Korean gov’t outlines support package for small business owners

[Photo by Kim Ho-young]

The South Korean government is expected to establish a special law that allows small business owners without familial successors to sustain their innovations and technologies via mergers and acquisitions (M&As).

The Ministry of SMEs and Startups on Monday unveiled a package of five strategies and 17 initiatives to support small companies, including a measure designed to help small business owners ensure the sustainability of their workforces and productivity.

In many cases, SME owners often end up shutting down their firms as they have no family or relatives to carry on the business.

“In Japan, the government actively promotes M&A succession for small companies, given that one-seventh of profitable SMEs opt for closure due to familial succession difficulties,” said Minister of SMEs and Startups Oh Young-ju.

The ministry’s package also outlines various policies to bolster the number of innovative SMEs and startups across advanced manufacturing, energy, artificial intelligence (AI), and other high-performing sectors to 100,000 by 2027, up from the current 70,000.

Innovative SMEs will receive regulatory and financial support. For instance, the policy financing allocated to SMEs that venture into new sectors will surge from 53 percent to 70 percent out of the total financing by 2027.