Will the Promotion of Non-Face-to-Face Companies Begin in Earnest?…Minister of SMEs Expresses Determination to Enact Law

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Minister Kwon Chil-seung of the Ministry of SMEs and Startups visited Hanmin Market located in Seo-gu, Daejeon on the 8th and demonstrated an online shopping system using a private platform through digital signage installed at the entrance.
[Photo by Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] Attention is focused on whether the non-face-to-face economy will accelerate in the small and medium venture business sector due to the COVID-19 crisis. This is because Kwon Chil-seung, the recently appointed Minister of SMEs and Startups, expressed his intention to enact the Non-Face-to-Face Small and Medium Venture Business Promotion Act. This law involves the government establishing a foundation for fostering non-face-to-face small and medium venture businesses and providing various support measures such as tax benefits.

In his opening remarks at the confirmation hearing held on the 3rd, Minister Kwon stated, "Through the enactment of the Non-Face-to-Face Small and Medium Venture Business Promotion Act, we will systematically foster small and medium venture businesses in the non-face-to-face sector," adding, "We will expand venture investment based on the Smart Korea Fund and open an era of 2 trillion won in SME R&D."

After his inauguration, Minister Kwon also visited small business sites preparing for the non-face-to-face economy and emphasized the necessity of online and digital transformation.

Before the Lunar New Year holiday on the 8th, he visited Hanmin Market located in Seo-gu, Daejeon, and demonstrated the 'Online Shopping' system installed at the market entrance. The online shopping system is a service that allows traditional markets to deliver to nearby residential areas and nationwide via courier, similar to large supermarkets, through online channels.

This system is a project promoted by the Ministry of SMEs and Startups aiming to establish it in 500 markets by 2025. As of January this year, it has been implemented in over 130 traditional markets nationwide, including Hanmin Market. Minister Kwon said, "It is essential for traditional markets to prepare for the non-face-to-face economy in the post-COVID era," adding, "The government will strengthen support for online and digital transformation along with hardware foundations such as facility modernization."

[Image source=Yonhap News]

The Non-Face-to-Face Small and Medium Venture Business Promotion Act was primarily proposed by Jeong Tae-ho, a member of the Democratic Party of Korea, in August last year. Amid the global shift to a non-face-to-face economic model due to COVID-19, the bill was prepared with the purpose of systematically fostering domestic non-face-to-face small and medium venture businesses to enhance competitiveness. The government needs to promote the growth of domestic companies, support overseas expansion, and increase job creation effects. However, there are limitations as the ministries and public institutions supporting non-face-to-face small and medium venture businesses are scattered across multiple agencies, and there is no control tower to oversee corporate development policies.

The bill includes definitions of terms such as non-face-to-face business and non-face-to-face small and medium venture businesses and establishes a comprehensive promotion system covering the entire non-face-to-face ecosystem. The Minister of SMEs and Startups will establish and implement a basic promotion plan every three years and form a dedicated committee to review promotion plans, systems, and support details. The Ministry will support the introduction of non-face-to-face businesses for small business owners and traditional markets while assisting SMEs with non-face-to-face research and development (R&D). It will also provide necessary tax support to enhance corporate competitiveness.

Once this law is passed, the Ministry of SMEs and Startups will promote projects to increase the purchase of products or services produced by non-face-to-face companies and conduct projects to secure specialized personnel in artificial intelligence and big data fields. Promising companies will be selected as 'Leading Non-Face-to-Face Small and Medium Venture Businesses' and will receive administrative, technical, and financial support to promote growth. If a local government head plans to newly establish or strengthen regulations, and it is judged that this may impose excessive burdens on non-face-to-face companies, a plan will be prepared to exempt such companies from regulation application for five years.

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