Odongyun, Head of the Small and Medium Business Institute, "Increasing Support for SMEs Alone Is Not the Solution... Bold Policy Changes Are Needed"

Small and Medium Business Venture Institute Hosts '2024 Global Policy Environment Changes and Small Businesses' Symposium

A claim has emerged that a bold shift from industrial policy to corporate policy is necessary for South Korea to leap into the world's top five countries. While the government has driven industrial growth so far, it now means that the market should lead so that companies can drive growth.

Odongyun, President of the Small and Medium Business Research Institute, is giving a lecture at the '2024 Global Environmental Changes and Small Businesses' symposium held on the 27th at the Fairmont Ambassador Hotel in Yeouido. (Photo by Dayeon Yeom)

The Korea Institute of Startup & Entrepreneurship Development (KOSI) held a symposium titled ‘2024 Global Policy Environment Changes and Small and Medium Enterprises’ on the 27th at the Fairmont Ambassador Hotel in Yeouido, Seoul. This symposium was organized to analyze the potential impact of global environmental changes on South Korean SMEs and to establish countermeasures.

On the day, Director Oh Dong-yoon gave a lecture titled ‘Why Small and Medium Enterprises?’ and argued that a paradigm shift in SME policy is necessary. He said, "For the past 60 years, South Korea has grown into an economic powerhouse centered on government-led industrial policy, but recently its limitations have become apparent," adding, "Now, instead of policies suited to companies, policies suited to the market should be established so that companies can directly follow the policies."

He also emphasized the need for a constitutional amendment related to SMEs. Director Oh said, "In 1980, the 8th constitutional amendment included the provision that ‘the state shall protect and foster the business activities of small and medium enterprises,’ but the situation has changed significantly since then," adding, "It is necessary to amend the constitution anew with content that can support ‘cooperation and competition’ rather than protection and fostering." He further stated, "There is more than a tenfold difference in the size of business establishments, so the same framework should not be applied equally." At the time of the 1980 amendment, the number of SME business establishments was estimated at about 700,000, whereas as of this year, SMEs are estimated to number 7.71 million.

He questioned, "I want to ask whether simply increasing support for SMEs can really eliminate the ‘Peter Pan syndrome,’" pointing out that quantitative expansion of policy is not the only solution. On the 15th, Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance, said at an expert meeting on the ‘SME Growth Ladder’ held at the Government Seoul Office, "We will expand support for SMEs to fix the ‘Peter Pan syndrome.’" Deputy Prime Minister Choi announced plans to unveil the ‘SME Growth Ladder Establishment Plan (tentative name)’ in the first half of the year. The ‘Peter Pan syndrome’ refers to the reluctance to grow due to reduced support when SMEs grow into mid-sized companies and a lack of new support.

In response, Director Oh emphasized that instead of indiscriminately providing benevolent support based on uniform criteria for SMEs, customized support that SMEs can directly choose from, such as categorizing them into livelihood-type and growth-type, is necessary. Director Oh said, "It seems desirable to provide practical help such as electricity bill reductions to companies choosing the livelihood type, and to offer opportunities for research and development (R&D) and enable them to produce results for those choosing the growth type."

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