Actively foster local SMEs in non-metropolitan areas
- Division
- International Cooperation Division
- Date
- 2018.06.11
- Writer
- Deputy Director Young Soon Lee
- File
- Headline
- To nurture local SMEs, local governments take lead in choosing them on a certain criteia, while the central government provides a supporting role for R&D and technology commercialization, etc.
□ The Ministry of SMEs and Startups will provide support for 181 Outstanding Local Businesses selected from areas outside the Seoul Capital Area (SCA). Outstanding Local Businesses are selected among SMEs with high growth potential outside the SCA. The eligibility requirements include a three-year average revenue between KRW 5 and 40 billion, a high revenue growth rate, and a high percentage of R&D investment. The new program is aimed at expanding the SME development programs implemented in some metropolitan areas to other areas. On the basis of the selection criteria currently applied in the five areas implementing their own programs, the MSS consulted with local governments outside the SCA to develop four selection criteria: Job Creation, Export, Growth (revenue growth), and Tech Innovation (percentage of R&D investment). Each local government chooses any two of the four criteria to select its Outstanding Local Businesses.
□ On average, the 181 companies selected for 2018 earned KRW 12.2 billion in yearly revenue over the last three years, invested KRW 655 million in R&D in 2017 (5.3%), and exported goods and services worth KRW 1,856 million (15.2%). By business type, 39% of the selected companies were from the machinery and material industries (71 businesses), 22% were from the bio and healthcare industries (39 businesses), another 22% were from the electronics and IT industries (40 businesses), and 17% were from other businesses (31 businesses).
□ A total of KRW 13.4 billion will be provided through the program this year, which the MSS and local governments will share at a 6:4 ratio. Each business will be granted around KRW 50 million in support for their commercialization efforts. The ministry plans to commit KRW 300 million each year to commercialization R&D support (two years) starting in 2019. The 14 metropolitan local governments participating in the program will offer lower interest rates for SME Fostering Loans, raise the loan limits, organize their market development groups, and help businesses invite overseas buyers to Korea. The Industrial Bank of Korea will also lower interests rates for the selected companies (up to 1%). Thus, the central government, local governments, and the private sector will form a policy scrum to help outstanding businesses.
□ The MSS and metropolitan governments plan to create new jobs for around 6,000 workers by selecting 1,000 Outstanding Local Businesses over the next five years. Moreover, they will continue to support the businesses selected this year so that they can grow into small and strong businesses that can successfully compete in the global market.
□ An MSS official said that the program is significant in that it represents a cooperation model where local governments take the lead with the central government providing support. The official added that the ministry and the local governments would work together to ensure that the supported businesses grow into small and strong global businesses.
□ On average, the 181 companies selected for 2018 earned KRW 12.2 billion in yearly revenue over the last three years, invested KRW 655 million in R&D in 2017 (5.3%), and exported goods and services worth KRW 1,856 million (15.2%). By business type, 39% of the selected companies were from the machinery and material industries (71 businesses), 22% were from the bio and healthcare industries (39 businesses), another 22% were from the electronics and IT industries (40 businesses), and 17% were from other businesses (31 businesses).
□ A total of KRW 13.4 billion will be provided through the program this year, which the MSS and local governments will share at a 6:4 ratio. Each business will be granted around KRW 50 million in support for their commercialization efforts. The ministry plans to commit KRW 300 million each year to commercialization R&D support (two years) starting in 2019. The 14 metropolitan local governments participating in the program will offer lower interest rates for SME Fostering Loans, raise the loan limits, organize their market development groups, and help businesses invite overseas buyers to Korea. The Industrial Bank of Korea will also lower interests rates for the selected companies (up to 1%). Thus, the central government, local governments, and the private sector will form a policy scrum to help outstanding businesses.
□ The MSS and metropolitan governments plan to create new jobs for around 6,000 workers by selecting 1,000 Outstanding Local Businesses over the next five years. Moreover, they will continue to support the businesses selected this year so that they can grow into small and strong businesses that can successfully compete in the global market.
□ An MSS official said that the program is significant in that it represents a cooperation model where local governments take the lead with the central government providing support. The official added that the ministry and the local governments would work together to ensure that the supported businesses grow into small and strong global businesses.