Conflicting Views on the 'Corporate Growth Ladder'... SMEs "Welcome", Mid-sized Companies "Regret"

Joint Ministry Announcement on 'Building a Corporate Growth Ladder'
SME Sector "Positive for Reducing SME Burdens"
Mid-sized Companies "Additional Policies Needed for Mid-sized Firms"

The government announced the 'Corporate Growth Ladder Establishment Plan' to support the growth of promising small and medium-sized enterprises (SMEs) with high growth potential and willingness into mid-sized companies. The SME sector immediately welcomed the announcement. However, the mid-sized enterprise sector expressed regret, stating that the plan focuses only on alleviating the burden on SMEs, resulting in reduced effectiveness.

On the 3rd, the Korea Federation of SMEs issued a statement saying, "We welcome the 'Corporate Growth Ladder and Export Measures' prepared to promote sustainable innovative growth of SMEs and restore the dynamism of the national economy."

[Image source=Yonhap News]

The Federation of SMEs stated, "This measure was prepared to strengthen tax support to resolve the 'Peter Pan syndrome,' where SMEs hesitate to grow into mid-sized companies, and to support SMEs struggling due to the domestic market slump in entering overseas markets," adding, "the tasks discussed through the 'SME Express' field meetings jointly launched by the Ministry of Strategy and Finance and the Korea Federation of SMEs, such as ▲strengthening the capabilities of institutions executing SME export support projects and ▲restructuring the globalization support system, have been significantly reflected," they said with a welcoming voice.

In particular, the Federation highly evaluated the various regulatory relaxations included in this measure. The Federation said, "Measures such as improving the quality and price of export voucher services, enhancing institutional accessibility through the integration of scattered SME export support systems, and including mutual aid associations as institutions submitting guarantees for the Economic Development Cooperation Fund (EDCF) projects are positively evaluated as they alleviate the burden on SMEs regarding exports."

However, the Federation requested, "To promptly resolve the SME sector's proposed tasks such as expanding the scope of business assets in business succession support systems, cooperation and monitoring among related ministries should be strengthened," adding, "The SME sector will do its best to achieve sustainable growth based on the government's growth ladder and SME export measures to gain competitiveness in the global market beyond the domestic market."

Unlike the SME sector, which expressed a welcoming stance toward the government’s measures, the mid-sized enterprise sector gave a somewhat disappointing evaluation.

The Korea Federation of Mid-sized Enterprises stated in a commentary, "The 'Corporate Growth Ladder Establishment Plan,' prepared through cross-ministerial cooperation, is meaningful in that it highlights the importance of the corporate growth ladder, a key driver of economic dynamism," but added, "It is somewhat regrettable as it is excessively focused on alleviating the growth burden of SMEs and lacks a roadmap to promote innovation and challenges across all enterprises, including mid-sized companies."

The Federation emphasized, "To secure effectiveness, this plan must strictly consider the principle of growth as a continuous flow rather than a series of disconnections," and stressed, "Additional policy efforts to directly strengthen the competitiveness of mid-sized companies, which are yesterday’s SMEs and tomorrow’s large enterprises, must continue."

They further stated, "The 'Growth Ladder Jump-up' program, which focuses on nurturing 100 promising SMEs as presented in the 'Corporate Growth Ladder Establishment Plan,' should be expanded to include mid-sized companies," adding, "A comprehensive support policy package covering finance, manpower, and overseas expansion, suitable for the capabilities of many mid-sized companies on the verge of becoming global specialized companies, must be activated. Bold measures such as proactively alleviating the continuous growth burdens of mid-sized companies, including excessive inheritance and gift taxes, are expected to follow."

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