67% of SMEs Say "Revitalizing the Domestic Market" Is the Most Important Policy This Year

Survey on the Management Environment of Small and Medium Enterprises and 2020 Business Plans by the Korea Federation of SMEs

[Asia Economy Reporter Moon Hyewon] Small and medium-sized enterprises (SMEs) identified the policy of ‘revitalizing the domestic market’ as the most important policy to focus on this year to improve the management environment for SMEs.

On the 7th, the Korea Federation of SMEs announced the results of the ‘SME Management Environment and 2020 Management Plan Survey’ conducted on 300 SMEs, revealing that 67.0% of SMEs responded this way.

Other policies followed, including ‘establishing labor hour flexibility’ (37.3%) and ‘supporting sales channels such as SME export revitalization’ (35.0%). This is interpreted as a need for comprehensive policy support across domestic demand, exports, and the labor market.

Regarding this year’s management environment outlook, more than half (57.0%) of companies judged it to be similar to last year. However, 33.7% of companies believed it would ‘worsen,’ which was more than the 9.3% who thought it would ‘improve.’

Among the causes of deterioration, domestic reasons most mentioned were ‘continued sluggish domestic demand’ (77.2%), and external reasons were ‘global economic growth slowdown’ (54.5%).

Meanwhile, SMEs responded that their core management strategies for this year are ‘discovering new clients and new sales channels’ (59.7%), along with ‘stable securing of operating funds’ (36.0%) and ‘strengthening risk management in preparation for worsening management conditions’ (34.3%). This is interpreted as showing a willingness to expand business despite management difficulties.

The external factors expected to have the greatest impact on management this year (multiple responses allowed) were ▲ overall economic sentiment recovery (55.7%) ▲ market conditions of core businesses (46.3%) ▲ changes in business conditions of parent companies and clients (28.0%) ▲ government economic policy direction (28.0%), in that order.

Kim Gi-moon, Chairman of the Korea Federation of SMEs, said, “Although unstable external economic conditions, rapid changes in labor environment, and prolonged sluggish domestic demand are unlikely to improve easily, some policy changes such as the reduced increase in minimum wage and the grace period for shortened working hours are factors that can be expected to improve the business environment for companies. We will actively promote various policy proposals to help restore economic vitality for SMEs and small business owners.”

This content was produced with the assistance of AI translation services.