AI Transformation and Business Succession Support... 'Small and Medium Enterprise Leap Strategy' Released

Minister Oh Young-joo Announces at the Korea Federation of SMEs on the 29th
17 Mid- to Long-Term Tasks Established with 5 Major Strategies

The government is promoting the spread of artificial intelligence (AI) to enhance the productivity of small and medium-sized enterprises (SMEs) and supporting ‘business succession.’ It will assist promising companies within existing businesses in transitioning to new industries and nurture foreign international students as talent for SMEs.

Oh Young-joo, Minister of SMEs and Startups, is delivering a welcoming speech at the "SME Finance Difficulty Inspection Council Kickoff Meeting" held on the 22nd at the Korea Federation of SMEs in Yeouido, Seoul. Photo by Kang Jin-hyung aymsdream@

On the 29th, Oh Young-joo, Minister of SMEs and Startups, announced the ‘SME Leap Strategy’ containing these details at the Korea Federation of SMEs in Yeouido, Seoul. Five major strategies?‘Innovative Growth,’ ‘Sustainable Growth,’ ‘Growth Together,’ ‘Global Leap,’ and ‘Smart Support’?were established along with 17 mid- to long-term tasks.

First, the plan is to foster future growth potential through AI transformation. To reduce defects and improve production efficiency at SME sites, a manufacturing data standard guide will be established to promote digital connectivity between factories and companies instead of focusing on individual equipment. To distribute AI process solutions, collaboration among ‘Regional Specialized AI Centers,’ regional technoparks, and local governments will be strengthened. Smart companies supplying solution development and autonomous process equipment will be nurtured at the industrial level, and AI- and digital-based value chain innovation infrastructure will be created. To this end, a separate support track related to nurturing smart supply companies will be newly established within startup support projects.

As low birth rates and aging intensify, making family succession difficult, the concept of ‘business succession’ will be expanded to ‘corporate succession’ to ensure the sustainable management of SMEs. According to the Korea Federation of SMEs, the proportion of CEOs aged 60 or older in manufacturing SMEs increased from 14.1% in 2012 to 31.6% in 2022. For SMEs wishing to succeed through mergers and acquisitions (M&A), a support system linking the central government, local governments, and private brokerage firms will be established to assist all stages from M&A preparation and consulting to M&A matching, brokerage, and post-M&A management integration. To this end, the Ministry of SMEs and Startups plans to enact the ‘(tentative name) Special Act on SME Corporate Succession’ in the first half of next year.

Promising SMEs in traditional industries will be able to scale up by entering new industries through a complete overhaul of the business transformation system. The government will classify existing SMEs’ entry into new industries as a ‘second startup’ and share risks as much as possible through dedicated package support and new regulatory exemptions. Promising companies entering future strategic fields such as advanced manufacturing, energy, digital and telecommunications, AI and smart technologies, and bio will be selected based on technological and innovative capabilities, and various entry methods such as spin-offs, subsidiaries, and joint ventures will be recognized.

To alleviate the manpower shortage in SMEs, the government will promote domestic employment of approximately 190,000 foreign international students and skilled professionals from overseas top universities. Comprehensive support will be provided, including building a job-seeking and recruitment database for foreign international students, online talent matching, visa conversion, and linking studies with employment.

Additionally, support for research and development (R&D) in national strategic technology fields will be expanded from the current 38% to over 50%, improvements will be made to the stable operation of the foundational fund including private capital inflow, the SME certification system will be reformed to prepare for the future, the appropriateness of SME scope criteria will be reviewed, and incentives for SME employees will be strengthened.

Minister Oh said, “Legislative tasks will be promptly pursued after the opening of the 22nd National Assembly, and through the pan-government joint ‘SME Growth Ladder Task Force (TF),’ we will closely cooperate with related ministries to policyize these measures. We will establish ourselves as a policy ministry by preparing mid- to long-term policies and strategies that respond to rapidly changing environmental changes.”

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