Ministry of SMEs and Startups to Continue 'Fostering Strong SMEs, Ventures, and Small Businesses' Next Year

2022 Ministry of SMEs and Startups Work Plan Announcement
Expansion of Small Business Loss Compensation, 35.8 Trillion KRW in Policy Financing
Support for Venture and Startup Workforce Development... Promotion of Dual-Class Voting Rights Introduction
Support for Low-Carbon Transition in High-Carbon Industries to Improve ESG Awareness

[Asia Economy Reporter Kim Heeyoon] The Ministry of SMEs and Startups will focus on the rapid support for damage and recovery of small business owners and strengthen the cultivation of ventures and startups to spread the enthusiasm for entrepreneurship.

On the 22nd, the Ministry of SMEs and Startups announced the "2022 Ministry of SMEs and Startups Work Plan," centered on fostering strong SMEs, ventures, and small business owners.

First, to provide substantial compensation for small business owners, the Ministry will add the "facility personnel restriction measures" to the compensation targets and raise the minimum compensation amount from 100,000 KRW to 500,000 KRW.

To aid recovery from damages caused by strengthened quarantine measures, quarantine support funds will be provided, and low-interest funds totaling 35.8 trillion KRW will be supplied, including 10 trillion KRW for the "Hope Loan Plus" and 2 trillion KRW for the "Special Loan for Daily Recovery" to small business owners affected by COVID-19.

Customized full-cycle support for small business owners will be promoted, covering crisis (management improvement), closure (business liquidation and loan burden relief), and re-challenge (reemployment and startup).

This includes the establishment of a new "Management Improvement Package" (23.8 billion KRW) for crisis support, support such as store demolition and debt adjustment (42 billion KRW), bridge guarantees (500 billion KRW), and linked support for re-challenge education and funds (50.2 billion KRW).

Emphasis will also be placed on strengthening self-sustainability through improving the structure of small business owners. To this end, about 5,000 smart stores, workshops, and markets will be fostered, and digital traditional markets will be expanded through support for online entry and delivery infrastructure.

Rechargeable cards for Onnuri gift certificates, considering consumer convenience, will also be introduced, and the issuance of card and mobile Onnuri gift certificates will be expanded from 350 billion KRW this year to 1.5 trillion KRW next year.

Focus on Fostering Innovative Ventures and Startups... Promotion of Multiple Voting Rights Introduction

The government will spread the enthusiasm for entrepreneurship by fostering innovative ventures and startups. The Ministry of SMEs and Startups will expand the support period for startup companies in future new industries from 7 years to 10 years and allocate more than 40% of the startup commercialization budget to new industry sectors to promote innovation-centered startups focused on technology, youth, and regions.

Additionally, startup policies tailored to youth will be promoted, such as designating universities with excellent startup support infrastructure as "Startup-Centered Universities." These include △improving startup-friendly academic systems △fostering youth-specialized TIPS (Tech Incubator Program for Startups) operators △raising a 100 billion KRW youth startup fund.

The establishment of the "K-Bio Lab Hub," which comprehensively supports bio startups, will be pursued, and the regional startup support functions of the Creative Economy Innovation Centers and startup incubation centers will be strengthened.

As a measure to attract venture capital, the government will provide seed money to encourage private venture investment, such as the Korea Fund of Funds investing about 1 trillion KRW to create additional venture funds exceeding 2 trillion KRW. To secure talent, stock option activation and the formal launch of the Venture and Startup Academy (with about 1,200 participants) will induce the inflow of excellent talent and long-term employment.

Plans include promoting the introduction of multiple voting rights, a long-standing industry demand, and adopting a combined investment and loan financial system widely used in Silicon Valley, USA.

M&A funds and intermediate recovery funds will be established, and investment regulations related to M&A will be significantly improved, such as easing investment restrictions on listed companies for M&A funds and exceptionally allowing major shareholders of acquired companies to invest when establishing special purpose companies (SPCs) for M&A purposes.

The government will promote the designation of new regulatory-free zones (around five) and strengthen Technoparks (TP) as comprehensive support institutions for regional companies. Intensive support will also be provided by discovering 100 leading companies to drive regional key industries.

Enhancing SMEs' Response to Environmental Changes such as ESG... Strengthening Business Transformation Support

The Ministry of SMEs and Startups will enhance SMEs' ability to respond to environmental changes such as ESG (Environmental, Social, and Governance), which has recently gained attention, and build a growth foundation.

First, the scope of business transformation support for SMEs will be expanded from industry conversion to the introduction of promising items or services in new business fields and business model innovation. The scale of business transformation funds will also be significantly increased from 100 billion KRW this year to 250 billion KRW next year. Ten new Structural Innovation Support Centers will be established for one-stop support.

Furthermore, low-carbon transitions by industry will be induced and supported for high-carbon industries among SMEs, and carbon-neutral management will be spread throughout SMEs. Systematic support will be provided for green technology development and dissemination necessary for carbon reduction, process improvements to enhance energy efficiency, and business transformation of high-carbon industries.

An SME ESG self-diagnosis (checklist) system will be established and operated, and industry-specific specialized indicators will be developed and provided to strengthen SMEs' response capabilities.

The Ministry will advance the smart factory support system by spreading leading models such as K-Lighthouse Factories and carbon-neutral factories and operating the My Manufacturing Data platform for sharing, trading, and utilizing manufacturing data.

To continue the export growth trend, the number of Brand K designations will be expanded to 300. Dedicated shipping spaces for SMEs and logistics vouchers (11.9 billion KRW) will also continue to be supported.

Support for Establishing Fair Trade Order and Spreading Win-Win Cooperation Culture

The government also presented measures to establish a culture of win-win cooperation and fair trade throughout the economy.

First, to ensure fairness in the online platform sector and protect neighborhood commercial districts, a win-win cooperation council involving online platform companies and small business owners will be operated to resolve conflict issues through consensus. Amendments to the "Win-Win Cooperation Act," aimed at prohibiting unfair fee increases and establishing grounds for online platform win-win cooperation councils, will also be pursued.

Measures to improve the designation method of SME-suitable industries to prevent reckless business expansion by large online platform companies will also be explored.

Additionally, among items with certified international market prices, a pilot project encouraging the use of standard contracts to induce voluntary linkage of supply prices will be operated. The government plans to enhance SMEs' negotiation power during supply price adjustment consultations and focus on investigating and correcting unfair special clauses that prohibit supply price adjustments.

Ten more "Kind Companies" will be selected, and a Kind Platform involving Kind Companies and related associations will be formed to discover win-win cooperation tasks.

Moreover, the Ministry of SMEs and Startups will expand incentives for excellent companies using win-win payment systems and strengthen the win-win payment co-growth evaluation to promote the spread of win-win payments.

Minister Kwon Chilseung of the Ministry of SMEs and Startups said, "While focusing on the recovery of damages to small business owners, efforts to enhance self-sustainability such as strengthening online capabilities must also be pursued simultaneously. It is important to foster innovative ventures and startups that can lead changes beyond responding to global economic structural changes such as carbon neutrality and ESG (Environmental, Social, and Governance)."

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