OECD: "Over 100 Support Programs for Korean SMEs... Need for Reassessment and Simplification"

Romina Boarini, Director of the OECD WISE Center
17th 'KDI 50th Anniversary International Conference'

[Asia Economy Reporter Eunbyeol Kim] There have been calls to review whether South Korea's support system for small and medium-sized enterprises (SMEs) is operating efficiently and to simplify the complex support framework in order to provide proper assistance to SMEs.

Romina Boarini, Director of the OECD WISE Center, attended the 'KDI 50th Anniversary International Conference' online on the 17th and stated, "Currently, South Korea has about 100 SME-related support programs, but it is necessary to evaluate their funding and effectiveness and then simplify them."

Director Boarini pointed out, "Having many SME support programs indicates strong government interest, but it can also cause problems (due to the sheer number). Some SMEs do not know what support programs exist, and it is unclear whether the support is being provided efficiently."

Furthermore, she recommended establishing a 'one-stop' integrated support window for SME assistance.

Rendal Jones, Senior Research Fellow at the Japan Economic Research Institute of Columbia University, also cited the decline in South Korea's SME competitiveness as a problem at the conference. Research Fellow Jones said, "Although the proportion of startups in South Korea is large, cases where they grow in scale and enhance competitiveness are limited. There are difficulties in securing funding, and issues with the investment recovery system have reduced the potential for growth into innovative startups." He also pointed out that due to the abundance of SME support, SMEs tend to avoid being classified as mid-sized companies.

The worsening of various inequality issues in South Korea since the COVID-19 pandemic was also highlighted as a problem. Director Boarini said, "Income inequality is increasing, and as inequality grows, low-income groups cannot invest in their children's education, which inevitably worsens the country's growth prospects." Since digitalization has accelerated after COVID-19, widening the digital divide, she emphasized the need for education in both the government and private sectors to prepare for new digital jobs that will emerge in the future.

Launched last summer, the OECD WISE Center focuses on 'inclusive growth' and studies the economic situations and challenges of various countries. It concentrates on ▲government investment focused on marginalized groups ▲building inclusive labor markets and supporting corporate innovation ▲improving governance and institutional inclusiveness.

Director Boarini said, "In particular, wage gaps between workers and industries are large in South Korea's labor market," adding, "The labor market in South Korea tends to be dual-structured between regular and non-regular workers, with a particularly high proportion of non-regular female workers." She also emphasized, "Since the elderly poverty rate is high, the government needs to strengthen capabilities focusing on low-skilled and non-regular workers," and stressed, "It is necessary to identify why workers physically cannot receive education and to enhance their capabilities accordingly."

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