to the voices of the youth, POSCO promises to provide programs that will enable youth job seekers and prospective entrepreneurs to advance towards their dreams. POSCO believes that its endeavor to help resolve problems facing society will serve as a foundation for its role as a Corporate Citizen.

For outstanding participants of the ‘AI Big Data Academy,’ POSCO is offering an employment opportunity at POSCO and POSCO ICT. From the second half of the year, POSCO plans to provide job matching programs for those trainees who have completed the ‘Practical Corporate Employment Education’ and are interested in POSCO partner companies and suppliers. POSCO is supporting the many different dreams and visions of the youth through its various programs.

POSCO’s training program for youth job seekers and entrepreneurs was postponed earlier this year due to the COVID-19 issue, but starting from May, they have been resumed gradually. More details can be found on related websites.

In South Korea, there are different kinds of fish that people eat for every season. The reason that makes this possible is the geographical feature of the country. South Korea is a peninsula, meaning that the country is surrounded by the sea on three sides. Fish is caught all year round, with annual consumption of marine products reaching 58.4 kilograms per person as of 2017 — the highest in the world.

However, in contrast to this record, the amount of local fish catches have been decreasing. According to Statistics Korea, the annual production of marine products recorded 914,000 tons in 2019, down about 100,000 tons from 1,013,000 tons in 2018. The reason behind the disappearance of the formerly abundant fishery resources is the ‘Whitening’ phenomenon.

The whitening phenomenon, also known as sea desertification, is observed as marine algae living in the coastal rock beds disappear and are replaced with coralline algae. It is caused by multiple factors, including the following: rising sea temperature due to climate change, lack of nutrients (nitrogen, phosphorus, and silicon) in the seawater, and a decrease of iron components in the sea.

According to a study from FIRA (Korea Fisheries Resources Agency) in 2017, 61.7% of the costal rock bed in the East Sea was suffering from sea desertification. Every year, an astounding 12,970 hectares of rock beds are turning into sea deserts.

▲ Pink coralline algae replacing marine algae on the rock bed (left) and the rock bed transforming into a sea desert (right) (Source: FIRA)

The sea forest provides a basic food source for marine life and also a breeding ground for fish and shellfish. It acts as the foundation of the marine ecosystem by devising rich fishery resources and forming hideouts from predators. When these sea forests begin to disappear, shellfish, such as abalone, conch, and clam, cannot grow here. This result, in turn, is bound to pose a threat to the marine food chain.

SOLUTION POSCO’s Environmental Solution: Sea Forest Cultivation

From its very beginning, POSCO has placed importance on its social responsibility for the environment and has been pursuing various environmental activities accordingly. Since 2000, the company has been evaluating projects that can be of practical assistance to the marine ecosystem as well as local communities. The projects weren’t just about financial support. POSCO utilized what it does best — steelmaking. The ‘Sea Forest Cultivation’ project is one of them.

Triton: the artificial reef brand made with POSCO’s steel slag

The main purpose of the ‘Sea Forest Cultivation’ project is to restore areas damaged by the whitening phenomenon. With the help of POSCO-developed Triton reefs, these areas are transformed into sea forests with abundant marine algae.

Steel slag, a co-product of the steelmaking process, has high mineral content such as calcium and iron, that are useful for marine ecosystems than general aggregates. It also has a lower risk of being damaged from typhoons and tsunamis due to its high gravity and strength. There are three types of Triton reefs: A-type, T-type, and Steel-combined Triton. These Triton reefs have been approved by the Ministry of Oceans and Fisheries in 2014 and have been used for national sea forest cultivation projects since then.

POSCO’s artificial reef project dates back to 2000. RIST, a research institute of industrial science and technology affiliated with POSCO, and the National Institute of Fisheries Science came together and installed 179 Triton reefs in Jeollanamdo Province. In 2010, POSCO signed an MOU with the Ministry of Oceans and Fisheries to create sea forests and fishery resources. Since then, 6,559 Triton reefs were installed in total as of 2019.

The Triton sea forest, created in 30 locations in the Samcheok-Yeosu area, proves its excellent capability to restore the marine ecosystem and create fishery resources. In fact, investigation at the Triton sea forest in Yeosu revealed that compared to the surrounding general reefs, the Triton sea forest contained 1.9 times more marine life, 1.7 times more water, and 1.3 times more diverse algae.

▲ Various marine algae growing abundantly in the Triton sea forest in Yeosu.

On May 28, POSCO set off to create another sea forest to mark the National Ocean Day (May 31). The new sea forest, created with Triton reefs and Triton sea fertilizers, was installed in Ulleung Island, where the whitening phenomenon was at its peak. For the project, POSCO gathered opinions from the local community and decided to create the sea forest in the 17~20-meter-deep area off the coast of Namyangri. Starting from May 13, 100 A-type Triton reefs and 750 Triton blocks were installed for two days, and on May 28, a ceremony was held to celebrate the creation of a new sea forest amidst the presence of local government officials.

▲ POSCO installing Triton sea forest in Ulleung Island

The sea forest cultivation project is the first Corporate Citizen project of local cooperation to restore the marine ecosystem. The project is expected to expand the food resource for high value-added fish species and also help improve the income of local fishermen. POSCO and Ulleung Island will continue follow-up management — including research of water quality, supplemental planting of marine algae, and exterminating harmful organisms.

Triton Sea Forest can store “Blue Carbon”

Triton sea forest is capable of storing carbon dioxide due to the carbonation of steel slag — its main material — and the photosynthesis of marine algae through which the sea forest can store 10 to 20 tons of carbon dioxide annually per hectare. The carbon dioxide stored in the coastal and marine ecosystem is called “Blue Carbon”.

The marine ecosystem has up to 50 times more carbon absorption capacity than the terrestrial ecosystem. The reason why the Triton sea forest is considered as an effective means of blue carbon to prevent global warming lies here. However, since the marine ecosystem is less accessible and more difficult to understand than the terrestrial ecosystem, related studies have been insufficient. POSCO is to conduct scientific investigations on the effect of storing greenhouse gases in Triton sea forests.

Since January 2019, POSCO has been conducting joint research on blue carbon with POSTECH in Odo-ri, Pohang, where POSCO has created a sea forest with Triton reefs. Together, they measure the amount of carbon dioxide dissolved in seawater and analyze the dissolved organic carbon present in marine algae, sediments, and seawater.

▲ A CO₂ monitoring system being installed in the Triton sea forest of Odo-ri, Pohang, in 2016.

Triton reef is the perfect place to observe the blue carbon effect of sea forests because of its durability and ability to nurture a sea forest. The research conducted here is expected to lay the foundation for further studies regarding the effect of storing greenhouse gases in sea forests. POSCO will not stop here, but move on to seek ways to help the steel industry adapt to climate change in the marine sector. As a measure, the company will cooperate with Nippon Steel (Japanese steelmaker) on the blue carbon subject.

‘Building a Better Future Together’ is what POSCO wishes to achieve through the sea forest cultivation project. POSCO will continue on its journey to becoming a global sustainable company, advancing past its title of leading global steelmaker.

ISSUE Manufacturing Industry: the backbone of Korean economy. But its SMEs are facing significant challenges.

The United Nations Industrial Development Organization (UNIDO) announces the countries’ ranking of manufacturing competitiveness every year. The Republic of Korea entered 17th in 1990 and made it to the Top 10 in 2003. In 2017, it ranked 4th. It took Korea just 28 years to jump from 17th to 4th — a truly remarkable leap forward. The products of the manufacturing industry make up 90 percent of total exports, and domestic jobs created by the industry add up to over 4.5 million. As of 2017, the GDP portion of the nation’s manufacturing industry stands at 30.4 percent — higher than that of China (29.3 percent). In this respect, it is evident that the manufacturing industry has played a significant role in the rapid growth of Korean economy.

However, Korea’s manufacturing industry is said to be facing huge challenges. The business in the manufacturing industry — including steel, shipbuilding, and automotive — have reached the maturity stage, and are struggling against fierce competition amid overcapacity in the global market. Besides, There has been an increasing number of issues regarding the ecosystem of the manufacturing industry in recent years, such as promoting balanced growth between large companies and SMEs. The industry is being flooded with new technologies of the Fourth Industrial Revolution — such as Big Data, the Internet of Things (IoT), and Artificial Intelligence. There are concerns that these technologies might widen the disparity between large companies and SMEs. Eventually, the gap in knowledge, information, and technology could lead to economic polarization.

According to OECD statistics, Korea is one of the countries with the largest productivity gap between large companies and SMEs. The labor productivity of SMEs relative to large companies recorded 53.8 percent in 1988 but fell to 32.5 percent in 2014. On the scale of R&D expenditures, the gap between the two gradually widened over time as well. These gaps led to a huge difference in business performance, which in turn resulted in the disparity of labor, resources, and R&D investment capacity. This kind of repeated cycle is fatal to the industrial ecosystem vulnerable to its instability.

POSCO has an important role here. The World Economic Forum announced POSCO as a ‘Lighthouse Factory’ for pioneering the manufacturing industry by applying core technologies of the Fourth Industrial Revolution. There are 44 lighthouse factories around the world and POSCO is the first and only Korean company on the list.

So, POSCO came up with a solution: establishing and pursuing shared growth programs that enable SMEs to become smart together. Since POSCO has the competitiveness that transforms the huge steelworks into a lighthouse factory, the company is stepping forward, more than willingly, to share its competitiveness with SMEs in a bid to strengthen the industrial ecosystem.

SOLUTION A POSCO-type Shared Growth

At POSCO, the term ‘Shared Growth’ isn’t a new concept. The company started its first Shared Growth activities in the late 1990s. In 2005, POSCO established an organization dedicated to the purpose and currently operates a total of 33 Shared Growth programs. The “Benefit Sharing” system, which is run by the government and participated by 472 companies nationwide, is known to be first launched by POSCO in 2004.

Among the many Shared Growth programs, POSCO focalizes on the POSCO-type Productivity Innovation as an effort to bridge the gap between large companies and SMEs.

The ‘POSCO-type Productivity Innovation’ program is an activity to transfer QSS (Quick Six Sigma), a POSCO’s own manufacturing innovation technique, and smart factory technology successfully built by POSCO. To facilitate it, POSCO is to contribute 20 billion KRW over five years and the government adds 10 billion KRW to run the program. So far, POSCO-type Productivity Innovation activities look similar to those of other companies.

However, delving into the details of the program, you might find something interesting — the program consists of two steps. The first step is ‘smartization consulting to enhance competence,’ and the second is ‘support service to build a smart factory’. Those two approaches might seem quite similar at first glance, but there is a reason why POSCO operates the program in this way. POSCO strives hard to teach how to fish rather than just give the fish itself.

Let’s say that building a smart factory is like making smart fishing spots and fishing gears. Good tools and fisheries are important, but before that, the fishers also need training. In the manufacturing industry, the importance of the workforce is paramount, so a smart factory can be completed only when the workforce becomes smart as well. For companies that need this fundamental change in structure, step 1 (smartization consulting) is implemented instead of building the smart factory straight away. POSCO carries out step 2 (support service to build a smart factory) for those companies that have already gone through innovation and are expected to create synergy with the build of a smart factory. The competitiveness and productivity innovation that POSCO would like to share lies here: a people-centered smart factory.

 SOLUTION STEP 1  Smartization Consulting to Enhance Competence

‘Smartization consulting to enhance competence’ is an improved version of POSCO’s QSS Innovation activities that had been carried on from 2013 to 2018. QSS Innovation is an industrial movement to improve the productivity of the manufacturing workplace. ‘Smartization consulting’ also uses the QSS as a consulting tool, but this activity concentrates on changing the SMEs’ fundamental structure and lay the foundation for smartization prior to build a smart factory. Thus, the project not only enables innovation in productivity but also help detect areas that require a smart factory. As of 2019, POSCO had carried out consulting projects in 108 companies and plans to expand to 110 companies in 2020.

 SOLUTION STEP 2  Support Service to Build a Smart Factory

In the second step of the program, POSCO Group specialists help build a smart system that is suitable for the company. At this point, the surrounding environment and the scale of the company are taken into consideration. The provided services include monitoring facilities, MES, and ERP, etc. A customized system — according to the SMEs’ smartization level — is proposed and built, with POSCO and the government each bearing 30% of total expenses. If the project cost is less than 20 million KRW, the total amount is borne by the POSCO and the government — without the burden of SMEs.

In most ‘smart factory building support’ provided by large companies, the support ends with just installing the system. But POSCO’s support can be differentiated since it reshapes the mind-set of the workforce in step 1, and then builds the smart factory in step 2. It is an ideal program, not just for establishing smart facilities but also for nurturing an intelligent workforce as well. Though there are some cases where the first and second steps of the program are conducted independently, POSCO plans to maximize synergies by implementing both steps as an integrated program. POSCO provided supports for 110 companies last year, and 120 companies will be supported this year. Targets include POSCO suppliers, partner and client companies, POSCO Group suppliers, and also companies that have no business transactions with POSCO.

“Shouldn’t our company be of a certain scale to get consulting from POSCO?” The answer is no. For the smaller SMEs, POSCO plans to introduce “Mini QSS” initiating this year. POSCO is to carry out consulting for smaller companies as well so that these companies can easily start innovative activities that are essential for growth.

※ Solution Case Study

ISSUE The Unbearable ‘Hyperconnectivity’ of Being

With the COVID-19 crisis, a close connection was observed among all the existing components in our lives including the state, society, economy, and industry.

“Hyper-Connected Society,” is not just a term describing phenomena in the cyber world. It is applied to the actual reality we live in, which in turn makes us realize that it takes more than a single person to make a safer and better world.

The defense strategy to fight against the virus in the hyperconnected era is “Untact” and “Social Distancing” that have to do with cutting up the existing connection. Ironically, the power to overcome this situation is ‘staying together.’ How do the two go together? The trick lies here — social solidarity. It’s about the members of society, including the state and local government, quarantine task force, medical professionals, as well as citizens and corporations, to work together in their respective roles and join forces.

At present, Korean society has witnessed multiple cases of this social solidarity: Medical volunteers; Corporates, and citizens donating relief goods or funds for medical staff and quarantine task force; Volunteers making face masks; And companies providing staff training facilities for patient treatment.

Although COVID-19 is all over the news and the media, the virus isn’t the only concern confronting our society today. Youth unemployment, economic inequality, and problems associated with socially vulnerable groups including the elderly, disabled, and multicultural families are some of the many long-standing issues.

Corporates are indeed playing their parts respectively, facing these challenges. By utilizing accumulated assets, capabilities, and their businesses, they help in resolving social problems and overcoming crises. In turn, society acknowledges and credits these companies. This exchange creates a solid ring that enables both corporates and society to coexist in harmony.

The true value of business activity is mainly presented in two ways: 1) Meeting the needs of society businesswise, and 2) Demonstrating its ability to cope with the challenges of given times. In fact, these are apparent in numerous cases with leading companies around the world.

What about POSCO? POSCO had announced itself as “Corporate Citizen,” and committed to participate in solving social problems and contribute to creating a better world. So what actions have POSCO taken?

Solution POSCO 1% Sharing: 99% POSCO Employees Donating 1% of Monthly Pay

Empathy and sympathy. These two qualities would be the first thing that comes to mind when confronting the weak sides of society. To help someone going through a difficult time, one must be able to step into the shoes of that person and truly relate to the problems.

POSCO has been striving hard to resolve social issues for a long time. Currently, the company has taken up the slogan ‘With POSCO,’ which exhibits its empathy and sympathy towards society. Along with several other programs, POSCO is implementing a unique program to put this mission into practice — 1% Sharing.

POSCO’s 1% Sharing is aided by funds donated — 1% of the monthly pay — by employees and is used for the benefits of society. The donation is voluntary and automatically deducted from the salary. 98.5% of POSCO employees are taking part willingly, with pride that they are contributing to making a difference in society. 1% is a small amount, but when it adds up, it becomes huge. In 2019, the annual donation collected reached approximately 9 billion KRW.

Giving Activities: Started by General Managers & Executives and Continued by the Labor-Management Committee

In 2011, POSCO’s 1% Sharing commenced with general managers and executives donating 1% of their salaries. Two years later, as of February 2013, the Labor-Management Committee (LMC) took over and actively launched the 1% Love Campaign. As more and more employees sympathized with the purpose, they began to participate which led to an expansion in the scale of the fund. In November 2013, POSCO established the ‘POSCO 1% Foundation’ as a measure to manage the fund in a more meaningful way. Adding on to support the 1% Sharing, the company went on to match employee donations with a one-to-one matching grant.

In its first year, the 1% Foundation raised 4 billion KRW in donations and since then, it has been focusing on activities to support the underprivileged groups of the community. As the end of 2019, the foundation has grown into a representative foundation with 98.5% POSCO employees participating and funds reaching 9.3 billion KRW.

The case of the 1% Foundation is the first and only example in Korea. There’s no other corporate that runs a social-giving foundation and supports it with matching donations of employees — reaching up to 98.5% of total employees. In fact, it seems like a rare case globally as well.

The 1% Foundation is growing even larger as 26 group companies and 88 partner companies joined in. At the end of last year, the number of donors reported a record-high 34,000.

Trust Issues? No problem. Real Employee Donors in Charge of Program Suggestion And Execution!

Statistics show that Korea isn’t a forerunner when it comes to donations. According to the 2018 World Giving Index published by the CAF, Korea ranked 60 among 146 survey countries — the 21st among the 36 OECD countries. This ranking is considerably low compared to the level of Korea’s GDP.

In November 2019, Statistics Korea released a survey result that shows a decrease in the proportion of those who have donated in the past year or are willing to donate in the future. The percentage of respondents who have donated in the past year was 25.6% — down 10.8 percentage point from 2011 (36.4%). When asked for the reason of not donating, “Not enough financial resources” recorded 51.9%, lower than 2017 (57.3%). However, “Lack of trust in charity organizations” indicated an increase of 6 percentage point compared to 2017 (8.9% → 14.9%). This shows that the credibility and transparency of charity organizations do affect donations.

The main driving force of the POSCO 1% Foundation is the donors. The donors actively participate in the planning, executing, and evaluation of the entire giving programs. The Fund Management Committee, consisting of donor and staff representatives, evaluates each program implemented by the Foundation. The execution of actual programs is carried on by the Foundation Bureau, which is composed of 150 employee donors of Pohang, Gwangyang, and Seoul. The Foundation Bureau is in charge of the following: selecting beneficiaries, monitoring each project, and reporting on the 1% Sharing to employee donors.

The project areas of POSCO 1% Foundation are determined according to the results of employee surveys. Since most employees have donated in the hope of supporting those in difficult situations, all projects of the POSCO 1% Foundation aim to educate the underprivileged and help build their self-sufficiency.

Many donors also participate in the operating process of the projects. POSCO 1% Foundation has succeeded in narrowing the gap with donors by promoting projects that encourage the self-directed contribution of employees. ‘Change My Town’ — a project that was proposed and directly executed by donors — is a good example with completed tasks reaching up to 49 as of last year. The following are some of the main programs of the project: 1) Ideas to eliminate blind spots in neighborhoods, 2) Funding a special summer vacation for those unable to afford a vacation, 3) Providing books, and 4) Relief activities at typhoon struck areas.

The projects are mainly focused on resolving issues of the communities directly related to the donors. The reason for this is based on POSCO’s idea: Help and support must start from its local community, expand into other regions, and at last further advance into other countries as well.

While supplying funds to beneficiaries, POSCO employee donors provide mentoring and encouragement throughout the program as well. The beneficiaries of the foundation say that they truly appreciate the warmth of the 35,000 employees — more than the donated fund itself. The key point of the 1% Foundation could be considered this: the sincerity of the participating employee donors.

Transparent Management — Not Even a Penny into ‘Company PR’

One of the distinguishable features of POSCO 1% Foundation is its transparent management. Each quarter, a report of each project — including every detail of how the fund was used — is published through EP(Enterprise Portal). The foundation operates its website and runs a separate online system integrated with EP where POSCO employees can participate in donations or apply other changes in real-time. The transparent management cultivated credibility in the foundation and was followed by special donations, that include employees’ prize bonuses and other external profits. In 2019, the number of special donations totaled 512 cases.

POSCO CEO Jeong-Woo, Choi, also contributed to the 98.5% of employee participation. He clearly stated that although POSCO 1% Foundation is operated with donations from POSCO employees, it is to be run as a separate non-profit foundation. Choi made sure that none of the funds at POSCO 1% Foundation was used for corporate PR activities.

The participants of the 1% Sharing testify how happy they are to be a part. Though 1% might be a small amount, the expectations are very high as it may shine a light in the shadows of many. It is said that dewdrops gathered together can form a great ocean. POSCO Newsroom believes that the 1% Sharing of POSCO will continue to flow into the lives of people in need.