Lee Jae-myung's term as the 21st president officially began on the morning of the 4th, and small businesses and startups are showing expectations for the revitalization of the ecosystem. There are also opinions that small businesses and startups need to secure competitiveness through strengthened support to overcome the crisis.
The industry is showing interest in President Lee's promise to expand the 'venture and startup R&D budget' made during his candidacy. Former President Yoon Suk-yeol drastically cut the R&D budget last year, which had a significant impact on technological startup support and programs like the TIPS program (private investment-led technology startup support). President Lee's commitment to securing the R&D budget at a level above a certain percentage of national expenditure also stems from this background.
The actual cut in the R&D budget posed challenges for startups. Investments from private investors, such as venture capital (VC), have contracted, putting technology-centric startups that require long-term R&D in a survival dilemma. A startup developing a corporate collaboration platform laid off 70% of its workforce as government support decreased due to R&D budget cuts.
A representative from a startup said, 'R&D does not discriminate by company size.' They added, 'The government tends to set short-term results as the criteria for supporting the R&D budget, but in cutting-edge fields like deep tech, a relatively long research and development process is needed. It would be great if the new government could refine the support criteria for each field and allow ample time for the development and launch of services.'
President Lee's mention of expanding the 'venture investment market' during the election campaign is also a promise that holds expectations. President Lee has pledged to nurture a venture investment market worth 40 trillion won annually to make Korea a global leader among the top four venture countries. According to the Ministry of SMEs and Startups, last year's domestic venture investment was 11.9457 trillion won, which is about 30% compared to the promised levels made by the elected candidate.
The Korea Venture Business Association stated that 'the number of startup companies, which are seeds of ventures, has decreased for three consecutive years, and as the venture investment market shrinks, the operating profits of venture companies have turned to losses for the first time ever, causing the challenges and growth vitality that symbolize ventures to vanish.' They expressed hope that the promises regarding ventures and startups presented during the election will be practically implemented as effective policies that can be felt by businesses.
Small and medium-sized enterprises (SMEs) are requesting bold support processes during the nurturing of future strategic industries. The Korea Federation of SMEs (KBIZ) emphasized, 'We must strengthen support for small and medium-sized enterprises in fostering future-leading strategic industries and ensure that traditional manufacturing SMEs can secure industrial competitiveness through innovations and structural improvements based on AI and carbon neutrality.' They also stressed the need to create a fair economic ecosystem to lay the foundation for shared growth.
President Lee has a vision to create an economically structured system centered on robust small and medium-sized enterprises in an international environment. Plans include securing participation programs for SME exports and strengthening support, such as expanding export vouchers in response to changing trade environments. A proposal for the enactment of the 'Small and Medium-sized Enterprises Globalization Support Law' that supports financing, personnel, and tax deductions has also been presented.
The small business sector is expressing expectations for the new government's supplementary budget related to people's livelihood. The Small Business Federation stated, 'We hope that the special measures promised by President Lee regarding COVID-19 loan debt adjustments and reductions, as well as easing financial burdens, will also be included in the supplementary budget, providing hope and courage to small business owners.'
They added, 'We hope that prioritizing small business policies through the expansion of dedicated organizations for small businesses will be realized.'