The Government's SME Support Measures Are Like 'Bungeoppang'

산자부·Junggibu Development Plans Flood In, but Focus Only on Promotion, Overlapping Funding Remains
Unclear Task Division... Concerns Over Tax Waste

[Asia Economy Reporters Haeyoung Kwon (Sejong), Bokyung Kim] Lighthouse companies, Baby Unicorns, Prospective Unicorns, One-person Creative Enterprises, Venture Billion-Won Companies, ...

As government ministries compete to roll out support policies for medium-sized and small businesses, criticisms have arisen that these are merely "different-named copies" of the same policies. Although the names sound plausible, the support measures are quite similar, raising concerns about wasteful spending of taxpayers' money. This is largely due to unclear division of responsibilities between the Ministry of Trade, Industry and Energy and the Ministry of SMEs and Startups since the latter was established in 2017.

According to related ministries on the 25th, the Ministry of Trade, Industry and Energy, the Ministry of SMEs and Startups, and the Ministry of Science and ICT are competitively introducing various policies to foster medium-sized and small businesses. Representative programs include 'Lighthouse Companies (Ministry of Trade, Industry and Energy)', 'Baby Unicorns (Ministry of SMEs and Startups)', 'Prospective Unicorns (Ministry of SMEs and Startups)', 'K-Unicorn (Ministry of SMEs and Startups)', 'One-person Creative Enterprises (Ministry of SMEs and Startups)', 'Venture Billion-Won Companies (Ministry of SMEs and Startups)', and 'ICT Global Future Unicorn (Ministry of Science and ICT)'. The Ministry of Trade, Industry and Energy supports medium-sized enterprises, while the Ministry of SMEs and Startups supports small businesses, thus distinguishing by company size. However, the core content?investment attraction, overseas expansion, technology linkage, and policy fund support?is largely similar.

As a result, some ministries excessively promote their support projects. The Ministry of Trade, Industry and Energy, for example, announced in a press release distributed the day before that it will select 100 promising medium-sized companies by 2024 to nurture as 'Lighthouse Companies', mentioning 'Lighthouse' as many as 43 times.

The issue of overlapping policy fund support also persists. According to the office of Rep. Kyumin Lee of the Democratic Party, the number of small businesses receiving policy fund support two or more times over five years increased from 17,944 as of the end of 2019 to 18,772 as of September 2020.

Professor Taeyoon Sung of Yonsei University's Department of Economics advised, "For financial support projects for medium-sized and small businesses, a pre-inspection system to resolve overlapping support issues is necessary. Simple communication between ministries is insufficient; a system to integrate and manage business support projects and conduct inspections targeting beneficiary companies should be implemented concurrently."

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