Small Business Groups Urge New SME Minister to Cut Costs, Ease Rules

Small and medium-sized enterprise, small business and venture industry groups welcomed the inauguration of Lee So-young as minister of SMEs and startups, calling on her to expand the role of smaller firms, ease cost burdens on small business owners, streamline regulations and revitalize the KOSDAQ market.

The Korea Federation of SMEs (KBIZ) said in a statement on the 23rd that "the SME sector welcomes Minister Lee's inauguration." The group said it hopes Lee will "draw on her extensive experience and knowledge in legislation and budget work to help our SMEs and small business owners overcome the compound difficulties they face, including high interest rates, high prices and a delayed recovery in domestic demand, and go on to emerge as leading players driving our economy's growth."

KBIZ added, "As she stated at her confirmation hearing, we ask that she work actively to overcome the K-shaped polarization facing our economy by streamlining regulations, spelling out and specifying the role of SMEs in the national core growth strategy, and reforming the unsustainable cost structure borne by small business owners." The group also said, "With the arrival of the AI era, polarization between large corporations and SMEs could deepen further," urging the ministry to "concentrate policy capacity on the AI transition and digital innovation of SMEs to raise their future competitiveness."

The Korea Federation of Micro Enterprises said in its own statement that it "expects this appointment of a new minister to secure continuity in small business policy and add speed to resolving the many pending issues," adding that it was "highly encouraging" that Lee stressed during a recent visit to the federation that she would "improve the unsustainable cost structure of small business owners."

The federation also called for stronger communication between the small business sector and the minister. "To overcome a reality in which as many as 1 million businesses close each year and enormous social capital is lost as a result, firmly establishing public-private cooperation is more important than anything else," the group said. "We propose making a forum for dialogue with small business owners in the field, including the federation, a regular event."

The federation listed as key pending issues easing the high-cost burden on small business owners, building a social safety net for them, creating an ecosystem of shared growth with online platforms such as delivery and commerce services, and supporting their digital transition.

The Korea Venture Business Association said, "The venture sector has greater expectations than ever for the minister's commitment to backing companies attempting innovation so that they do not have to struggle alone," and asked her to "take the lead in creating an environment where innovation is fairly rewarded, through an effective expansion of the regulatory sandbox and active institutional improvements."

On the planned overhaul of the KOSDAQ market, the association said the system "should be improved in a way that fully reflects the growth stage and characteristics of companies." It also called for changes to working-hour rules that take account of the characteristics and realities of venture firms.

The Korean Venture Capital Association put forward revitalizing the exit market and expanding private-sector participation in venture capital as major tasks. "We need to attract large institutional investors to the KOSDAQ to improve the market's retail-dominated makeup, and to diversify the structure of the domestic exit market, which has been skewed toward initial public offerings," the association said. It added, "We hope the ministry will actively lay the groundwork for expanding the participation of private funds, such as pension funds, in venture capital," and said it "proposes redefining the role of the fund of funds and strengthening incentives for pension funds and mutual aid associations to invest in venture funds."

The Korea Women Entrepreneurs Association said, "We believe the minister's expertise, combined with the communication skills and field sense distinctive to a woman leader, will generate powerful policy synergy," adding that it "strongly expects effective, tailored policies that women-owned businesses can feel — such as invigorating the women's startup ecosystem, opening sales channels and expanding investment — to be pursued at speed."

Lee formally began her term the previous day after President Lee Jae-myung approved her appointment. After the appointment, the minister wrote on social media that she would "find the answers in the field as to what needs to be done," adding, "If necessary, I will break the mold and work dynamically, taking things head on."