[2021 Budget] Ministry of SMEs 17.3 Trillion Won... "Focus on Non-Face-to-Face and Digitalization"

Ministry of SMEs and Startups
29.8% Increase Compared to This Year
Focus on Becoming a Global Digital Powerhouse

2021 Budget Proposal of the Ministry of SMEs and Startups (Image=Ministry of SMEs and Startups)

[Asia Economy Reporter Kim Daeseop] The Ministry of SMEs and Startups announced on the 1st that it plans to prepare the 2021 budget at 17.3493 trillion KRW and submit it to the National Assembly. The budget for next year increased by 3.9853 trillion KRW (29.8%) compared to this year's main budget of 13.364 trillion KRW. It was organized with a focus on the digitalization of small business owners and SMEs and venture companies in the non-face-to-face (untact) era to leap forward as a global digital powerhouse.

In particular, five key focus areas are ▲ Transition to a digital economy 'Smart Korea' ▲ Fostering the 'Untact' sector turning crisis into innovation ▲ Revitalizing local economy 'Neighborhood Commercial District Vitality' ▲ Expanding and globalizing the national representative 'Brand K' ▲ Strengthening 'Policy Finance' as a social safety net.

The Ministry of SMEs and Startups prepared the Smart Korea budget for next year, aimed at transitioning to a digital economy, at 2.1679 trillion KRW, an increase of 319 billion KRW (17.3%) from this year's 1.8489 trillion KRW. First, the smart factory dissemination project will be transformed into a phased support system of 'dissemination - advancement - utilization - aftercare.'

It will not only accumulate and analyze manufacturing data generated from smart factories but also utilize it to develop smart factory solutions. Additionally, to bridge the digital gap between small business owners and large retailers, AI-based commercial district information systems, online sales channel entry education, and consulting will be supported intensively.

To focus on fostering the untact sector next year, a budget of 1.8115 trillion KRW will also be invested. This is an increase of 459.7 billion KRW (34.0%) compared to this year's budget of 1.3518 trillion KRW. To revitalize venture investment in startups and venture companies in the untact sector, the mother fund's contribution budget will be expanded.

The Smart Korea Fund, which is already being raised at a scale of 1 trillion KRW this year, will receive an additional 400 billion KRW contribution next year to maintain the same scale. Furthermore, a non-face-to-face service voucher platform for telecommuting, video conferencing, etc., will be created and supplied to 160,000 companies by 2021 at about 4 million KRW per company.

Minister Park Young-sun of the Ministry of SMEs and Startups is explaining the 2021 budget plan through an e-briefing held at the Government Seoul Office.

The budget for revitalizing the local economy and neighborhood commercial districts next year was prepared at 1.0557 trillion KRW, an increase of 128.4 billion KRW (13.8%) compared to this year's 927.3 billion KRW. The Ministry plans to invest 270.3 billion KRW to expand and globalize Brand K. It will enhance Brand K's recognition by expanding Brand K overseas application projects, domestic and international flagship stores (2 locations), and other Brand K development and management projects.

Also, the budget for strengthening policy finance next year was prepared at 10.9115 trillion KRW, an increase of 3.0929 trillion KRW (39.6%) compared to this year's 7.8186 trillion KRW.

This year, the Ministry of SMEs and Startups supported small business owners affected by COVID-19 with policy funds amounting to 3 trillion KRW. A total of 132,000 cases of policy funds were provided as loans.

The Ministry plans to develop and operate its own credit evaluation models, including sector-specific evaluation models reflecting the diverse characteristics of small business owners and utilizing non-financial information. It will also strengthen risk management through early warning issuance and normalization plans for companies with declining credit ratings based on regular surveys.

In October this year, a Small Business Research Center will be established within the Small Enterprise and Market Service and operated on a pilot basis. The Small Business Research Center will be located near the national research complex in Sejong City and will conduct research on smartization of small business owners, innovation plans for education and consulting projects for small business owners in the era of the 4th Industrial Revolution, with 12 doctoral-level researchers.

The Ministry of SMEs and Startups aggressively pursued budget expenditure restructuring from the budget request stage with the Ministry of Economy and Finance, including adjustments for duplication, cuts and abolishment of habitual subsidy projects, and reductions in projects with poor actual execution rates.

In the situation where the non-face-to-face and digitalization of the economic structure is accelerating due to the resurgence of COVID-19, the Ministry plans to support proactive and comprehensive policy responses through the preparation of next year's budget.

Minister Park Young-sun of the Ministry of SMEs and Startups said, "We plan to do our best to support our startup and venture companies to grow into global platform companies like Zoom and Facebook that the world pays attention to, and to establish Korea as one of the 'Top 4 Venture Powerhouses'."

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