[Opinion] One-Stop Support for Tech SMEs and Becoming a Unicorn Powerhouse

Since the 18th of last month, the government has fully lifted restrictions on private gatherings, ended social distancing measures, and initiated a phased return to normal life. These measures are expected to provide some relief to small business owners, self-employed individuals, and small and medium-sized enterprises (SMEs) who have been struggling with declining sales. However, the realities facing our economy remain challenging, including concerns over the resurgence of the COVID-19 virus, the full-scale rise in interest rates, global supply chain disruptions and soaring prices, and international geopolitical instability.

In the wake of COVID-19, predictions that existing industrial paradigms would collapse and entirely new orders would emerge are increasingly becoming reality. Meanwhile, global competition for technological supremacy is intensifying, and the business environment is rapidly changing with the acceleration of the digital economy transition and the full-scale implementation of carbon neutrality. In this context, domestic large corporations are preparing for the post-COVID era through active investment, research and development, and new business ventures. However, many SMEs remain stuck at the stage of merely "enduring the crisis" due to resource shortages such as funding and manpower, as well as inadequate crisis response processes, let alone innovation.

South Korea’s research and development (R&D) investment scale ranks among the world’s highest (5th in absolute amount, 2nd in GDP ratio), but a large portion of this investment comes from government support and large corporations. Despite the scale of investment, the outcomes of R&D translating into commercialization are insufficient, with commercialization success rates hovering around 40-50%. This is largely because most support funds are concentrated on the development stage, leaving insufficient budgets for commercialization, which requires even greater costs. To address this issue, one possible solution is to designate a dedicated R&D commercialization financial support institution that comprehensively provides follow-up support in various forms such as guarantees, loans, and investments for the funds needed to commercialize technologies developed with government support.

Attention should also be paid to the legal basis for promoting excellent SMEs. According to the recently amended and enforced Act on the Promotion of Technology Innovation of SMEs and its enforcement decree, government support projects for activating technology transactions and commercialization of SMEs are specified, along with the establishment of dedicated organizations and separate budgets within the Ministry of SMEs and Startups’ affiliated agencies for technology transaction-related projects. Accordingly, the SME technology transaction activation support project, which focuses on creating a technology transaction infrastructure centered on SME demand and one-stop support for commercialization of introduced technologies, is currently underway, raising expectations for the revitalization of the technology transaction ecosystem. Furthermore, if the aforementioned dedicated R&D commercialization financial support institution also handles technology transfer brokerage, technology trust and deposit services for protecting SME-owned technologies, it is expected to create greater synergy effects for policies supporting innovative growth of SMEs.

Support for technology SMEs, a core pillar of our economy, must be expanded. The new government has also emphasized the innovative growth of SMEs and venture companies under fair competition, pledging to achieve status as one of the world’s top three unicorn nations, expand scale-up tailored financial and R&D support, and establish systems to prevent technology theft and provide remedies for damages.

In this era of paradigm shifts accelerated by the spread of COVID-19, it is necessary to establish industrial development policies that encourage the active founding of startups equipped with creative ideas and technological capabilities, enabling them to grow into unicorn companies with global competitiveness to secure South Korea’s technological sovereignty and future competitiveness. The new government should expand and strengthen support for policy institutions that can effectively back areas essential for the future, such as the innovative growth of SMEs.

Professor Sangbong Kim, Department of Economics, Hansung University

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