Ministry of SMEs and Startups: "We Will Support Ventures and Startups to Enter the Global Stage... Leading the Digital Economy"

Business Report to the Ministry of SMEs and Startups on the 12th... Promoting the 'Venture and Startup 3.0' Model
Establishment of the 'Ultra-Gap Startup 1000 Project' for Fostering Technology Companies
Expansion of Ultra-Low Interest Loan Eligibility, Increase in Limits... Various Regulatory Improvements

Minister Lee Young of the Ministry of SMEs and Startups (left) is reporting the ministry's work plan to President Yoon Suk-yeol at the Presidential Office in Yongsan, Seoul, on the 12th.
[Photo by Presidential Office]

[Asia Economy Reporter Kim Bo-kyung] The government will implement policies this year to promote the global expansion of ventures and startups. The plan aims to help them break away from competition in the narrow domestic market and take the lead in the global digital economy.

Additionally, to reduce the loan interest burden on small business owners affected by COVID-19 and to support small and medium enterprises (SMEs) struggling with rising raw material costs, a standard contract for linking delivery prices will be prepared within the year.

On the 12th, the Ministry of SMEs and Startups reported these plans to President Yoon Suk-yeol at the presidential office in Yongsan, Seoul. The ministry has set the vision of "Becoming a leading nation in the digital economy era led by SMEs and startups" and plans to implement customized tasks targeting ventures, startups, small business owners, and SMEs.

◆Promoting overseas expansion and coexistence with small business owners... TIPS program doubled= First, in September, the 'Global Venture and Startup Summit' will be held with participation from big tech companies like Google and Amazon, as well as major venture capitalists (VCs), to strengthen Korea-US venture startup networking.

The 'K-Startup Center,' which provides ventures and startups with a package of commercialization funds, office space, and local networks, will also be further expanded. Currently, K-Startup Centers operate in seven countries including the United States, France, and Singapore.

While expanding the global fund, which is funded by the Korea Fund of Funds and invested domestically and internationally by overseas VCs, the government also plans to help global talents such as foreigners and international students settle after starting businesses in Korea.

In the second half of this year, a 'Venture and Startup 3.0' coexistence model led by digital platform companies will be promoted to resolve conflicts with micro and small business owners and contribute to society.

Next year, the 'Super-gap Startup 1000 Project' will be launched to focus on nurturing technology startups in semiconductors, bio, and artificial intelligence (AI). This project will provide up to 600 million KRW in commercialization funds over three years, along with linked support for research and development (R&D), loans, and guarantees.

Additionally, the TIPS program scale will be doubled, and a separate track for deep-tech fields such as AI, big data, and bio will be established to extend the duration and scale. The Korea Fund of Funds will be concentrated in digital and super-gap sectors, and legislation for introducing multiple voting rights to support the growth of unlisted venture companies will be continuously pursued.

[Image source=Yonhap News]

◆Completion of loss compensation payments by end of August... Expansion of Donghaeng Sale event= Support for small business owners to recover from COVID-19 damage will also be carried out without delay.

First, the 23 trillion KRW scale loss compensation payments will be completed by the end of next month, and the second quarter 2022 loss compensation payments will begin in September.

For small business owners, 'loss compensation recipients' will be added to the target group for ultra-low interest loans worth 10 trillion KRW, and the loan limit will be raised from 10 million KRW to 20 million KRW. Additionally, refinancing loans converting high-interest rates above 7% to low-interest rates of 4-7% will be provided on a scale of 8.7 trillion KRW.

The annual Donghaeng Sale event held every September will be expanded to launch a consumption stimulation campaign, and support projects to nurture entrepreneurial small business owners will be increased.

◆Promotion of delivery price linkage... Expansion of smart factories= The Ministry of SMEs and Startups aims to prepare a standard agreement reflecting the rise in raw material prices and pilot the 'delivery price linkage system' by the second half of this year.

The ministry plans to mandate the inclusion of delivery price linkage clauses in contracts but will leave the linkage methods and detailed regulations to the autonomy of companies to avoid excessively restricting market freedom.

From next year, the requirements for applying for delivery price adjustment mediation will be relaxed, and incentives will be given to consigned companies (large corporations) with excellent mediation performance. Incentives mentioned include exemption from regular surveys, increased points in the win-win growth index, and government awards.

Reference photo

In the second half of this year, a 'technology protection policy insurance' will be introduced to cover litigation costs in cases of SME technology infringement. The pool of experts in the existing legal support group will also be expanded to reduce administrative and legal burdens on affected companies.

Next year, future-type smart factory models such as K-Smart Lighthouse Factories and Carbon Neutral Factories will be expanded, and smart workshops, retrofits, and human factories will be supported to promote the smartization of micro manufacturing companies.

The regulatory free zone system will be reformed into a performance-oriented model, and innovation hubs near zones with high global growth potential will be designated as 'Global Innovation Zones' for focused support. 'Hurdle regulations' and 'hidden regulations' that are felt on the ground will be intensively discovered and improved, with 13 regional offices and SME ombudsmen playing roles in resolving corporate difficulties.

Minister Lee Young of the Ministry of SMEs and Startups emphasized, "We will help startup ventures lead global market development and the digital economy, and nurture innovative entrepreneurial small business owners and happy neighborhood commercial districts." He added, "We will do our best to implement customized core tasks for each target and key tasks for the second half of the year to grow SMEs into the strong backbone of Korea's economy."

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