On March 3, POSCO’s Pohang Clean Ocean Volunteer Group received the Presidential Commendation at the National Recommendation Award, which is selected by the Ministry of the Interior and Safety. The award is handed out following recommendations from the people. Surprisingly, one citizen of Pohang recommended Pohang Clean Ocean Volunteer Group for the prize.

POSCO Works shares a special relationship with the ocean because POSCO must import raw materials and transport products through the ocean. Due to this factor, club activities to enjoy scuba diving and explore the ocean are especially active at POSCO. And in 2009, the POSCO club members gathered their talents to go beyond their hobbies and formed the “POSCO Clean Ocean Volunteer Group” to protect the clean ocean.

POSCO Newsroom sat down with some members of the POSCO Clean Ocean Volunteer Group to hear about their activities which include collecting ocean wastes and starfish in nearby oceans..

Q. Founding member Jong-Bin Park tells us the first story of how the Clean Ocean Volunteer began.

“I am a founding member of the Clean Ocean Volunteer Group and currently serve as an advisor. Our first dive to protect the ocean began in November 2009. The mission was to purify underwater and collect waste onshore. There were many clubs centered on scuba diving in Pohang Works, and at that time, I belonged to one of these clubs called the Marine Volunteer Group. Before the “Clean Ocean Volunteer Group” was established, our club began activities to remove starfish at the abalone farm in Pohang in 2001. These activities triggered the launch of “POSCO Clean Ocean Volunteer Group,” which was founded by integrating the scuba diving clubs active in Pohang Works.”

Q. Then let’s listen to what the underwater scenery looks like from the Captain who is leading the Clean Ocean Volunteer Group.

“What comes to your mind when you imagine the underwater of a wide blue ocean? Is it beautiful scenery with various fish swimming along the colorful coral reefs? Of course, the ocean is beautiful. However, there is also another underwater scenery of various garbage, such as plastic and waste nets, that is destroying the beautiful marine ecosystem. Environmental hormones from plastic destroy the marine ecosystem, and waste nets affect the reduction of fish stocks and cause safety accidents of ships or underwater recreational activities. Also, waste wood disturbs ship operations and causes damage to sea farms, and starfish cause trouble to the local fishing community since they feed on other fish. Therefore, the fishing community says that they are grateful for the garbage collecting starfish capturing activities of the Clean Ocean Volunteer Group.”

Q. So, the Clean Ocean Volunteer Group is not something anyone can do?

“Even if you are afraid of dark and deep waters, and you don’t have a scuba diving license, you don’t have to worry about it when signing up! We have a “pre-register, post-license” system! Joining the volunteer group doesn’t require any conditions, and you can easily obtain a license because experienced seniors help you. In addition, external instructors are invited regularly to conduct various diver training, such as underwater, lifesaving, safety, and equipment training. You can participate in volunteer activities, keep a hobby, and become healthier, all at once!”

Q. Then, are there many beginners in the Clean Ocean Volunteer Group?

“I joined the Clean Ocean Volunteer Group when I started learning scuba diving in June 2020. At first, I was worried about whether I would do well, but since I was working with a “buddy,” a partner who dives in with beginners, I wasn’t scared at all. My current buddy is Scuba Diving Master Young-Seok Cho, and I’ve been partnering with him since I first learned to dive, so we’re really great partners. The “Buddy System,” which means to work in pairs, is great because it can keep each person safe in emergencies, such as equipment abnormalities and health problems, as well as pick up trash that is difficult to do alone during marine volunteer activities.”

Q. What is your goal this year?

“Clean Ocean volunteer activities are held every Saturday, but at times they are canceled due to bad weather. Also, because I work in shifts, it is difficult to participate every week, so I lack experience. This year, I would like to dive and volunteer more, so I can go beyond the open water diving certification and attain an advanced one.”

Q. Do you have anyone in your family participating with you?

“I started marine volunteer work in June 2011, and my younger son joined me as an onshore team of the Clean Ocean Volunteer Group in March 2017, since he had to fill volunteer hours at his high school. Then, in May last year, he started underwater activities with scuba diving equipment. The rest of my family, including my wife and my eldest son, are also participating in the Clean Ocean Volunteer Group as onshore team members. My eldest son, who is currently serving in the Marine Corps, is also planning to participate in underwater activities after being discharged, so I am looking forward to the day that I can participate in underwater volunteering together with both my sons.”

Q. How did you come to join the Clean Ocean Volunteer Group with your father?

“When I was young, I went to the sea with my father and found several large birds dying on the shore. I saw a lot of trash around the dead birds, and I thought that the reason so many birds died is that they ate those garbage. I remember that while collecting the trash with my father, I told him that we shouldn’t throw away garbage here in the future so that the birds do not die.”

Q. They say that group companies are also participating?

“I am a member of the Clean Ocean Volunteer Group representing POSCO C&C. Even if it wasn’t for volunteering, I used to go on domestic and international dive tours with my wife whenever we had time. Since we both love scuba diving, all activities were fun and energetic for me and rather soothing. Now, I am taking a break because I have to care for my child, but I think my volunteering was more meaningful because my wife, who is more passionate about diving than me, was with me. The challenging thing for me at this point is that I can’t participate in volunteer activities because I’m currently nurturing a 9-month-old diver-to-be.”

Q. I heard that you were mistaken for thieves at the beginning of your activities.

“Now, when you go out for marine volunteering, you must report the number of people on board to the coast guard, but it was not compulsory at the beginning of the Clean Ocean Volunteer Group activities. So, if we carried out activities on boats that were not reported, the coast guard would come and check.”

Q. What have you got to say as the captain?

“I am so grateful to our members who have participated in volunteering on holidays, even taking leaves, and I ask you to volunteer safely. Also, I would like to express my gratitude for the sacrifice and service of our members. They have made it possible to pass on the ‘healthy & clean ocean’ to our descendants.”

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.

While complying with the government policies related to COVID-19, the 2020 POSCO Global Good Citizenship Week was held for nine days from June 19 to 27. All volunteers of the POSCO group took part in various untact volunteer activities utilizing their talents and skills. Since the launch of the skill-based volunteering group in 2013, POSCO currently has a total of 77 skill-based volunteering groups.

Check out the video below to see POSCO volunteers in action! (Korean)

On May 28, POSCO launched a sea forest cultivation program in Ulleung Island to mark the National Ocean Day (May 31).

Earlier in the month, POSCO installed 100 Tritons* and 750 Triton blocks underwater and fostered a sea forest reaching 0.4ha in Ulleung Island. The installed Tritons have been acknowledged as artificial reefs by the Ministry of Oceans and Fisheries. The 100 Tritons were placed on the edge of the sea forest to facilitate the growth of marine algae while 750 Triton blocks were stacked up in the center, serving as a habitat and breeding ground for fish.

* Triton: The name Triton is taken after the god of the sea in Greek mythology. It is an artificial reef brand made with POSCO’s steel slag. The materials used to make Triton has proven to be safe for the environment as well as for marine life.

About 20 attendants were present at the event, including Ulleung Island Governor Byung-Soo Kim, fishermen of Ulleung Island, President of POSCO In-Hwa Chang, and RIST President Seong Yu. They inspected the sea forest site where the artificial reefs were installed.

In 2000, POSCO, together with RIST, developed an artificial reef Triton made with steel slag, a co-product of the steelmaking process. The company provided steel slags that amount to a total of 6559 Tritons free of charge. The Tritons were placed in 30 different sea forests in South Korea. In this case of Ulleung Island, POSCO not only provided the steel slag but also participated directly from the production to the installation stage.

Steel slag, the main material of Triton, has high mineral content such as calcium and iron, which are useful for marine ecosystems than general aggregates. Not only can the Triton facilitate the growth of marine algae, but it can also promote photosynthesis, thus restoring the marine ecosystem and diversifying coastal organisms as well. Also, the Triton reef can withstand typhoons and tsunamis due to its high gravity and strength and is highly resistant to seawater corrosion.

POSCO is focusing on the Triton sea forest cultivation project as one of the major Corporate Citizenship activities. The project is expected to restore the marine ecosystem and has a Blue Carbon effect since it absorbs and stores CO₂ underwater. RIST and other related organizations have revealed that sea forests are capable of storing 3 to 16 tons of carbon dioxide annually per hectare.

Ulleung Island Governor Byung-Soo Kim said, “We are glad that POSCO has stepped in to help resolve the issues of the marine ecosystem here in Ulleung Island.“ President of POSCO In-Hwa Chang explained that POSCO, as a Corporate Citizen, will actively take part in contributing to the local community with POSCO’s technology.

POSCO explored different underwater sites around Ulleung Island since December last year and selected the best location to cultivate a sea forest. In April, the company conducted a thorough investigation to understand the existing biological habitat. And finally, this month, POSCO transported the Triton to Ulleung Island and installed them underwater. POSCO and Ulleung Island will continue follow-up management — including research of water quality, supplemental planting of marine algae, and exterminating harmful organisms.

POSCO plans to develop sustainable sea fertilizer and a new type of artificial reef using steel slag. These developments are expected to contribute to restoring the marine ecosystem and also help improve the income of local fishermen.

■ The cultivation process of the Triton sea forest

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.

Last month, POSCO America received a phone call from the Charlie Norwood VA Medical Center (Fisher House) located in Augusta, Georgia.

On hearing this unfortunate news, POSCO America proposed an ‘Untact Solution’ — a support system that enables elderly patients to connect and communicate with their families via video. On March 26, The company visited the Fisher House and donated eight devices for the purpose.

▲ A veteran at the VA Medical Center in Georgia, is on a video call with his family.

“It was really emotional to watch the veterans and their families well up in tears as they saw each other on the video calling device. We truly wish that these difficult times end soon,” said a POSCO America official.

An official at the Fisher House expressed thanks to POSCO America for implementing the ‘With POSCO’ spirit and presenting the veterans and their families with an irreplaceable gift — true happiness.

A part of the 1% Sharing* Fund — a fund voluntarily participated by employees — was used in the donation of the devices. This year marks the 70th anniversary of the Korean War and POSCO America plans to continue its support for veterans of the Korean War, including the presentation of appreciation plaques.

*1% Sharing: POSCO employees voluntarily donate 1% of their salary for social contribution activities. As of present, 99% of POSCO employees are participating.

On February 19, POSCO-Mexico held the inauguration ceremony of POSCO Hope Center (CENTRO DE ESPERANZA POSCO AMIGOS) in Altamira, Tamaulipas, Mexico. The center is to support the independence of low-income underprivileged people in the community.

An approximate 100 people attended the ceremony, including the Chairman of the state civic group, the State Minister of Economy, the Mayor of Altamira, the President of POSCO-Mexico Byung-Hwi Kim, the President of POSCO-MPPC Tae-Hyun Yoon, and the civic groups and local residents.

▲ The ribbon cutting of POSCO Hope Center

POSCO Hope Center has been constructed by POSCO-Mexico to support the livelihood of Altamira citizens. The site was provided by the Altamira City Government, and the state and civil organizations will be in charge of the program operating within the center.

Until present, there was a lack of systematic support programs for the underprivileged — including single mothers and the disabled — in Altamira. Through POSCO Hope Center, POSCO-Mexico plans to support residents to acquire professional skills for their living, such as baking and beauty.

“Companies such as POSCO-Mexico are outstanding examples not just in Tamaulipas but in Mexico as a whole. Altamira citizens will be able to benefit from POSCO Hope Center established by POSCO-Mexico. I express my gratitude and sincere congratulations to POSCO,” said Gonzalo Alemán Migliolo, State Minister of Economy.

POSCO Hope Center is a two-story building with a total floor area of about 1322m². The first floor has a playroom for children and space for practical training. The computer rooms and classrooms are located on the second floor. The outdoor space is to be used as a play area and shelter for the children of the trainees.

▲ POSCO Hope Center located in Altamira, Mexico

The steady community contribution activities of POSCO AMIGOS (POS-AMI: POSCO-Mexico’s volunteer corps) laid the foundation in the establishment of the POSCO Hope Center.

POSCO AMIGOS — its name meaning ‘POSCO friends’ in Spanish — has been engaging in various talent sharing, and donation activities to resolve issues of the local community since its founding in 2012. Making a beautiful school, improving the environment of the national kindergarten, donating wheelchairs to nursing homes, and making donation boxes are some of the activities of POS-AMI.

In September last year, the heartwarming story of an employee was introduced on Televisa, a Mexican national broadcaster. The employee’s daughter, who was suffering from acute pneumonia, was able to get treatment through the voluntary 1% salary sharing of other employees. This story was broadcasted along with POS-AMI’s other social contribution activities.

▲ POSCO AMIGOS (POS-AMI) story was introduced on a Mexican national broadcaster.

With the establishment of the POSCO Hope Center POS-AMI will voluntarily participate in various talent sharing activities, such as baking, handcrafts, English, and computers. The ultimate plan is to become a global model citizen by practicing POSCO’s management philosophy, “Corporate Citizen.”

Byung-Hwi Kim, President of POSCO-Mexico, said, “We hope that many trainees will be able to live independently and enjoy a better life with the help of the POSCO Hope Center. POSCO-Mexico will work on the mutual growth of both the company and the local community.”