Joo Young-seop, Former Head of the Small and Medium Business Administration, Urges New Government to Overcome Departmental Egoism and Innovate into a Matrix Organization

Juyeongseop, Former Commissioner of the Small and Medium Business Administration

[Asia Economy Reporter Kwak Min-jae] “As someone who contributed to the establishment of the Ministry of SMEs and Startups (MSS), it is a painful fact that there is little opposition from the small and medium enterprise sector regarding the recent discussions on the reorganization of the MSS. Nevertheless, an organization centered on its target, like the MSS, is absolutely necessary for SMEs. The new government must abandon departmental selfishness and power games and innovate into a matrix organization.”

On the 30th, Professor Joo Young-seop, Special Professor at Seoul National University and former Commissioner of the Small and Medium Business Administration, stated in an interview with Asia Economy, “The new government should break away from the traditional departmental selfishness and power games and design a matrix organization that meets the demands of an era of hyper-change and great transformation.”

Professor Joo diagnosed that the discord between the MSS and the Ministry of Trade, Industry and Energy (MOTIE) stems from the failure to properly adhere to the organizational principles based on a matrix structure. In the case of smart manufacturing innovation policies, industrial policies such as manufacturing innovation should be handled by MOTIE, while the MSS should take charge of the spread of smart factories and cooperate. However, both sides excluded each other and rushed to independently push forward competitively. Professor Joo said, “The MSS excessively excluded MOTIE from the relevant policies,” adding, “For a while, MOTIE was unable to even use the word ‘manufacturing.’”

He argued that government reorganization that weakens SMEs should be avoided. Professor Joo pointed out, “Due to the nature of the ministry, MOTIE talks to large companies like Hyundai Motor when discussing the automobile industry, but does not engage with small parts companies,” and added, “If MOTIE is responsible for SMEs, the relevant policies will inevitably be weakened.” He further noted, “In a low-growth era, most of Korea’s unicorn companies have a large domestic market share, so when unicorn company jobs increase, SME jobs decrease in a zero-sum structure,” and warned, “If the Ministry of Science and ICT is responsible for fostering startups, SME research and development (R&D) could actually be weakened.”

Professor Joo insisted that to solve the numerous challenges facing South Korea in this era of hyper-change and great transformation, the direction of government organizational innovation must be toward a matrix organization. He emphasized, “Matrix organizations are effective for handling the era’s top priority tasks that require participation from all ministries, such as fostering innovative SMEs, addressing low birth rates and aging, and revitalizing local economies,” and explained, “Matrix organizations combine functional and project-based structures, organizing both vertically and horizontally, thereby merging the advantages of both.”

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