A reorganization plan set to give higher-level government status to the Small and Medium Business Administration on Monday showed President Moon Jae-in’s drive to nurture smaller companies so they can produce more jobs and even break the market dominance of family-run conglomerates here.
The ruling Democratic Party of Korea and the government said they had agreed to create a new ministry supporting small and medium-sized enterprises and venture startups as a part of the reorganization plan.
The aim behind creating the new ministry is to promote a fair market system and secure more room to grow for smaller companies in the market long dominated by chaebol, experts said, citing Moon’s presidential campaign pledges.
(Yonhap)
Becoming a ministry means that the incumbent SME agency will be granted a bigger budget, more human resources and most importantly, the power to submit relevant bills for changes in market practices and support systems.
At the same time, the new ministry also faces pressure on expectations the move should contribute to creating more jobs.
“So far, the SMBA, the agency led by a vice minister-level official, has had no right to propose bills, so we have hoped to be raised to the status of a ministry,” said an official at the SMBA. “But we feel pressure that the new ministry should prioritize creating new jobs.”
The government plans to place administrative functions that are currently under different ministries under the new ministry instead. The SMBA’s role of supporting mid-sized companies, however, will be transferred to the Trade Ministry.
According to the plan, the new ministry will absorb the human resource training and regional cooperation unit under the Trade Ministry and the startup support bureau under the Future Planning Ministry, as well as the Korea Technology Finance Corp., a funding unit, under the Financial Services Commission.
The Home Affairs Ministry, in charge of coordinating public offices’ roles and status, is currently in talks with related ministries on how to relocate bureaus and affiliated agencies that have been operating separately.
But insiders have expressed concerns on whether the plan should have included more quasi-governmental offices, such as the Korea Trade-Investment Promotion Agency, to closely work with small companies.
“To effectively push ahead with SME policies, the relocation of affiliated agencies which execute the policies down the road, like Kotra, is needed,” a group of SMEs said in a statement. They also raised concerns over possible policy overlap, as the plan would put the Trade Ministry in charge of handling overall industries while the new SME ministry would take on policies related to company operations.
This might mean that SMEs have to follow the rules and policies of two ministries at the same time, they added.
The plan was a part of a governmental reorganization plan that included keeping a trade bureau under the Trade Ministry. The head of the trade bureau would be a vice ministerial official, but would be called a minister.
Keeping the trade unit under the Ministry of Trade is, however, backtracking from Moon’s earlier promise to relocate the office to the Foreign Ministry.
The decision was made to better deal with the fast-changing trade environment and the spread of protectionism, Democratic Party of Korea policy chief Kim Tae-nyeon told reporters.
By Cho Chung-un (
christory@heraldcorp.com)