The Shared Growth Committee Must Prove Its Relevance Amid the 'Uselessness of SME-Suitable Industries' Debate

Issues of Effectiveness in Win-Win Growth Index and Suitable Industries
Views of 'Overlapping Tasks' Between Large-Small Business Win-Win Special Committee
"Support for SMEs Must Begin Beyond the 3-Year Grace Period"

Oh Young-kyo, Chairman of the Win-Win Growth Committee Photo by Yonhap News

As skepticism about the relevance of SME-suitable industries rises, attention is focused on whether the Commission for Shared Growth can prove its significance. There are views that its duties overlap with those of the newly launched presidential agency, and criticisms that the Commission plays a passive role as a protector of SMEs.

According to the government on the 16th, the Commission for Shared Growth will announce the Shared Growth Index for 223 large corporations next week. Since 2012, the Commission has published the Shared Growth Index annually under the Large and Small Enterprises and Cooperative Growth Act. This index, evaluated in cooperation with the Fair Trade Commission, assesses each company's shared growth performance and classifies them into five grades: Excellent, Very Good, Good, Average, and Poor.

Companies rated Excellent or Very Good receive various government incentives. They are granted additional points in public procurement bids by the Public Procurement Service, issued preferential immigration cards by the Ministry of Justice for airport convenience, exempted from Fair Trade Commission's ex officio investigations for 1-2 years, and given preferential treatment when participating in R&D projects by the Ministry of Trade, Industry and Energy. A Commission official said, "Large corporations pay special attention to shared growth issues to the extent that they have dedicated departments for it."

However, companies hold somewhat skeptical views about the effectiveness of the Shared Growth Index. A representative from a large corporation stated, "Although we engage in various social contribution activities, it is unreasonable to score and evaluate corporate image solely based on relationships with subcontractors." Another large corporation representative said, "Public procurement bids by the Public Procurement Service mainly favor SMEs, so there is practically no benefit," adding, "Exemption from ex officio investigations is useless if complaints are filed with the Fair Trade Commission." There is also criticism that since no penalties are imposed on companies with low shared growth ratings, there is a lack of driving force to promote coexistence between large and small enterprises.

The SME-suitable industry designation, which restricts large corporations' market entry for three years, is similar in context. In May, the designated SME-suitable industry of designated driver services has seen ongoing conflicts over detailed issues such as call sharing between SMEs and large corporations like T map Mobility. Particularly, since the Commission's recommendations lack legal enforceability even if large corporations do not comply, it is pointed out that the practical effect of protecting SMEs is insufficient. The Commission is currently conducting final reviews on whether to designate the waste plastic recycling business as an SME-suitable industry.

With the launch of the Presidential Special Committee on Shared Growth between Large and Small Enterprises on the 13th, there are views that its duties may overlap with those of the Commission. The special committee, composed of 10 private experts, will work over the next 100 days to establish a sustainable shared growth ecosystem between large and small enterprises and improve unreasonable systems and practices. Some suggest that the Commission needs to take a more proactive stance in protecting SMEs. A representative from the SME sector said, "In the case of SME-suitable industries, deferring large corporations' market entry for three years is not a fundamental solution," adding, "During those three years, the Commission should support SMEs in creating a structure where they can compete with large corporations and improve their organizational health."

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