"Over 900 Billion Won Invested in Innovation Growth of Local SMEs"

Launch of the 1st Regional Small and Medium Business Policy Council

[Asia Economy Reporter Donghyun Choi] The Ministry of SMEs and Startups announced on the 17th that it will launch a consultative body in cooperation with the government and local governments to support the growth of local small and medium-sized enterprises (SMEs) and provide more than 900 billion KRW in support through this initiative.

On the same day, Minister Kwon Chil-seung of the Ministry of SMEs and Startups inaugurated the 1st Regional SME Policy Council (hereinafter referred to as the Policy Council) at the Government Seoul Office. The Policy Council is chaired by the Minister of SMEs and Startups and includes vice ministers from related ministries such as the Ministry of Economy and Finance, Ministry of Trade, Industry and Energy, Ministry of Science and ICT, as well as deputy heads of metropolitan cities and provinces. Going forward, it plans to deliberate and coordinate matters related to the fostering and innovation promotion plans for local SMEs and related regional SME systems.

Until now, regional SME policies have been discussed without a dedicated consultative body and were not distinguished from general SME policies. The Policy Council holds great significance in officially recognizing local SMEs as an independent policy target and an important pillar of regional economic development.

The Policy Council will first invest 310 billion KRW in technology development and commercialization. It plans to support promising companies leading the regional economy, such as those fostering region-specific industries and regional innovation-leading enterprises, and create innovation hubs by region to enable talented individuals to start businesses locally.

Additionally, the Policy Council will promote the establishment of local-exclusive funds worth more than 470 billion KRW to build a self-sustaining regional investment ecosystem, including Angel Hubs, Angel Bridging Funds, and Regional New Deal Venture Funds. It will also discuss the restructuring direction of the annual 200 billion KRW regional specialized industry promotion strategy.

Considering recent changes in management conditions such as ESG (Environmental, Social, and Governance) and carbon neutrality, it will establish plans for selecting and restructuring key industries that will become future growth engines of the regions and regional growth strategies. Furthermore, it will extend policy fund and guarantee maturities for companies facing liquidity crises due to COVID-19 in crisis regions and jointly establish a structural innovation support center with the Ministry of Employment and Labor to support transitions to new industries.

Evaluation and operational plans related to the 'Regional Specialized Development Zones,' operated mainly at the city/county/district level, and the 'Regulatory Free Zones,' which relax regulations on new industries to allow and support demonstrations, were also discussed. This year, Regulatory Free Zones will be designated twice, in the first and second halves of the year. The focus will be on areas that have not been designated so far and sectors with many regulatory requests from SMEs. Regulatory Free Zone companies will receive 123.9 billion KRW in support for business item demonstrations, technology development, patents, testing and evaluation, equipment utilization, certification, and marketing.

Meanwhile, among the 196 currently designated regional special zones at the city/county/district level, an evaluation of the '2021 operation results' will be conducted in the first half of this year for 184 zones excluding excellent and newly designated zones. Excellent zones will receive incentives such as awards and linkage with Ministry of SMEs and Startups financial projects, while underperforming zones will be given opportunities for improvement through consulting.

Minister Kwon Chil-seung of the Ministry of SMEs and Startups stated, “The main agents of regional economic growth are local SMEs,” and added, “The Ministry of SMEs and Startups will spare no policy efforts to enable local SMEs to achieve innovative growth.”

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