Ministry of SMEs and Startups to Address Similarity and Overlap in SME Support Programs

[Asia Economy Reporter Donghyun Choi] On the 16th, the Ministry of SMEs and Startups announced that it will reorganize the ‘Pre-Consultation System for SME Support Projects’ to streamline and systematically manage SME support projects conducted by various ministries and local governments.

The Pre-Consultation System, established based on Article 20-5 of the Framework Act on Small and Medium Enterprises, comprehensively reviews and adjusts newly established or modified SME support projects in terms of ▲similarity and duplication with other projects ▲project suitability ▲project feasibility, aiming to enhance budget execution efficiency. The Ministry of SMEs and Startups has been operating the Pre-Consultation System in earnest since 2020 after a pilot evaluation in 2019. Over three years, a total of 592 support projects underwent pre-consultation, and 305 cases (161 from central ministries and 144 from local governments) were adjusted to prevent duplicate benefits and promote collaboration among related projects.

This year, measures have been prepared to further solidify the Pre-Consultation System to minimize similarity and duplication among SME support projects and to enhance project quality.

First, a coordination function for existing projects with concerns about similarity and duplication has been newly established. Currently, the Pre-Consultation System is only applied to newly established or modified projects, so there was no coordination function for similarity and duplication among existing SME support projects. Going forward, not only newly established or modified projects but also existing projects with raised concerns about similarity and duplication will be included in the consultation scope to actively resolve similarity and duplication among existing SME support projects.

Additionally, the scope of pre-consultation for new or modified projects has been expanded. Currently, if pre-consultation is omitted when establishing an SME support project, no additional consultation is conducted later, creating a loophole in the system. There are also blind spots in consultation, such as when new projects are added as sub-projects. In the future, projects that should be subject to pre-consultation but were omitted due to non-application by central ministries or local governments in the previous year, as well as newly established sub-projects, will be included in the pre-consultation scope to eliminate these blind spots.

Measures to improve the implementation rate of pre-consultation and the effectiveness of consultation results have also been strengthened. Despite the Pre-Consultation System being mandatory, some SME support projects still proceed without pre-consultation and are reflected in new budgets. Going forward, only projects that have undergone pre-consultation will be reflected in new budgets, and collaboration with related ministries (Ministry of Economy and Finance, Ministry of the Interior and Safety) will be strengthened to increase compliance rates.

For newly established projects by local governments, support for project planning through expert consulting will be expanded to review and support similarity and duplication, project suitability, and feasibility from the planning stage, thereby improving the quality of SME support projects.

Minister Kwon Chil-seung of the Ministry of SMEs and Startups stated, “Since various ministries and local governments carry out about 310 different SME support projects, the Ministry of SMEs and Startups’ role in coordination and linkage is important to ensure these diverse projects are implemented systematically and effectively. We will actively collaborate with related ministries such as the Ministry of Economy and Finance and the Ministry of the Interior and Safety to ensure that pre-consultation results are reflected in budgets and strengthen the effectiveness of the system so that each support project is implemented without overlap and effectively.”

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