Full Support for SME New Business Transformation... Lee Young "Enhancing National Economic Growth Potential"

Enforcement Decree Amendment Approved at Cabinet Meeting on the 30th

Support for new business transformation to create future growth engines for small and medium-sized enterprises (SMEs) will be fully launched from the 17th of next month.

Minister Lee Young, Ministry of SMEs and Startups
Photo by Yonhap News

The Ministry of SMEs and Startups announced that the amendment to the Enforcement Decree of the Special Act on the Promotion of Business Transformation for SMEs, which includes expanding the recognition requirements for business transformation of SMEs and stipulating procedures and standards for joint business transformation involving multiple companies, was approved at the Cabinet meeting on the 30th.

First, the recognition requirements for SME business transformation have been expanded. Through the amendment of the "SME Business Transformation Act" in May, SMEs attempting to transform their business into new business fields are now recognized even if they add products or services within the same industry or introduce new delivery methods. Previously, only changes or additions to industries based on the standard industrial classification system were recognized as business transformation.

The proportion of the transformed business, which is a recognition requirement for business transformation, has been set at 30% or more, the same as for adding an existing industry. Approval decisions will be made based on the transformation plan established by the SME without differentiating recognition requirements by type.

Procedures and standards for joint business transformation have also been established. This is to support various forms of business transformation such as win-win cooperation between large and small enterprises and convergence between different industries. SMEs wishing to participate in joint business transformation must select a representative SME among the participating companies, prepare a joint business transformation plan, and apply for approval from the Minister of SMEs and Startups. The proportion of the transformed business, which is a recognition requirement, will be calculated by summing all participating SMEs. This is to actively allow companies whose proportion of transformed business is less than 30% but play an important role in the joint business transformation to participate.

A Business Transformation Deliberation Committee will also be established and operated. To establish comprehensive and professional policies and support, the committee includes senior officials from the Ministry of Economy and Finance, Ministry of Science and ICT, Ministry of Employment and Labor, and Financial Services Commission as ex officio members to ensure that various support measures such as finance, research and development (R&D), manpower, and taxation are naturally reflected in the business transformation system. Additionally, private experts with expertise in industry and corporate management will be appointed as committee members to enhance policy responsiveness at the corporate level.

Minister Lee Young of the Ministry of SMEs and Startups said, “By keeping pace with changes in the economic environment and transforming into future new businesses, SMEs are expected to greatly contribute not only to the survival and competitiveness of companies but also to enhancing the growth potential of the national economy.” He added, “The Ministry of SMEs and Startups will fully support successful new business transformation of SMEs together with related ministries.”

The Enforcement Decree of the SME Business Transformation Act, passed at the Cabinet meeting on this day, will be enforced from the 17th of next month along with the SME Business Transformation Act amended in May.

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