▲ Fostering 3,000 National Representative Leap Enterprises
The government plans to foster 3,000 "national representative leap enterprises" through stage-by-stage growth support for businesses, while expanding foundations for companies facing business failure or crises to make a comeback.
For small business owners who have lacked a sufficient social safety net compared to employed workers, childcare subsidies and health care allowances will be introduced to help stabilize their livelihoods and facilitate their return to society.
By reorganizing small and medium-sized enterprise (SME) support programs, the government will cut 4.2 trillion won in budget allocations and build corporate information databases to encourage utilization by research institutes.
The Ministry of SMEs and Startups (MSS) announced today that it conducted a "Public Policy Report" outlining these core measures.
The MSS presented three major policy directions: systemizing SME growth pathways, spreading the warmth of growth across regions and sectors, and untangling complicated SME policies.
First, the ministry will pursue a "Jump-Up Program" to foster 3,000 national representative leap enterprises by providing promising regional companies with growth strategy development and leap packages.
This initiative selects top-tier representative companies—accounting for the top 1% among 390,000 medium and small enterprises excluding small business owners—and builds a ladder for them to grow into mid-sized enterprises through expert mentoring, loans, and guarantee support.
To foster innovative companies in five emerging growth sectors—new security, pharmaceuticals and biotech, climate tech, K-consumer goods, and manufacturing artificial intelligence (AI)—up to 40 billion won will be provided per company for up to five years.
Support will be delivered in a multi-year, large-scale, and bundled format depending on whether each company achieves its proposed growth milestones.
Additionally, the ministry will establish a protection system for honest failed entrepreneurs and strengthen linkages with re-challenge finance to induce orderly closures and lay the groundwork for second chances.
An AI-based crisis warning notification system will be established for 250,000 SMEs to preemptively provide structural improvement and turnaround support to financially distressed companies among those with growth potential, while accelerating the transition into promising new businesses for companies needing business pivots.
In the second half of this year, the ministry decided to formulate measures to institutionalize a basic social security system for small business owners.
Specifically, childcare subsidies for sole proprietors will be introduced to prevent income interruption or business closures, and the creation of health care allowances is under review.
The health care allowance was formulated to address the reality—based on a Yonhap University College of Medicine survey—that the health checkup participation rate for self-employed individuals stood at 30.8% in 2023, merely one-third of the 89.3% rate recorded by wage workers.
Much like office workers or public officials taking official leave to undergo health checkups, the measure compensates self-employed individuals for business suspension losses while they close their shops to receive checkups.
Next year, the government will expand support for employment insurance premiums for self-employed individuals and prioritize the supply of policy funds focusing on medium-to-low credit and growth-promising small business owners.
Considering credit ratings and economic conditions, the additional interest rate burden is scheduled to be lowered from the current 0.0–1.6% to 0.0–1.2%জগতের.
Choi Won-young, Director General for Small Business Policy at the MSS, explained in a prior briefing, "South Korea's social security system has been centered around employed workers, leaving sole proprietors in more vulnerable conditions," adding, "Our goal is to have the small business social security system operating systematically by 2028 at the latest."
Furthermore, win-win systems will be established in the platform sector, and win-win level evaluations will be conducted for financial and defense conglomerates.
The scope of performance-sharing systems will be expanded from consignment-subcontracting transactions to all business-to-business transactions.
Systems will also be established to enable executives and employees to acquire and manage their companies, alongside frameworks to vitalize corporate succession through mergers and acquisitions (M&As).
SME support projects fragmented across various ministries will be streamlined to reduce the budget by 4.2 trillion won.
The MSS will formulate its own financial innovation plan to reorganize SME support projects, while other ministries will work on eliminating similar and overlapping programs, moving away from small-scale and scattergun approaches, and phasing out low-performing and conventional projects.
A regulatory governance framework will also be created to vitalize the startup ecosystem.
While uncovering regulatory bottlenecks on the ground in cooperation with the Korea Startup Forum, the Venture Enterprise Association, and the National Assembly, preliminary reviews and improvements will be discussed through regulatory impact assessments and regulatory rationalization committees collaborating with the Office for Government Policy Coordination.
(Photo: Provided by the Ministry of SMEs and Startups, Yonhap News)
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