"Through bold scaling up of middle-market enterprises, we must increase the share of jobs handled by middle-market and large corporations to 50% within 10 years."
On the 13th, Choi Jin-sik, the chairman of the Federation of Middle Market Enterprises of Korea (FOMEK), diagnosed at the 'Middle-Market Enterprise Scale-up Relay Field Meeting' held at the Listing Companies Association, saying, "Concerns are spreading that traditional industries, including steel and petrochemicals, as well as the competitiveness of advanced industries, could be overtaken by China."
Chairman Choi noted that regulatory relaxation is necessary for the scale-up of middle-market enterprises. He said, "In order to enhance industrial structure to discover new growth engines, we need innovative policies to actively promote growth, along with comprehensive institutional improvements in finance, labor, and the environment to facilitate the smooth scaling up of middle-market enterprises."
Chairman Choi added, "If the industrial structure is innovated through the scale-up of middle-market enterprises, quality jobs will be expanded, and smooth business diversification and technological innovation will be possible, thus establishing a foundation for sustainable growth."
The meeting was attended by government officials, including Lee Hyung-il, the first vice minister of the Ministry of Economy and Finance, Moon Shin-hak, the first vice minister of the Ministry of Trade, Industry and Energy, and Nam Dong-il, the vice chairman of the Fair Trade Commission, as well as industry representatives and executives such as Lee Se-yong, chairman of Elentec, and Gu Ja-gwan, the head representative of Samgu I&C.
At the meeting, presentations and discussions on "Measures to Promote Growth as a Middle-Market Enterprise and Alleviate Barriers to Entry for Large Corporations" were conducted by Kwak Kwan-hoon, chairman of the Korean Association of Middle Market Enterprises, and Kim In-ho, a senior researcher at the Korea Development Institute.
Chairman Kwak said that the support system must be restructured to reflect the characteristics of individual corporations. He stated, "As firms grow, support is cut off and only regulations hindering growth, such as the holding company and large corporation group regulations under the Fair Trade Act, accumulate. It's time to reassess the rationality of the system," and added, "We need to establish a flexible policy support system that reflects the characteristics of firms, such as industry and growth potential, rather than an administrative convenience-based approach that uniformly considers only scale."
Senior Researcher Kim argued that regulations must be relaxed to build a growth ladder. He emphasized, "It is necessary to alleviate excessive differentials according to the size of corporations throughout the entire system, including tax, support policies, and regulations," adding that "by providing close support tailored to the specific demands of middle-market enterprises, the center of the growth ladder, we should create an industrial ecosystem that smoothly facilitates growth from small to middle market and from middle market to large corporations by genuinely relieving management difficulties."
In particular, the middle-market sector sees a need for "financial support." Lee Se-yong, chairman of Elentec, stated, "While the operating profit margin of middle-market enterprises (6.84%) exceeds that of large corporations (5.23%) and small enterprises (3.49%), the borrowing interest rates are, on the contrary, the highest," and stressed, "To strengthen the stability of fund procurement for essential investments in scaling up, we urgently need to improve the financial system in ways that lower the threshold for policy financing, remove barriers to direct financing, and support growth through realistic interest rates and expanded loan sizes."