South Korea to Invest 40 Billion Won in New Growth Companies, Boost Small Business Support

South Korea's Ministry of SMEs and Startups announced a significant initiative to foster innovation, pledging to support 400 companies in five key growth sectors, including new security, pharmaceutical and bio, climate technology, K-consumer goods, and manufacturing AI, with substantial funding. Each selected company could receive over 40 billion won (approximately $29 million) over five years, contingent on achieving specific growth milestones.

The ministry also plans to expand its 'Everyone's Startup' project, aiming to select an additional 10,000 innovative entrepreneurs in its second phase, doubling the number from the first phase. This initiative will be supported by the creation of regional growth funds totaling 500 billion won (approximately $365 million), with a focus on revitalizing startup ecosystems across six designated startup cities and four major science and technology institute locations.

To bolster the competitiveness of small and medium-sized enterprises (SMEs), the ministry will identify the top 1% of companies, around 3,000, as 'National Representative Leap Companies.' These firms will receive expert consulting and open voucher support, up to 750 million won (approximately $550,000), over three years to facilitate their growth from small to medium and eventually to large enterprises.

In parallel, the ministry is strengthening its social safety net and financial support for small business owners and traditional markets. Plans include establishing a basic social security system for small business owners, introducing parental leave benefits for sole proprietors, and increasing subsidies for employment and industrial accident insurance premiums. Financial access for small business owners with low to moderate credit ratings will be improved through preferential policy fund allocation and reduced interest rates.

Furthermore, the ministry aims to streamline support by consolidating overlapping programs across government departments, projecting a budget saving of 4.2 trillion won (approximately $3 billion). These savings will be reinvested into key areas like new growth industries and small business initiatives. The ministry is also pursuing legislative efforts to combat technology theft, including introducing a Korean-style discovery process, imposing fines of up to 5 billion won for serious technology theft, and implementing punitive damages up to five times the actual damages.