It turns out that over the past three years, the closure rate of small business owners—corporations with fewer than 10 workers, who account for 62% of the workforce in 35 national industrial complexes nationwide—has reached 75.4%. A prolonged economic slump, China's low-price offensive, aging, and insufficient readiness for the AI era are analyzed as the main reasons for closures. Government support measures centered on small and medium-sized corporations, which are larger in scale than small business owners in national industrial complexes in terms of sales and other metrics, are also cited as a problem.
According to data submitted by the office of lawmaker Oh Se-hee of the Democratic Party of Korea on the Trade. Industry Energy. SMEs. and Startups Committee to the Korea Industrial Complex Corporation (KICOX) on the 16th, of the 1,825 corporations that closed in 35 national industrial complexes nationwide over the past three years (January 2023–August 2025), 1,419 were small business owners, accounting for 75.4%. Closed small and medium-sized corporations numbered 389, or 23.7%, and large corporations numbered 17, or 0.9%.
A small business owner refers to a corporation with fewer than 10 workers among small corporations with annual sales of 1.5 billion–14 billion won. They are smaller in scale than small and medium-sized corporations with annual sales of 40 billion–180 billion won or less. Small business owners work across a variety of sectors, including manufacturing, construction, transportation, information and communications, and lodging and food service.
◇ Over three years, 1,419 small business owners in national industrial complexes closed
A national industrial complex is an industrial park designated to foster key national industries and high-tech industries under the Act on Industrial Sites and Development (Industrial Sites Act), and it is managed by the Korea Industrial Complex Corporation (KICOX).
With low sale prices, reductions in acquisition and registration taxes, and established infrastructure such as power, small and medium-sized corporations and small business owners mainly move in and run their businesses. Currently, about 26,741 small business owners are located in 35 national industrial complexes nationwide, accounting for 62.4%. However, there have been steady calls pointing out that the number of small business owners closing after moving in is increasing.
Experts cite China's low-price offensive and systems lagging behind in the era of advanced technologies such as AI as the biggest background for the increase in closures among small business owners in national industrial complexes. A CEO of a manufacturing small and medium-sized corporation that sources metal parts from small corporations said, "Standardized basic parts in machinery and other manufacturing industries may differ by type, but compared to imported Chinese parts, Korean-made ones are about twice as expensive." The CEO added, "With the tariff shock from Trump in the U.S. layered on, it is impossible to know how the situation will unfold going forward."
Another issue is aging, as most small business owners in the complexes are first-generation founders in their 60s or older. Jin Byung-chae, president of the Korea Small Business Institute and a professor in the Department of Industrial and Systems Engineering at KAIST, said, "Since the 1970s and 1980s, first-generation founders in national industrial complexes who have grown their companies are increasingly winding down and exiting during succession," adding, "Second generations do not want traditional manufacturing, such as cutting and processing metal." Jin also said, "First-generation manufacturing small business owners and other small corporations find it difficult to apply advanced technologies such as AI to their lines of business, so they cannot help but lag behind these technological changes."
◇ "Support tailored to small corporations, not SMEs, is needed"
Government support measures centered on small and medium-sized corporations are also cited as a major reason for the increase in closures among small business owners in national industrial complexes. Small business owners in the complexes are said to be outside the government support system.
Looking at the performance over the past five years from January 2021 to August 2025 for the "industrial cluster competitiveness enhancement project," a representative corporate support program of the Korea Industrial Complex Corporation (KICOX), for "research and development (R&D) projects" worth 200 million won or more, small and medium-sized corporations accounted for 80.4% by number and 84.4% by amount supported. In contrast, among small business owners selected for R&D projects, the share was 19.1% by number and 15.3% by amount.
For "promotion projects" such as management consulting and prototype production worth 20 million won or less, the participation rate of small business owners was high at 67.5%, but the amount supported was only 34.1%, about half that of small and medium-sized corporations (65.9%).
Lawmaker Oh Se-hee said, "The share of small business owners in national industrial complexes is high, but they are not receiving proper support," adding, "We need measures to strengthen competitiveness after move-in, not just move-in itself." Oh said, "The 75.4% closure rate lays bare the hardships small business owners in national industrial complexes face," stressing, "We must establish dedicated support programs for small business owners in national industrial complexes and introduce a minimum allocation system for small business owner support funds."
Meanwhile, some say the government should strengthen policies to support corporations in business conversion and restarting in connection with the closures of small business owners in national industrial complexes. Noh Min-seon, a Deputy Minister at the Korea SMEs & Startups Institute (KOSI), said, "If there is no growth potential, rather than dragging small business owners along, we should actively strengthen measures that support swift closure while also backing opportunities to try again through business conversion based on technology development and business upgrading."