The average age of managers at domestic small and midsize enterprises is 55, and 33.3% are 60 or older. The share of small and midsize enterprises conducting research and development is just 15.1%, revealing simultaneous problems of aging and insufficient technology investment among small and midsize enterprises.
The Ministry of SMEs and Startups on the 9th announced the results of the "2024 Small and Midsize Enterprise Survey," which includes these findings. The survey is conducted annually to comprehensively assess the management status and difficulties of small and midsize enterprises and use the results as basic data for policymaking. However, this year's survey revised the population and sample design, making direct numerical comparisons with last year difficult.
According to the survey, the average operating history of small and midsize enterprises as of 2024 was 14.3 years. "10 years or more" corporations accounted for 60.4% of the total, the largest share, while "less than 5 years" corporations were just 12.9%. The average age of managers was 55, with those 50 or older making up 70.2% of the total and those 60 or older reaching 33.3%. By contrast, managers under 40 were only 4.9%, showing a clear aging trend across small and midsize enterprises.
Looking at the R&D status, total research and development expense by small and midsize enterprises was 16.3 trillion won, and the share of small and midsize enterprises conducting research and development was 15.1%. Investment in research and development was concentrated in manufacturing (8.5 trillion won, 51.7%) and information and communications (3.4 trillion won, 20.7%), and within-industry shares of corporations conducting research and development were higher in information and communications at 49% than in manufacturing at 35.9%.
Total sales of small and midsize enterprises were 2,085 trillion won, and the number of employees was 7.92 million. By industry, wholesale and retail and manufacturing accounted for the highest shares in both sales and employment. Wholesale and retail recorded sales of 649 trillion won (31.1%) and 1,007,000 employees (12.7%), while manufacturing posted sales of 638 trillion won (30.6%) and 1,931,000 employees (24.4%). Compared with the basic statistics on small and midsize enterprises, sales increased slightly from a year earlier, while the number of employees decreased somewhat.
Regarding subcontracting transactions, 16.7% of all small and midsize enterprises were suppliers engaged in delivery transactions, and subcontracting sales accounted for 18.8% of total sales. Total sales by supplier corporations were 584 trillion won, of which 393 trillion won came from transactions with client corporations. Supplier dependence on client corporations was 67.3%, and manufacturing showed the highest levels across the number of corporations, sales share, and client dependence (72.5%). Major difficulties in subcontracting transactions included "failure to reflect raw material price increases in delivery unit prices," "frequent spot orders," and "shortened and tight delivery deadlines."
The Ministry of SMEs and Startups (MSS) plans to use the survey results to pursue policies that ease the problems of long operating histories and aging among small and midsize enterprises and build a dynamic growth ecosystem. It will expand income and corporate tax reductions for young startups in new industries and open an online startup one-stop support center in the first quarter of this year to address on-site difficulties faced by startups.
In addition, considering that one-third of small and midsize enterprises have managers aged 60 or older, the government will pursue as a national agenda the establishment of a support system for business succession through mergers and acquisitions (M&A) so that corporations facing difficulties with family succession can continue to grow rather than shut down. To spread high-growth small and midsize enterprises through research and development, it will expand the number of beneficiaries of the TIPS program and broaden support for research and development by introducing a Korea-style Small Business Technology Transfer program (STTR) dedicated to commercialization.
The Ministry of SMEs and Startups (MSS) will also strengthen the protection of small and midsize enterprises' rights and interests by expanding the dispute mediation council to facilitate amicable, voluntary mediation of disputes between corporations, and by working with the Korea Fair Trade Commission to establish a fund for relief from unfair transaction damages.
Kim Dae-hee, director general for SME strategy and planning at the Ministry of SMEs and Startups (MSS), said, "The retooling of this survey is meaningful in that it has advanced the statistical foundation for comprehensively understanding the actual business conditions and difficulties of small and midsize enterprises," and added, "Based on the results, we will continue to identify and pursue effective, tailored support policies."