The Ministry of SMEs and Startups (Minister Oh Young-joo, hereinafter referred to as the Ministry of SMEs and Startups) reviewed the policy implementation conditions for the SMEs, ventures, and small business sectors and announced the '2025 Ministry of SMEs and Startups Work Plan' containing the major policy directions for 2025.
In a joint work report conducted by four ministries, including the Ministry of SMEs and Startups, under the theme of 'Economic Risk Management and Enhancing Economic Vitality,' the Ministry of SMEs and Startups presented three major goals: ① revitalizing the people's economy, ② innovation and scale-up, and ③ preemptive response to the future.
◆ [Policy Environment] The Need for Preemptive Response to the Persistent Complex Crisis and Changing Business Environment
While prices are stable, the accumulated effects of rising prices and interest rates, coupled with the slow recovery of domestic demand, are worsening the business conditions for small and medium-sized enterprises and small businesses. Furthermore, rising fixed costs, such as energy and labor, are further exacerbating management challenges.
In addition, negative external conditions such as high exchange rates and global protectionism are expected to expand, and small and medium-sized enterprises (SMEs) are expected to face increasing difficulties due to a shortage of human resources and aging CEOs as a result of the advent of a super-aging society.
Specific tasks to be implemented to resolve these difficulties are as follows.
◆ [Goal 1] Revitalizing the People's Economy: Alleviating the Imminent Business Shock and Stimulating Domestic Demand
1. Alleviating the three major management shocks facing the company.
[Financial shock]
We will strengthen support for the three sets of small business finance programs, including the supply of 3.2 trillion won in convertible guarantees, easing requirements for repayment extensions, and granting grace periods for refinancing loans. We will also implement the "So-Mang (Small Business Hope) Recharge Project," which will provide additional loans to those who faithfully repay the three sets.
Additionally, 30 "Small Business Debt Settlement Centers" will be established nationwide and, in collaboration with the rehabilitation courts, will expedite the debt settlement process for small business owners. To significantly shorten the bankruptcy and rehabilitation process, which currently takes approximately 12 months, a dedicated fast-track program will be established for small business owners to support their recovery efforts.
[Exchange rate shock]
In the event of damage due to persistently high exchange rates, up to 1.5 trillion won in policy funds will be provided to businesses affected by imports and exports to support stable operations. Export vouchers will also be used to cover trade insurance and guarantee costs required during the export process, up to a limit of 10 million won.
In addition, we plan to present standards for entering into agreements to reflect exchange rate fluctuations in delivery prices and provide consulting services to help suppliers and consignees share exchange rate risks.
[Investment Recovery]
To promote the recovery of the venture investment market, the Ministry of SMEs and Startups will swiftly implement a KRW 1 trillion mother fund investment project in the first quarter and create KRW 1.9 trillion in new venture funds.
In addition, we will boldly ease venture investment regulations to global standards, including expanding the scope of investment obligations, currently limited to startups and venture companies, to all small and medium-sized enterprises (SMEs), thereby promoting the inflow of private capital.
2. Supply of domestic demand promotion materials
The Donghaeng Festival, a large-scale consumer festival, will be held twice in the first half of the year, and four times a year. A special 15% discount and refund event for digital Onnuri gift certificates will be held before and after the Lunar New Year holiday to revitalize the already stagnant consumer sentiment. Onnuri gift certificates will be issued at a record-breaking 5.5 trillion won, and user convenience will be enhanced by expanding their availability.
The number of duty-free shops serving SMEs, which have a significant sales impact, will be expanded from three to six at airports, and the number of participating companies will increase from 900 to 1,800. For SMEs and startups, the commission on dedicated duty-free shops will be reduced by half, from the current 23% to around 10%, to support their early market development. Furthermore, by allocating at least 30% of broadcasts featuring SME products on public home shopping channels, the goal is to achieve KRW 900 billion in sales through public home shopping, maximizing the revenue generation impact for SMEs and small business owners.
In addition, we plan to maximize the effect of increasing actual sales in the public procurement market by preventing products manufactured by large corporations and overseas companies from being delivered by small and medium-sized distribution companies disguised as small and medium-sized enterprise products.
3. Strengthening the sales safety net
We are introducing a new 'Small Business New Start Hope Project' that provides integrated support from business closure to employment and re-establishment.
The store demolition subsidy will be expanded from the current 2.5 million won to 4 million won, and a low-interest, long-term installment repayment program will be introduced to reduce the burden of closure for small business owners. Through a partnership between the Hope Return Package (Ministry of SMEs and Startups), a specialized employment program for small business owners, and the National Employment Support System (Ministry of Employment and Labor), employment support grants worth up to 9.45 million won will be provided. Furthermore, for small business owners who wish to reopen their businesses, dedicated PM matching will be provided to support industry transitions and commercialization of new businesses, ensuring a stable fresh start.
We will also create an environment where online platforms, such as delivery apps, and small businesses can coexist. Through collaboration with the Fair Trade Commission, we will conduct a comprehensive investigation and improve terms and conditions that are unilaterally disadvantageous to small businesses, focusing on oligopolistic delivery platform companies.
We plan to conduct a survey of online platform users, revealing the results of our comprehensive platform usage survey, including fee structures and unfair practices. Furthermore, we plan to expand the pilot evaluation of shared growth to include delivery platforms and consider including them in the shared growth index in the mid- to long-term.
To alleviate the burden of fixed costs on small business owners, we will support approximately 680,000 small business owners who use delivery and courier services with up to 300,000 won, and reduce credit card commission rates based on the sales volume of small business owners (in collaboration with the Financial Services Commission).
[Goal 2] Innovation and Scale-up: Fostering innovative companies in new industries and scaling up through digital transformation.
1. Fostering startups that lead new industries.
We will foster 1,000 cutting-edge startups that will lead new industries.
We strategically support deep-tech startups with global competitiveness in hyper-gap fields like system semiconductors and AI, from discovery to commercialization and IPO, to help them scale up. We identify startups that rank in the top 10% in employment, sales, and investment, and provide systematic support, including support for commercialization through sector-specific anchor organizations and open innovation, and technical advice for IPO preparation.
Additionally, a specialized program will be established to intensively support commercialization and product verification based on the technological characteristics of startups in five high-growth sectors, including AI fabless and healthcare.
Additionally, the "Deep Tech Value-Up Program" will be established to discover promising startups and support matching and collaboration based on demand from large corporations. A pilot program was launched with Hyundai Motor Company in 2024, and this year, the program will be expanded to eight large corporations. Furthermore, a new "Value-Up Fund" will be established, where the mother fund will provide a 1:1 matching investment from a large corporation.
By increasing investments from mother funds and attracting investment from large and medium-sized companies, we will create a domestic venture investment market worth 13 trillion won. We will also create an additional 1 trillion won in global funds, bringing the total to 13 trillion won, thereby supporting the growth of innovative companies.
To foster an environment where talented overseas individuals can launch startups in Korea, the requirements for the "Startup Korea Special Visa" will be revised. Rather than focusing on formal criteria like academic degrees and investment attraction performance, the evaluation will prioritize business viability and innovation, thereby fostering the influx of overseas talent into Korea.
To enhance and network global startup and venture hubs, a "tentatively named K-Startup Silicon Valley Town" will be established. Located in Silicon Valley, where Korean entrepreneurs can easily start businesses, the town will serve as a public-private global startup and venture hub, serving as a base for global expansion.
2. Innovative small business owners taking a leap forward in digitalization.
We will support the digitalization of 13,000 small business owners by establishing a "Smart Small Business Roadmap" that takes into account their level of digital transformation.
The "TOPS Growth Ladder Project" was also established to promote digitalization through collaboration with private online platforms. The private sector will discover opportunities, and the government and online platform companies will establish a support system for each stage of growth, taking into account the level of digital transformation of small business owners.
In addition, we will support the efficiency of store management by distributing subscription-based service SW capable of sales management and data analysis, and expand the distribution of kiosks that can be easily used by the disabled and elderly, thereby helping small business owners with their digital transformation.
A program to support exports for small businesses leveraging its global online distribution network will also be established. Global retail giant Amazon is establishing a new project, tentatively named "Icon (Amazon X Lycon)" to provide close support, including strategic consulting, product development, and exports.
In addition, we plan to foster small business owners with export capabilities by collaborating with the Ministry of Food and Drug Safety to provide customized overseas expansion consulting and overseas certification support for each brand using Olive Young's infrastructure.
3. Small and medium-sized enterprises doubling their productivity
Accelerating manufacturing innovation for small and medium-sized enterprises through AX and DX.
We are promoting digital transformation tailored to the needs of approximately 1,700 small and medium-sized manufacturing companies through automation, intelligence, and autonomy of processes, including the introduction of manufacturing robots, smart factories based on manufacturing data, and autonomous factories utilizing digital twins.
The enactment of the "Act on the Promotion of AI in Small and Medium-sized Enterprises" and the "Act on the Promotion of Smart Manufacturing Industry" will promote AI adoption by small and medium-sized enterprises and establish a legal foundation for fostering specialized smart manufacturing companies. Furthermore, the government will expand the adoption of AI solutions, including those for detecting machine and equipment anomalies and optimizing product design, by establishing three additional manufacturing AI centers.
To promote innovation in small and medium-sized enterprises, three R&D tracks will also be fully operational.
The government will expand the share of SME R&D in national strategic technology sectors (12 fields, including semiconductors and secondary batteries) from the current 38% to over 50%. Furthermore, it will promote "Global Collaborative R&D," which leverages technologies from leading overseas research institutes to support SMEs' commercialization R&D and resolution of technical challenges. Finally, through collaboration with the Ministry of Science and ICT, the government will transfer patented technologies from 23 research institutes in the science and technology sector to ultra-gap startups, thereby accelerating the commercialization of R&D results.
We will also provide policy financing tailored to each stage of growth, supporting the growth of small businesses from small to medium-sized enterprises (SMEs) and from SMEs to mid-sized enterprises. Furthermore, we plan to establish new criteria for each SME industry, taking into account recent inflation and industrial changes, to ensure the smooth functioning of the growth ladder system.
[Goal 3] Preemptive Future Response: Preparing for a Future Leap by Responding Quickly to Environmental Changes
1. Strategic globalization to prepare for environmental changes
We foster global SMEs that are resilient to internal and external volatility.
To promote exports of low-fixed-cost, high-value-added tech services, we will establish an export voucher system and fully operate the "Global Smart Tech Bridge" platform, which supports matching and transactions with overseas technology demand companies.
To promote exports of strategic Hallyu items, including food and content, including K-beauty, the "K-Beauty Global Fund" will be established, and a joint Korea-Saudi fund of 160 million dollars will be utilized to support the advancement of the game industry in the Middle East, thereby expanding the development of new markets for Hallyu-based content.
We will also continue to support existing key export items. We will diversify our export markets by moving away from a concentrated market structure in certain countries like the US and China and pursuing market development through information provision and consulting on alternative markets.
In addition, we will strengthen our customized response to overseas export regulations.
We will support SMEs in proactively responding to overseas export regulations by encouraging ESG innovation across the entire supply chain between large corporations and partner SMEs, and by expanding links between domestic halal certification agencies and export SME certification support.
Expand local support to address supply chain restructuring.
In addition to providing new low-interest financing for companies establishing and operating overseas corporations, we will expand the Global Business Center, a hub for overseas expansion, and strengthen the "Global One Team Council," a collaboration between 25 overseas diplomatic missions in 17 countries, to address the challenges faced by local small and medium-sized enterprises.
2. Sustainable local economy
To foster local commercial districts where people and capital gather, two new "Glocal Commercial District Projects" will be designated, where tourists can stay and enjoy the diversity of the region, and up to KRW 15.5 billion will be provided to two locations over five years.
In addition, three new systems will be established to support private-sector-led commercial district reconstruction: the Commercial District Planner, Commercial District Development Fund, and Commercial District Investment Association. The number of commercial district planners, responsible for planning and executing strategies for commercial districts, will begin with 250 in 2025 and expand to 1,000 by 2027.
In addition to establishing a commercial development fund jointly funded by local governments, small business owners, and local enterprises, a commercial investment association operated by commercial planners will also be introduced. These associations will be required to invest in commercial areas and small business owners to promote their development.
We plan to foster traditional markets where history and digital coexist by designating two to three century-old markets each year that embody local history and culture and turning them into landmarks, and introducing the latest joint logistics services to traditional markets.
The "Legend 50+" 2.0 program, with a budget of KRW 430 billion, will comprehensively support local government-planned regional specialization projects, including funding, exports, and R&D. Furthermore, a KRW 1 trillion R&D program dedicated to innovative SMEs outside the metropolitan area will be established to strengthen the innovative capabilities of local SMEs.
The project will involve the participation of mother funds, local governments, local banks, and regional companies, creating regional venture funds worth 1 trillion won over three years (2025-2027). The plan is to establish at least one venture fund in each of the 14 cities and provinces outside the Seoul metropolitan area within three years, and to provide incentives to private investors, including priority loss reserves and excess profit transfers.
3. Improving Response to Population Structure Changes
To prevent small and medium-sized enterprises (SMEs) from going bankrupt due to factors such as aging CEOs and the absence of close relatives, a "Tentative Corporate Succession Act" will be enacted, which will utilize third-party M&A. The plan is to provide thorough support throughout the entire M&A-type succession process, including designating corporate succession support centers, linking with private M&A brokers, and providing subsidies.
In collaboration with the Ministry of Education and the Ministry of Justice, we will establish a support system for international students, including job training, job matching, and visa conversion. This system will support all stages of international student recruitment, from recruitment to employment and settlement, and will help alleviate the labor shortage in small and medium-sized enterprises.
The plan is to significantly expand the number of subscribers to the "Preferential Savings Deduction" program, which supports asset formation for employees of small and medium-sized enterprises, and to expand the scope of support for the Youth Entrepreneurship Academy from young people to middle-aged people with entrepreneurial experience, thereby encouraging long-term employment at small and medium-sized enterprises and supporting technological entrepreneurship among middle-aged and older people.
Minister Oh Young-joo said regarding the 2025 work plan, “With the inauguration of the Trump administration, external uncertainty will increase, and the unstable domestic and international environment will be an even greater challenge, especially for small and medium-sized enterprises and small business owners who are the targets of the Ministry of SMEs and Startups’ policies.” He emphasized, “The Ministry of SMEs and Startups will play the role of a strong support that small business owners and small and medium-sized enterprises can rely on and trust.”
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