This study assesses the implementation of the long-term plan to promote small and medium-sized enterprises (SMEs) in Korea over the past five years since its introduction in April 1982, thereby discovering the current challenges and effective ways to tackle them.
With its surprising growth through 1960s and 70s, the Korean economy has emerged as one of the most prominent leaders of developing countries. However, the disproportionate concentration of resources and government support in certain sectors during the period has led to greater inequality between regions, sectors, and income groups, eventually reducing nation-wide economic efficiency. SMEs play a critical role in the economy, supporting the balanced development of industry, stable foundation of export industries, the development of regional economies, technology development, job creation and more. The failure to properly develop this sector seriously restricts further growth.
The Korean government’s policies to promote SMEs were first introduced during the country’s export-driven industrialization phase (1962-71) but achieved little progress. During the heavy-chemical industrialization period (1972-79), the main focus of industrial policies was on the industrial structure sophistication through promoting heavy-chemical industries. As a result, most resources were directed towards major enterprises with SMEs left behind.
Policies in the 1980s helped raise the share of SMEs in Korean economy and facilitated the sophistication of SMEs’ structures. In May 1983, the Korean government began to seek out and provide comprehensive support for promising SMEs. In 1986, the SME Establishment Act was enacted as an institutional support for SMEs. Modernizing projects for individual SMEs and cooperation facilitation projects among related SMEs were also carried out. The Promotion of Alliance between SMEs Act, which was introduced in 1975, attempted to induce social division of labor between major enterprises and SMEs. It also aimed to promote domestic parts industry by localizing the production of 13,420 parts and materials by 1991. Various efforts are being made to organize and provide technical support for SMEs with cooperatives playing a central role, to make SMEs a center of exports and support their overseas operations, to support local SMEs, and to strengthen financial/tax supports for SMEs.
Advanced economies are viewing SMEs as an economy-wide issue, and are carrying out supportive policies for their establishments and R&D activities. Korea should focus on intellectual concentration of SMEs, R&D support, improving co-projects undertaken with cooperatives, business-shifting plans, better alliance plans and establishment support, local SMEs facilitation, globalization support, and more financial support.
Keywords: Small and Medium-sized Enterprises, establishment, social division of labor, technology development, SME policies, balanced development
80년대 중소기업육성정책의 성과와 과제
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < Entrepreneurship|
|Holding||KIET; KDI School|