<기사제목>Ministry of SMEs to Invest 18 Trillion Won Next Year... Reviving Small Businesses and Fostering Ventures and Junggi Companies

Minister Kwon Chil-seung's Budget Announcement for 2022 on the 1st
1.8 Trillion KRW for Loss Compensation... Support for Closures and Re-startups
Helping Small Businesses and SMEs Adapt to Changing Business Environments
Spreading the Second Venture Boom... Expanding New Business R&D Budget

Kwon Chil-seung, Minister of SMEs and Startups

[Asia Economy Reporter Kim Bo-kyung] The Ministry of SMEs and Startups has prepared a budget of 18 trillion won for next year. The focus is on the recovery of small business owners struggling due to COVID-19, fostering ventures and startups, and supporting regional small and medium enterprises (SMEs).

On the 1st, Minister Kwon Chil-seung held a briefing at the Government Complex Sejong and announced that the 2022 budget was set at 18 trillion won, an increase of 1.1807 trillion won (7%) compared to this year. The budget proposal is scheduled to be submitted to the National Assembly on the 3rd.

The three main investment priorities of the budget are set as ▲ recovery and competitiveness enhancement of small business owners ▲ fostering global innovative ventures and startups ▲ nurturing regional SMEs and creating jobs.

First, 1.8 trillion won has been allocated to compensate for losses incurred by small business owners due to COVID-19 quarantine measures. The Ministry plans to hold a Loss Compensation Deliberation Committee on the 8th of next month to finalize detailed compensation criteria and proceed with follow-up procedures, aiming to start payments as early as the end of next month. Losses incurred after the fourth quarter of this year will be executed through the 2022 budget.

Through the 'Small Business Hope Return Package Support (113.9 billion won)' for small business owners in management crisis, support will be strengthened throughout the entire cycle, including providing management improvement funds or assisting with closure, re-startup, or re-employment.

To help small business owners respond to changes in the business environment such as non-face-to-face and digitalization, support for online market entry through channel-specific store openings and live commerce operations will continue. The scale of the small business online sales support project is 87.5 billion won, targeting 60,000 locations.

To revitalize declining commercial districts in old downtown areas into hub spaces reflecting regional characteristics, about six new target sites will be selected and supported under the 'Commercial District Renaissance' project. Selected commercial districts will receive support for content-centered revitalization projects and infrastructure-centered environmental improvement projects, with selections expected to be completed within the year.

Thirty-four new digital specialized markets will be selected to support non-face-to-face sales channels in traditional markets and shopping districts, and fire safety facilities will be expanded to create safe traditional markets.

A total of 3.9057 trillion won has been allocated for fostering global innovative ventures and startups.

The number of baby unicorn companies with high growth potential to be discovered will increase from 60 this year to 100 next year, with 30 billion won allocated. Additionally, 136.1 billion won will be spent supporting the commercialization of startups in innovative fields such as non-face-to-face, BIG3, and materials, parts, and equipment (SoBuJang).

Through a mother fund investment of 720 billion won, funds exceeding 1.6 trillion won will be raised to expand venture investment and spread the second venture boom. A comprehensive venture investment management system will be established (3.8 billion won) to provide integrated information related to venture investment and systematically manage fund operation information.

Follow-up measures to enhance SME export support, such as export consortia (14.1 billion won) and online export joint logistics (14.2 billion won), will expand the base of SME exports.

The R&D budget for SMEs in new business areas such as the Korean New Deal, carbon neutrality, BIG3, and infectious diseases has been significantly expanded to 1.8729 trillion won.

The smart factory dissemination project aims to achieve 30,000 units by next year, while 15.4 billion won will be invested in the advancement of the 'Artificial Intelligence SME Manufacturing Platform (KAMP)' for small manufacturing companies lacking data infrastructure.

Additionally, digital cluster construction (3 locations, 8 billion won) and on-site workforce training for manufacturing innovation such as artificial intelligence (100 people, 1 billion won) will be conducted simultaneously.

A total of 52.6 trillion won and 36 trillion won have been allocated for loans to SMEs and small business owners respectively, with a total of 106.384 trillion won allocated for nurturing regional SMEs and job creation.

The Ministry plans to gradually normalize policy finance, which was temporarily increased in response to the initial COVID-19 outbreak. A ministry official stated, "Considering that uncertain economic conditions such as COVID-19 will continue next year, the scale will be adjusted gradually," adding, "The role of policy finance for crisis response will continue, including an increased allocation for special management stabilization funds for small business owners."

In accordance with the enactment of the Regional SME Act, a continuous monitoring system for crisis signs in areas densely populated with SMEs and small business owners will be established (around five regions), and in case of crisis situations, designation of special support areas will be considered to provide rapid recovery support.

New projects will also be launched, such as value chain-based collaboration projects (one location, 1 billion won) and customized export platform construction projects (two locations, 4.4 billion won) to establish a foundation for new business creation in regions.

In regulatory free zones, 1.6 billion won each will be invested in commercialization support and demonstration R&D budgets to encourage active demonstration by zone businesses.

To enable SMEs to respond quickly to rapidly changing business environments, a 'Structural Innovation Support Center (tentative name)' will be established and operated. The center will provide integrated support for structural innovation such as digital transformation and labor transition for SMEs.

Based on field demand, AI specialists will be trained, and through measures such as extending the sunset of the Youth Employment Tomorrow Deduction, the inflow of excellent young talent into SMEs will be promoted.

This budget is notable for pursuing a restructuring of budget projects amounting to 2.6 trillion won (15% of the total), considering policy priorities and project performance.

Minister Kwon explained, "Budgets for relatively lower priority projects have been reduced, and selection and concentration have been made on budgets to strengthen the competitiveness of SMEs, ventures, and small business owners."

He added, "While focusing on the recovery of small business owners who have been further burdened by the fourth wave of COVID-19, we will shift the growth paradigm of our economy from large corporations to technology-based innovative ventures and startups by discovering and fostering promising ventures and startups."

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