[2025 Budget Plan] Ministry of SMEs and Startups Allocates 15.3 Trillion Won for Next Year... Focus on Startup Innovation Growth

Budget Proposal to Be Submitted to the National Assembly on the 3rd of Next Month
Focus on 'Global Leap' of SMEs, Ventures, and Startups
Support for Overcoming Management Crisis and Recovery of Small Business Owners

The Ministry of SMEs and Startups has prepared a budget proposal of 15.3 trillion KRW for next year. The plan focuses on the innovative growth and global leap of small and medium enterprises (SMEs), ventures, and startups, as well as overcoming management crises and providing solid recovery support for small business owners.

On the 28th, the Ministry announced that the ‘2025 Budget Proposal’ was prepared at 15.292 trillion KRW, an increase of 342.3 billion KRW (2.3%) compared to this year’s main budget of 14.9497 trillion KRW. The budget proposal is scheduled to be submitted to the National Assembly on the 3rd of next month.

The key investment directions of the budget proposal are set as ‘creating an innovation ecosystem,’ ‘globalization,’ ‘regional and manufacturing innovation,’ ‘vitality of small business owners and commercial districts,’ and ‘sustainable growth.’

On June 13, various venture and startup companies attending the NextRise 2024 Export Startup Expo held at COEX in Samseong-dong, Seoul, are showcasing a variety of products. Photo by Jo Yongjun jun21@

Startups Creating Innovation, SMEs Expanding Globally

First, the focus is on nurturing deep-tech startups that will grow into global unicorns in next-generation growth engines such as artificial intelligence (AI) and semiconductors. The ‘Super-gap Startup 1000＋ Project,’ which selects and supports startups in 10 super-gap fields, will expand its support targets to more than 500 companies next year. In particular, in the fiercely competitive AI and system semiconductor (fabless) sectors, a customized specialized support program will be newly established, and new support for collaboration with domestic and foreign large corporations will be promoted.

Private capital inflow will also be encouraged. Next year, the government’s contribution to the mother fund will be increased to about 500 billion KRW to expand investment in innovative startups in key contribution areas such as Startup Korea, global, and mergers & acquisitions (M&A).

New growth engines will be secured for export SMEs to expand globally. In addition to existing product exports, support for tech service exports with high growth potential has been included in next year’s budget for the first time. Related services such as cloud and data center usage will be supported through vouchers. The dedicated loan scale supporting continuous scale-up of promising export companies and high-growth companies has been expanded by about 200 billion KRW compared to the previous year.

Plans are also underway to create a domestic startup ecosystem that attracts global companies and talent. The budget for building a global startup hub, a core task of the ‘Startup Korea Promotion Strategy,’ has been increased from 1.5 billion KRW this year to 31.9 billion KRW next year. The global startup hub is scheduled to be established in the Hongdae area of Seoul, with construction starting next year.

Innovation-Led Regional Growth and Building Growth Ladders for Capable SMEs

An environment where regions lead innovation growth will be created. Next year’s regional SME support budget is centered on projects related to the regional new growth model ‘Legend 50＋.’ Dedicated R&D support for regional innovation-leading companies will also be newly established to further strengthen the competitiveness of regionally specialized industries.

More focus will be placed on digital and AI-based manufacturing innovation to maximize SME productivity. The scale of support for smart factory advancement through public-private cooperation methods such as inter-ministerial collaboration and large and small business win-win models has been expanded. The budget for the dissemination and expansion of ICT convergence smart factories is expected to increase by 17 billion KRW from 219.1 billion KRW this year to 236.1 billion KRW next year.

To ensure sustainable growth, support will be provided for the scale-up and re-leap of promising SMEs. The Jump-up program for promising SMEs included in the ‘Corporate Growth Ladder Establishment Plan’ announced last May has been reflected as a new budget. Selected promising SMEs will receive support throughout the scale-up process, including matching with private experts, company-led open vouchers, and linkage with policy funds. In addition, the budget for a proactive restructuring program that supports the rapid normalization of SMEs in temporary crisis situations has also been expanded.

Co-growth between SMEs and large corporations will be expanded. For the first time, a matching support budget with the win-win cooperation fund, contributed by private large and medium-sized enterprises for co-growth purposes, has been prepared. This will be promoted in a way that large corporations participate together in tasks that SMEs find difficult to solve alone.

As small business owners continue to face management difficulties amid high inflation, the expansion of support funds for small businesses has become urgent. On June 28, empty storefronts were seen scattered throughout the commercial area near Ewha Womans University in Seodaemun-gu, Seoul. Photo by Jinhyung Kang aymsdream@

Overcoming Management Crises and Providing Solid Recovery Support for Small Business Owners

To reduce the management cost burden on small business owners struggling with high inflation, temporary support for delivery and courier fees will be provided only to micro small business owners. The budget scale is about 203.7 billion KRW.

Also, as the high-interest rate trend continues and small business owners face financial difficulties, the policy loan scale for small business owners has been prepared at 3.8 trillion KRW, about 60 billion KRW more than this year. The debt refinancing program (refinancing high-interest loans above 7% to low-interest loans) currently underway will continue to be supported next year. Small business owners facing management difficulties due to rising raw material prices will also be able to receive temporary management hardship funds starting next year.

Solid recovery support will be provided to small business owners in crisis. The budget for the Hope Return Package, which provides one-stop support from business closure to reemployment and re-startup, has been greatly expanded from 151.3 billion KRW this year to 245 billion KRW next year. Next year, support for store demolition costs will increase to a maximum of 4 million KRW (previously 2.5 million KRW), and newly include specialized employment programs linked with the National Employment Support System.

Efforts will also be accelerated to establish a scale-up foundation where small business owners can grow. The budget for entrepreneurial small business owners, who support innovative small business owners with growth capabilities at each growth stage, has increased from 52.4 billion KRW this year to 83.4 billion KRW next year. In particular, investment-linked support that matches commercialization funds for entrepreneurial small business owners who have received investments from private investors has been newly included. Additional budgets have also been reflected to directly discover promising small business owners by the private sector and provide one-on-one close support, increasing opportunities for small business owners to strengthen their digital capabilities.

Consumption promotion for local neighborhood commercial districts and traditional markets will also be supported. To enable local communities and the private sector to take the lead in revitalizing commercial districts, the budget for private-led commercial district planning will be expanded from 1.7 billion KRW this year to 4.4 billion KRW next year. Next year’s Onnuri gift certificate budget plans to issue about 5.5 trillion KRW in Onnuri gift certificates by reducing operating expenses and fees while increasing the budget related to discounts compared to this year.

Minister Oh Young-joo of the Ministry of SMEs and Startups said, “Before preparing next year’s budget, we re-examined existing projects from scratch and boldly restructured similar, overlapping, and underperforming projects. We will ensure meticulous and comprehensive financial investment from innovative growth and global leap of SMEs, ventures, and startups to overcoming management crises and providing solid recovery support for small business owners.”

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